Tuesday, 19 November 2013

Oxley Holdings

Oxley Holdings recently announced an impressive set of financial result. Revenue increased 1,271% from $50m to $686m YoY. Net profit surged to $250.8m. Earnings per share increased 3,304% from 0.25cents to 8.51cents compared to previous year and announced a dividends of 3cents per share.

I've purchased Oxley Holdings about 1 year ago at an average price of 25.5cents. The share price have since soared to a high of 48.5cents this week following the impressive result. That's almost double, not including the dividends collected which is about 15% against purchased price.

This has to be one of the better performance stock from my portfolio. Having said that, Oxley Holdings has only increased from 6% to 9% of my total portfolio, after the surge in share price. The reason why I didn't buy more a year ago is because
  • it's a penny stock and I'm quite sceptical and cautious about penny stocks.
  • it had a high gearing. plus high P/E & P/B at that time.

What I like about Oxley:
  • I like how their property launches are mostly sold out if not almost sold out.
  • I like the strategy where they are able to capitalize on avialable opportunities from shoebox apartment, to Industrial property with lifestyle facilities (Oxley BizHub) & Commercial plot (Oxley Tower) and mixed development, riding the bandwagon.
  • We have seen very active insider purchasing by the Directors and CEO.
And I have to mention that on 14 Nov, Oxley Holdings pledged to match public donations dollar for dollar, up to $1 million. I always like it when company gives back to society in some ways or the other.

Current Valuation
I guess the main question is about sustainability.

In comparisons to their peers,
the gearing still seems on the higher side.

Potential Growth
Oxley has done quite a number of land acquisition overseas namely, Malaysia, Cambodia and their latest London on top of the latest local acquisition along Stevens Road. With many rounds of cooling measures in Singapore, it might not be a bad idea going abroad. But this also expose the company to FX risk. Only time will tell.

So, will I continue to hold, buy or sell? I will probably do a trailing stop loss to protect my profit. But I doubt I will be adding any, because I'm not very comfortable with the gearing plus the economy seems to be at it's peak now. I've rather be cautious.

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