CDW Holdings

[valuebuddies]

1Q2014 results is out:

http://infopub.sgx.com/FileOpen/CDW_Resu...eID=296886

- Revenue stable but margin dropped from 24% to 20% yoy
- Net profit down 50% yoy
- EPS US 0.3c
- Cash US 12.7c per share (theoretically 12c after the XD on 30 Apr)
- still no major information on significant customer

Assuming that this set of results last for the rest of year, we will only see US 1.2c generated for full year which raise a question as to whether the Company would maintain the same amount of dividends.

[ not vested ]

[BlueKelah]

Spotted this whilst looking at GFG's comments.

Net cash looks too juicy to pass up.

I am guessing main customer is SONY as PS Vita is probably the only handheld gameset that would have 3.6million units sold in just a quarter alone. Can't think of any other major gameset company except the nintendo ones but then nintendo does not make mobiles/handsets.

So guess for May I am not going away

Will pick up a few hundred lots for this counter, who gonna join me ;D

[GFG]

Spotted this whilst looking at GFG's comments.

Net cash looks too juicy to pass up.

I am guessing main customer is SONY as PS Vita is probably the only handheld gameset that would have 3.6million units sold in just a quarter alone. Can't think of any other major gameset company except the nintendo ones but then nintendo does not make mobiles/handsets.

So guess for May I am not going away

Will pick up a few hundred lots for this counter, who gonna join me ;D

I am currently not vested though, waiting for the right price
High Net cash alone is not necessarily a good sign-it may indicate management has no idea how to deploy it.
Still in the midst of studying this company

(Not vested)

[BlueKelah]

Well only thing to study for me really is whether the cash is really there? Main owner is japanese firm mikuni and according to annual report 2013, USD25m cash is in short term deposits with USD26m cash on hand and bank balances.

However when they then go on to mention cash denominated in USD/JPY/RMB/SGD but this add up only to USD8mil. where is the other 16m cash? is it really in cash and stored at company safe???? this has stumped me...

however 25m+8M= 33m USD = SGD 41m of FD and cash that at least is declared as with the bank. which still makes it at least 50% cash.

with the discount NAV now almost 30% i think this is a buy from me unless you guys have any further reservations.

[kikababoo]

not enough MOS for me. 70 mil NAV against 50 mil market cap (USD).

haircut abt 10 mil for their assets (other than cash).

you are left with 60 mil againts 50 mil usd. but if they bleed more (which is highly likely since 70% of sales come with one customer), this 10 mil will get eroded even more.

+ insider selling
+ previous cash transfer issue raised in the ts post.
+ the future of gameset industry.

prob have to go below 12 cts ot maybe even 11 cts for me.

[BlueKelah]

Spotted this whilst looking at GFG's comments.

Net cash looks too juicy to pass up.

I am guessing main customer is SONY as PS Vita is probably the only handheld gameset that would have 3.6million units sold in just a quarter alone. Can't think of any other major gameset company except the nintendo ones but then nintendo does not make mobiles/handsets.

So guess for May I am not going away

Will pick up a few hundred lots for this counter, who gonna join me ;D

I am currently not vested though, waiting for the right price
High Net cash alone is not necessarily a good sign-it may indicate management has no idea how to deploy it.
Still in the midst of studying this company

(Not vested)

I think management will be forced to do something with the high cash level if there continues no interest in this counter. For me as a value investor, value will be unlocked when they start to distribute that, I am not so concerned about what happens with the business so long it remains profitable. I feel we sometimes have to park some money there before announcements come.

Current depressed price is probably due to negativity over the cash transfer incident happened few years back and how management rewarded themselves for correcting that.

I am now trying to find out what it is about this major customer not doing procurement or what from CDW anymore.

[valuebuddies]

I think management will be forced to do something with the high cash level if there continues no interest in this counter. For me as a value investor, value will be unlocked when they start to distribute that, I am not so concerned about what happens with the business so long it remains profitable. I feel we sometimes have to park some money there before announcements come.

Current depressed price is probably due to negativity over the cash transfer incident happened few years back and how management rewarded themselves for correcting that.

I am now trying to find out what it is about this major customer not doing procurement or what from CDW anymore.

Probably because of the selling spree from the largest shareholder, but I think high cash wont be wrong bah, it is not an s-chip anyway.

[BlueKelah]

well at least the crew is mostly japanese and parent company is Jap so this is actually one of the few J-chips on SGX

so I do think most of the cash is there. and the illegal transfer from shanghai fiasco few years back means the management must be really strict on protocol now or they must have fired the dirty fellow.

[valuebuddies]

Aiyo, share options again, this time exercise price 10.8c, so much lower than the market price. I recall that the last share options doesn't come with any discount, could this means that the management are not so positive about the company's future? If share price really corrected to somewhere near 10.8c, I would consider to buy some.

http://infopub.sgx.com/FileOpen/Grantofo...eID=299539

[BlueKelah]

Aiyo, share options again, this time exercise price 10.8c, so much lower than the market price. I recall that the last share options doesn't come with any discount, could this means that the management are not so positive about the company's future? If share price really corrected to somewhere near 10.8c, I would consider to buy some.

http://infopub.sgx.com/FileOpen/Grantofo...eID=299539

It will be interesting to see how many are actually exercised. So CEO also got 7m share options, no wonder he sold off to recycle his money. As per last quarterly they had 29,992,000 treasury shares so this exercise will cause the treasury shares go back into circulation.

WTF bought back shares at $1 now give share option as $1. LPPL. Is this japanese style? Very funny leh. Though 19m options for the employee would be a good boost for their moral, especially the CEO

Impact on stock should be minimal but NAV will have to decrease when options are exercised as current NAV calculated without treasury shares included..

Hopefully after this they will make some aggresive share buyback with the spare cash again to replenish the treasury shares. It will be very very very farnee if that happens.

Couldn't find anything about the major customer not ordering from them anymore. And the deal with buying MT Wuxi (also another PRC based Jap factory) for .02 million with NAV of 2.2 mil is pretty impressive. so I went ahead and went in 40 lots @ 0.134 as well in this counter as indicator as I am a net cash hungry kinda guy.

-Vested-