One Simple Global Stock Picking Strategy That Wins Over Time

in Public  by Anh HOANG 0 comments

I am Anh Hoang, the Chief Investment Strategist for Global Hidden Gems Portfolio (https://ghginvest.com). As a value investor myself, I have been following the value investing style of Warren Buffett, Charlie Munger, Walter Schloss, and Benjamin Graham for more than a decade. We have just launched the Global Hidden Gems Portfolio since the beginning of 2019. And our handpicked stocks meet only one simple investment criterion:

Companies that are trading at less than its net cash on their bank accounts, but still operating profitably and/or have huge valuable assets.

It is very hard to get wrong when we choose a stock portfolio which meets the above criterion.

Two typical situations in the past

Case 1: 

In 2013, a no-debt company has $20 million of cash in the bank, its assets and patents are worth around $50-$60 million, but it is trading for only $10 million on the public market. There is NO WAY that a private company can be sold at this unimaginable and ridiculously funny price. A patient investor can do well by buying a small piece of this business and wait. That company is called Digital Media Professionals. 

A result? 10x in ONE year. The share price jumped from ¥530 yen to ¥5900 yen.

Source: Google Finance

(More on that story at Investment Philosophy)

Case 2: 

Another Japanese company has nearly $130 million in its net cash, had been trading at ¥1,400 ($12.36) yen per share, making the total market cap of only $108 million, much less than its net cash on hands. It has been profitable since 2014 and growing its income really fast. Moreover, this company has a long history of paying consistent dividends. A ridiculously deeply-undervalued stock. It is called Kitagawa Industries.

At the beginning of November 2018, Kitagawa Industries got the buyout offer of ¥3,943 ($34.80) per share, nearly tripled the market price before the buyout offer, delivering sweet returns of patient investors.

Source: Bloomberg

Our January 2019 issue

In this issue, we have picked two Japanese companies and one Korean company which meet that single criterion, trading at less than its net cash but still profitable. What makes them interesting is they have been growing sales and operating profit consistently. Moreover, all three are paying growing dividends to their shareholders.

Here are the results after we have picked them on our issue of January 2019.

Our handpick monthly investing newsletter is just one out of four things that our subscribers get. In addition, as a Platinum subscriber, you can also get:

  1. A Monthly Global Sustainable High Yield Income Stock Screener, which screens stocks fit these criteria:
    1. Paying consistent dividends for at least 10 years
    2. Been growing dividends consistently for at least 05 years
    3. The payout ratio is reasonable, below 66%
    4. 05-year average dividend per share annual growth is more than 5%
  2. A Monthly Global Growth and Sustainable Stock Screener (Peter Lynch Style), which screens stocks fit these criteria:
    1. Market capitalization is less than $5 billion
    2. EPS growth consistently for more than 3 years
    3. PEG ratio is below 1
    4. 05-year average annual EPS compounded growth is between 15%-30%
    5. Conservatively leveraged, with debt-to-assets at most 50%.
    6. Low following by analysts/brokers.
  3. A Monthly Global Net Nets Screen, which screens all PROFITABLE net-net stocks around the world (excluding financial stocks).
  • PRO subscribers ($89 per month) can get High Yield Income Stock Screener and A Monthly Global Growth and Sustainable Stock Screener.
  • PLATINUM subscribers ($129 per month) can get ALL THREE SCREENERS and A HANDPICK RARE-TO-FIND Global Stocks in our monthly investment newsletter.

To prevent quick ramp-up in prices of those undervalued stocks right after we find it in the Global Hidden Gems portfolio, the service will be open to ONLY A LIMITED NUMBER of investors. After that, it will be closed to the public.

 

For more information and inquiries or suggestions, please email directly to me at anhhq@ghginvest.com or contact Member Support at membersupport@ghginvest.com.

Have a great day,

Best regards,

ANH HOANG

Chief Investment Strategist

Global Hidden Gems Portfolio

GHG Invest