Thursday, September 8, 2016

The Dividend Series - Powermatic Data System Ltd

I am starting a string of new posts deem as the Dividend Series. In this series, I will test some of the "usual suspects", that deem to produce 5% of dividend yield annually, against my Dividend Scorecard Portion.

Do note that these stocks are, in my opinion, "popular value stocks". There are already significant information in the internet on them. Thus, my post will be more focus on how the stock fare against my Dividend Scorecard Portion.

Read about the previous post of the Dividend Scorecard Portion as per the links below:
The Search For Dividend Stocks

The Dividend Scorecard - An Extension of Enhanced Triple S Scorecard - Part 1

The Dividend Scorecard - An Extension of Enhanced Triple S Scorecard - Part 2

So the 1st suspect is.... Powermatic Data System Ltd!

Profile in Short


Powermatic Data Systems Limited core business is to manufacture, market, and distribute wireless connectivity products and computer peripherals.

This is a stock that is heavily promoted on the internet as a value stock. One of the main reason is due to its investment properties that it holds. The properties listed in the financials are stated at book value, but its fair market value is actually almost 2 times its book value!

Based on the Dividend Scorecard Portion (Based on Present Price of $1.010):


It FAILS... Why?

1. The Value Stock Score is less than 6. This is due to the test by the Enhanced Triple S Scorecard. At its current price, the stock does not seem to be undervalued enough to score higher than 6 points. Thus, it fail this criteria.

2. Dividend Yield for the last 2 years, based on the current price, is less than 5% and further testing of price to book ratio is above 0.8. Thus, it fail this criteria too.

So how?

The power of Enhanced Triple S Scorecard and the Dividend Scorecard Portion is that you can adjust the share price to check AT WHAT SHARE PRICE WILL THE DIVIDEND SCORECARD PORTION PASS.

Therefore, I adjust the share price to 0.880... and the result has passed!

Based on the Dividend Scorecard Portion (Based on Present Price of $0.880):


In Short 

For those that didn't know, Enhanced Triple S Scorecard test whether a stock can be deem as a value stock, and the Dividend Scorecard Portion test whether at the current price will the stock be able to provide a dividend yield of 5%.
Thus, at $1.010, the share price is too high to be deem, to be able to provide a dividend yield of 5% for 2017. Only at $0.880, it will be deem good enough to provide a dividend yield of 5%.

But this does not meant that Powermatic Data System Ltd is a bad stock. 


I had watched it rise from $0.550 to the current share price. If it wasn't good, it will not have rise. For me, I didn't buy it because I deem that it was too "popular" at that time. It was just biased on my part. If not, I will have another great stock in my portfolio. 

Maybe I just wait till the share price drop to 0.880...


Current Price: $1.010 as of 08 Sep 2016.

Please do your own due diligence before you invest in this stock.

Do note the author is not vested in this stock/company.

For those who are interested to find similar quality value stock that can produce at least 5% dividend yield, you can come to my 3rd Sharing Session with T.U.B! I will only be sharing my Enhanced Triple S Scorecard with Dividend Scorecard Portion with participants of the Sharing Session. If you are interested to attend the 3rd Sharing Session with T.U.B., do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

4 comments:

  1. Dats interesting... I got a price of 0.88 as well from my calculation using Gordon's ;)

    ReplyDelete
    Replies
    1. Hi,

      You use the Gordon Growth Model?

      Hmm... that's very interesting!

      Regard,
      TUB

      Delete
  2. Yes, mate. Simple but a very powerful tool in the armory. Best of luck for us in our wait then :)

    ReplyDelete