Value Investing - Growing My Money Tree
Notion - Special Dividend in the works?
During the recent AGM, the Board Chairman revealed that the sell and least back for the properties own by Notion is on going. He added, In a very cheeky way, it will be "rewarding" to share holders....I am speculating for a special dividend.
How much can Notion gain from this recent activity? More importantly, if they do pay out, how much can they pay out?
A quick check with real estate agent web sites, the current asking price for property around the area is RM160-350
(some of the reffernce: iproperty.com 1, iproperty 2)
Assumptions:
1.These are asking price not transacted price. I will assume RM200 and RM160 as generally property around Klang valley has appreciated about 3-4 times since 2008. looking at the Jalan Sungai Binjai factory bought in 2008, this seems to be reasonable.
2.Assuming reported sq ft is for land size. It is not mention the sq ft quoted is the build up or land size. But a OSK report in 2009 seems to point this as land sizes.
3. The chairmen also say Notion will keep 2 years worth of rental as precaution. How much will this be? As a rule of thumb, rental yield is about 3-6% currently depending type, area etc. I will assume, who ever buys this properties will make 5% rental yield.
4.Talking to the financial controller during AGM, it is also known that they will keep further portion of the proceed for other investments if it comes up. How much will they keep? I am assuming 50%.
The stock price is hovering arround RM0.65 to RM0.6, if we take the mean of RM0.63, a dividend of RM0.19 and RM0.13 will give a dividend yield of 30% and 20% respectively. If we take a further 20% discount as margin of error on the speculated RM0.13 dividend, resulting a RM0.10 dividen which still gives 16.5% dividend yield.
My guest, it will be at the range of RM0.10 to RM0.15.
Will this excite the market? I have no idea.
But this exercise will surely make the financial book very impressive, reduce liabilities, increased cash.
Yet, the fact that DSL camera market is still weak base on Nikon's latest quarter report announced few days ago. Western Digital is about to announce results on 30 April 2014. This year look set to remain a flattish earnings.
Note: I am a share owner of Notion.
Happy Investing !
(For more company articles please visit: Company Analysis)
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