From 76 cents at the end of last year, ABR Holdings was up 25% at 95 cents at 31 March 2014. Bloomberg data.
However, a handful of stocks have sizzled. For example, the stock price of Valuetronics Holding was up 35% in 1Q while ABR Holdings was up 25%.
ABR runs up on property play theme
ABR Holdings began running after it announced on 26 February an approval from SGX to diversify into property development as a second leg of its core business.
ABR manages, franchises and operates a portfolio of well known food & beverage companies and brands, which includes flagship franchise on the Swensen's restaurant chain.
Other brand names under its umbrella include Yogen Fruz, Gloria Jean's Coffees, Oishi Pizza, Season Confectionary & Café, Hippopotamus and Tip Top Curry Puff.
Challenged by rising rentals and manpower costs, ABR's profit attributable to shareholders in FY2013 was down 89.1% year-on-year at S$8.5 million.
Last year, commercial rent in Singapore's core central region rose by close to 20%.
Rather than grapple with ever-rising rental rates, the F&B operator divested its lucrative chocolate retail business to the founders and is using part of the sale proceeds to diversify into the property business.
In 2012, ABR divested its 51% stake in Emirada (which operates The Cocoa Tree confectionery chain) for S$100 million.
As at 31 December 2013, ABR had cash and cash equivalents of S$71.7 million.
ABR Holding is the operator of household names in restaurant franchises. It has announced SGX's approval for it to diversity into property development. Company photo
Ang Yee Lim, MD of ABR Holdings. Photo: Annual reportThrough its foray into property development, ABR will have opportunities to allocate F&B space in its commercial buildings to its own businesses, as well as hedge against increases in rental on its leased premises.ABR managing director Ang Yee Lim has been giving his vote of confidence in the company's strategy through his shares purchases.
He has bought more than 2 million ABR shares in the past 6 months, bringing his total interest to 42.7% last month, when he bought 170,000 shares from the open market on 4 and 5 March for S$136,850 (80.5 cents each).
In 2012, ex-remisier king Peter Lim increased his deemed interest by 8.109 million shares, from a 6.07% stake to 10.03% after the company announced its divestment of Emirada.
Related story: Strong Insider Buying At ROXY-PACIFIC, ABR HOLDINGS
|
Valuetronics - still a value stock after price run-up Valuetronics' stock price was up 35% in the first 3 months of this year. Even with the run-up, its current dividend yield is a good 4% based on Friday's closing price of 32 cents. Last year, it paid a 8-HK ct (1.3 SG ct) dividend, continuing its track record of paying annual dividends for the past 8 years. In FY2012 and FY2013, its dividend payout ratio exceeded 40%. Valuetronics' dividend-paying ability derives from its strong operational cash flow and profitability, despite the consumer electronics manufacturing services industry being a cut-throat business.  Bloomberg data Valuetronics is a leading design, manufacturing partner for the world’s leading brands in the consumer, industrial and commercial electronics sectors. Some of its OEM customers have included Philips, Dymo (a Rubbermaid brand), HID, Sensitech as well as Nasdaq-listed TransAct and Toronto-listed Hemisphere. Its ODM customers have included Graco (also a Rubbermaid brand) and KitchenAid, a subsidiary of home appliances giant, Whirlpool Corporation. Valuetronics' stock price started running before its results announcement and continued to do so in March, after a 4-week overhang from investors taking profit on the January-February run-up. The stock was up 16% from January through 11 February, when it announced that profit attributable to shareholders for 9MFY2014 had doubled to HK$108.4 million. From 28 cents on 11 March, the stock surged by another 18% to 33 cents on 31 March. One reason for the earnings surge was because 9MFY2013 earnings had been dragged down by losses from discontinued operations due to the termination of its licensing business. Related stories: 50-Stock Portfolio (Low PE, P/B, Dividend Paying): 1Q Gain Was 3.3% Only Stock picks for 2014: Will these 50 stocks outperform? |
