Stocks that offer great discounts to Net Asset Value

Two stocks that are in this category and on my radar screen are Innotek and Tiong Woon.

Innotek
InnoTek specializes in manufacturing precision metal components that are the building blocks for numerous devices that we use everyday. The Group's Office Automation and Consumer Electronics Components Division , which specializes in key precision stamped components, sub-assemblies and commercial tooling for both the office automation and consumer electronics industries. The division consists of 10 manufacturing facilities in China and Europe.

At the last transacted price of 28.0 cents, it is trading at a Price/NAV of 0.43.  The management is committed to pay out a 1.0 cent dividend - even for FY2012 when it incurs  loss.  It is likely to incur a loss again in this FY as the loss incurred for the last 9 months is $10.5m or 4.7 cents per share.  Cash on hand is 34.3m while borrowing is $11.2m.  Despite of the loss, operating cash flow is strong ($10.9m in the first 9 months), partly due to the sale of Sabana Reits (net proceed of $8.18m in the last 9 months).  It still have $11.6m worth of financial asset held for investment, which is most probably the remaining Sabana Reit units it is holding.  Innotek is expected to turn around in the last quarter of this FY but will still incure a loss this FY.  I have taken a small position and will track its recovery before adding more.


Tiong Woon
Tiong Woon was incorporated in Singapore on 21 August 1997 under the name of Tiong Woon Corpn Hldg Pte Ltd. On 23 August 1999, it was converted into a public company and changed to its present name.

Founded in 1978 as a partnership to offer crane and transport services to the local construction industry in Singapore, the Group is an integrated specialist in heavy lift, heavy haulage and marine transportation with a total fleet of more than 300 units of heavy lift and haulage equipment including tug boats and barges. It has operations in Singapore, Malaysia, Indonesia and the Philippines.

In the newly released 1Q15 results, revenue declined by 17% while profit after tax decreased by 25%.  At the last transacted price of 27.0 cents, it is trading at Price/NAV of 0.47.  Dividend of 0,4 cents translate to a yield of 1.5%.  While 1Q15 profit is only $3.1m, cash flow from operating activities is $14.9m due to high depreciation charge of $7.3m and improvement in trade and other receivables of $7.7m.  1Q15 EPS of 0.75 cents translates to a forward PER of 9.0.  I have taken a small position and will track its recovery before adding more.