This story happened a while ago when I was having my usual catch up with my friend. Like other prior catch up, my friend and I will usually have some casual conversation about our work and personal matters. I can't really recall what had initiated the topic of Property investment during our conversation but it was a topic that my friend had been very excited about and shared with me the wonderful experience after attending one of the property seminars over the weekend.
While I am not really deep into property, I am always open to new ideas. So I asked for further details enthusiastically and my friend answered that it was conducted by one of the popular real estates agencies, Propnex. According to my friend, it was so good that a Blank Cheque was almost handed over to the salesman during the seminar. Knowing my friend for years, I know this is not the usual self and there must be something really good.
So out of curiosity, I did a look up on the agency and realized that it is actually an exchange listed company (SGX: OYY). With deeper analysis, I also realized that its financial performance was rather impressive; key financial indicators like gross, net profits and etc have all registered a CAGR of over 20% over the past 5 years. This discovery has made me even more curious and continued my research. I realized that the CEO is very hands-on and he has been leading a highly motivated sales team. This is even so despite of the pandemic situation whereby many physical seminars can no longer be held. Together with his sales team, they continue to conduct many webinars throughout the year and continue to strive for growth.
I know I have found a growth company. But that doesn't mean I should buy it as the share price should be reasonable too. I found out that the company is currently selling at around 55 cents per share which means it has a PE Growth ratio (i.e. EPS - 5.42 for FY2019) at around 0.5. In other words, this is a very undervalued growth company. With its strong balance sheet, I am convinced that this is indeed a good buying opportunity. Fast forward to today, this company has become a multi-bagger; three key takeaways from this:
- Be open minded and curious.
- Make an effort to find out the facts.
- Take action when you are convinced by the facts.
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Disclosure: I own shares of Propnex as of this writing.
