AGVA - Why I missed the chance to sell?

AGVA Corporation Limited is a manufacturer of specialty multi-purpose and media storage products. Established in Singapore in 1983, AGVA was listed on the Singapore Exchange in July 2003. It's product includes sling bag, laptop cases, camera cases, CD/DVD wallets etc.



I first bought into this company via IPO subscription on 22 Jul 2003. I was lucky and got alloted 3 lot, priced at $0.21 each. I took a quick profit at $0.26 for a small gain of $127.79.

Subsequently, I picked up 10 lots of shares in this company on 09 Feb 2004 at $0.235 and in a hasty manner, 2 more trades in Mar 04 for 30 lots, and 1 trade each in May04, Jun04 and Sep04 in averging my costs to $0.21608 for a total of 80 lots.

I was too optimistic in this small company as I thought its house brand products were taking off and further, the company had very good operating cashflow with high yielding dividend payout.

As it turn-out, I was quite right on the positive operating cashflow and dividend payout, but grossly wrong on the prospects of its house brand. Although the company grew its revenue from 2003 to 2007, the absolute sales of its house decreased and the operating margin of the company decreased from 15.4% in 2003 to 5% in 2007. As of Sep08, my estimated intrinsic value for this company is only $0.087 which is only 40% of my purchase costs.






During my review thoughts on Jan 2006, I had intended to sell or reduce my exposure in this company. I had a chance in Jun-Jul 2007, but alas, I did not sell. I was too greedy and thought the price would keep going up as the volume was high then. I also did not want to realised a loss then. On the hindsight, if I had sold some of the 80 lots at $0.14-$0.15 that I have, I could have bought back now at 50% that price, $0.07.





This is a lesson to be remembered. Hopefully, the company could perform better in the comings years, one consolation is that there are quite a few insider buying whenever the price dip too low.