Insider buying @ AVI-TECH, JB FOODS

We highlight 2 companies which are off the radar of many investors. Their shares, however, have just been accumulated by insiders.


> Avi-Tech Electronics had a horrible FY12 ended June, suffering a net loss of S$8.2 million compared to a $1.1 million profit in FY11.

The loss was primarily due to the poor performance by its U.S. subsidiaries (Imaging Equipment and Energy Efficient Products business segment), which incurred high operating and development costs while developing new products.

(For more on the results, click here for its press release)

Its stock price has fallen to 7.4 cents, down 26% in the year to date.

It didn’t declare a final dividend nor an interim for FY12, as it did in FY11 of 0.5 cent a share in total.

Avi-Tech independent director Goh Chung Meng.

The positives:

> Net Asset Value stood at 15.28 cents a share, or 100% higher than its stock price.

> Cash and cash equivalents stood at $33.6 million, while bank borrowings was $8.6 million.

The net cash is the same as the market cap ($25.8 million).

Its independent director, Goh Chung Meng, has increased his holding of Avi-Tech shares, as has the company through its share buyback mandate (see table above).

Mr Goh is also a director of ACE Investment Management Pte Ltd, a boutique private equity investment company.

> JB Foods is not too well-known among Singapore investors as it is a newly-listed company, which is in the business of producing cocoa ingredients in Malaysia.

The ingredients are cocoa butter, cocoa powder, cocoa liquor and cocoa cake, which are used to produce chocolate, chocolate confectionary, as well as cocoa-related food and beverages.

Its CEO, Tey How Keong, bought 1 million shares for his own account just a month after its IPO.

His purchase price of 29 cents was a whisker below the IPO price of 30 cents.

He has a 50% direct and indirect interest in major shareholder JBC Group, which sold 8 million vendor shares during the IPO.

JB Foods produces these products and exports them worldwide to customers ranging from international trade houses to end-users such as F&B and confectionery manufacturers.

For 1H2012, JB Foods achieved revenue of RM271.6 million (down 21.3% year on year) and a net profit of RM22.5 million (down 11.4%). 

JB Foods is recommending a one-tier tax exempt interim dividend of 1 cent per share.