Global Sources is a B2B company that organizes Exhibitions (53% of revenue), has Online Services (37% of revenue) and Media services and served more than 1 million international buyers. It´s current Market valuation is 160 million. It is going to release earnings very soon.
As of September 30, 2014, the last quarter reported, company had:
- 87,757 million in Cash.
- Bank Deposits of 3,954 million.
- Finantial Assets of 3,954 million.
Property and equiptment of 64,516 million.
Investement properties of 86 million.
That is 246 million in current + good quiality assets and NO DEBT. Not often one sees a management that conservative.
Furthermore, It had a net income for nine months 2014 of 12,6 million, down from 27 million in 2013. But that year they recorded extraorinary profits of 15,5 million for the sale of properties, which they did not have this year, with a decent Return on Investement.
In any case, I never trust or invest in what seems to be too good to be true, but here there are some things one can´t ignore:
The company has been around for forty years, and It appeared a year ago on the undervalued-predictable screen (or maybe the Buffet-Munger screen), which, after seing the kind of companies that appear on that screen, is not easy.
Moreover, It seems to be an very shareholder oriented company. It won the golden award for excellence in corporate governance and investor relations in the Asset´s december 2014 issue, and the company had received the Gold and Titaniun corporate awards for the previous five years. One can also tell when looking at certain details.
To name two, It records deferred income as a liability, and even stated the sale of "three paking spaces", which I find quite unusual.
On april 2014 they made a tender offer to purchase 5 million shares at $10. Regarless of the outcome, it seems reasonable to suggest that the company believed in itself.
So I don´t have a clue as to why it sells at this price now. It is true that the profits don´t look near as good as on 2013, but the company has never had a negative year when it comes to net icome, at least in the last ten recorded. Maybe it is seen as a Chinese company, when it is a truly Global company in activitivity, culure, history and management.
I see great value here, and I already invested, but would love to hear other opinions!
