Getting into a stock when it is still attractively
priced is what brings in big returns on investment.
Frequently, that is hard to achieve with blue chips or
big-cap companies as they are tracked and scrutinised
by an army of analysts, and command a large following
among investors.
On the other hand, small-cap stocks tend to be under-researched
and under-promoted.
Thus, the shares of relatively small companies are often
available at attractive valuationsm despite the companies'
consistently good results and proven fundamentals.
One caveat must be raised here: small-cap companies can
sometimes take a hit unexpectedly.
In that event, their smallness means that they do not
have the financial resilience of their big brothers to
cope as well with business shocks. Size does matter, in
those instances.
So caveat emptor. Buyer beware.
Having said that, let's consider some small-cap stars
whose earnings and business have been reaching for greater
heights year in, year out and which not even an Asian-wide
recession has been able to unwind. |
|
SAMUDERA
SHIPPING LINE (30cts)
Business: Owns and charters
vessels for liquid and gas cargo in the Asian region,
and provides container shipping services.
| Turnover: |
$122.1m (1995) |
| |
$194.5m (1996) |
| |
$256.2m (1997) |
| |
$316.7m (1998) |
| Net earnings: |
$3.5m (1995) |
| |
$10.0m (1996) |
| |
$11.3m (1997) |
| |
$17.1m (1998) |
Stock: Initial public offer (IPO) in
Dec 97 at 39 cents per share. Recently traded at 30 cents,
giving a 1998 price-earnings ratio of 7.
Outlook: With the devaluation of regional
currencies against the US dollar, export cargo is expected
to remain strong. The group has been rapidly expanding
its services and establishing network into the Far East
and West regions of Asia.
It plans to continue developing feeder routes for the
Middle East region. This year, the charter for the cement
carrier and the oil tankers will commence. |
