Author: ValueGrowthInvestor | Publish date: Tue, 21 Jun 2016, 03:55 PM
Exactly 2 weeks ago, I wrote a blog post on SHH Resources Holdings Berhad as the first part of my new 'No Brainer Investments' series. The share price pf SHH then was a mere RM1.75 and people were disposing as if the stock was poison. However, in just a short span of 2 weeks, the share price has increased almost 18% to RM2.08.
As we are all already familiar with SHH's balance sheet strength with net cash of RM0.58 or 30% of market cap, cash flow prowess with 9 months free cash flow yield that already hit 12% and how undervalued it is compared to its peers using price-to-earnings 6.44x and price-to-tangible assets of 1.19x, today I will talk about SHH's future growth prospects:
1) US potential: In a presentation earlier in the year conduction by the company's vice chairman, it was noted that SHH's largest and most important customer is Ashley Furniture Industries. Many might not have heard of Ashley Furniture in Malaysia, but if you live in the US, it would be a household name being the largest furniture retailing store in the US with 460 stores. Looking at Ashley's growth plans, SHH would undoutedly benefit from higher orders.