Saturday, April 24, 2010

Bought some more Aztech

I bought 19 lots of Aztech today after my late night review on it last night.

On hindsight, it was fortunate I managed to review it last night, to capture the panic sell today. I'm still cautiously optimistic about the prospects of this company.

Why 19 lots? Because I had 31 lots originally, and this top up my holdings to a nice round number of 50 lots, and an additiontal $4.56k was pumped in.

With this newest purchase, my average monthly dividends would now be about $690.

The reasons why I bought it.

1) NAV has risen to 23.35 cents. At 24 cents, it isn't too much higher.
2) Gearing has dropped, which is something positive to me as mentioned in an earlier post.
3) Core business of Electronics Business remains strong.
4) Gross profit is higher than the previous quarter, 4Q2009. Why compare solely with 1Q2009?
5) Finally, the technical reason. It's near a few supports:

As seen from the chart,
24c is the
1) 50% fibonacci retracement level
2) Backtest support of symmetrical triangle
3) 100 DMA support
4) Previous mini top at 24c to become a support now
5) below the daily Bollinger Band
6) Just a few cents above the major support of 200 DMA

Prices should remain weak, but well supported around the 24c region for the short term :)


  1. bro i urge u to see this not as a div stock. it shouldnt be viewed as one until u see its business model delivering a sustainable cashflow. cheers.

  2. Do you expect it will continue to pay consistent dividends for the next five years with its current business model?

  3. Hi Drizzt,

    my main reason for buying is not the divvy. The divvy is just an incentive, a cushion, in case I'm wrong.

    The main reason is I believe in the growth potential and diversification of this company, because it is similar to how I manage my life at the moment. The things they do sort of resonates with me...

    So perhaps, FA, TA and gut feel all plays a part in this choice. :)

  4. Hi Cw8888,

    I believe the dividends will not only be consistent, but slowly increasing over the next few years. Of course, I won't deny that I might be wrong, but this is my belief at the moment, which led me to buy this stock.

    And of course, if one day the reason for purchase isn't there anymore, I will look to exit it.

  5. Hi JW,

    Just a word of advice - how companies are run in terms of "diversification" is quite different from how we run our personal lives, so even though the Company's business model may resonate with you; one should take a step back to ask if it will work in the long-term. For individuals, having multiple income streams is a good thing as it helps to improve overall cash flows, but for a company to be too diversified may mean a loss of focus.

    It may be prudent to study what their margins are for the LED contract and also their food business before committing more money to the Company. These two businesses traditionally have very low margins because the products involved are pretty much commoditized.

    Good luck!

  6. Hi MW,

    thanks for your comments. I have just emailed some questions to Aztech IR. Shall wait for their reply :)

  7. JW, we look forward to the replies.

  8. Hi Drizzt,

    Me too!

    A preview of the questions:

    I'm a minority shareholder, and I would like to ask a some questions regarding Aztech.

    1) Aztech has current liabilities of about S$26.6 mil. How would Aztech plan to service this debt?

    2) The Material Supply Segment has seen a drastic drop in revenue after the completion of contracts in 2009. Are there any reasons why no new contracts have been secured even though Aztech is cautiously optimistic about this segment?

    3) Aztech has recently diversified into the F&B business on top of Electronics, Marine Logistics and Material Supply. I believe there are concerns on whether Aztech is under diworsification instead of diversification. I would like to ask
    (i) if Aztech would lose focus on the strength in the Electronics sector by being too diversified?
    (ii) the decisions or choices of which business to enter when diversifying.
    (iii) if there are any synergies between the different businesses that Aztech is diversifying into, i.e. F&B.

  9. Hi wealthbutch, are u keen to advertising opportunities? Email me at sgbluechip@gmail.com k! Thanks bro!

  10. Hi SgBlueChip,

    thanks. Sent you an email.


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