Riverstone Holdings Ltd

Let's me try to do a few updates on my SRS positions this weekend. Will spread it over a few posts if time permits. I want to see if it is worthwhile to continue holding some of my positions which hit all time high.

Riverstone

My entry post was here at 47c (depicted by the green arrow on the weekly chart below) and the last traded price was 62.5c (up 33% and at all time high)

Seemed like the market is finally appreciating the counter and it is at all time high. No major news announced except that the warrants will expire on 2 Aug 2013. Given that the exercise price is $0.31, most warrant holders will be converting their warrants into equity.

While it is good that the Company is receiving additional injection of equity, it is "detrimental" to existing holders like myself who are being diluted down.

The total number of shares in issue as of 18 July is 369,572,645 and this will creep up in the coming days as the Aug 5 deadline looms nearer.

Q1 2013 Result

Announced a good set of Q1 results on in May. I must have missed it due to my busy travelling and work schedule back then. keke..

"Market is a voting machine in the short run and a weighing machine in the long run ~ Benjamin Graham"

At the end of the day, earnings always drives share price performance and perhaps this is why the share price of Riverstone has been creeping up slowly. I like companies that show strong quarter on quarter performance and Riverstone has delivered on that front as Q1 profit is up by 21%. However, you can see that EPS has not increased by the same % on a fully diluted basis. 

Assuming last year's profit increased by 21%, FY2013 net profit will be around MYR 47.6m and the EPS will be around 12.9 RM sens or  5.11 Singapore cents. That translates into a forward PER of around 12.2x, which is probably trading at fair value.

The company continues to be debt free and I will continue to hold it for Q2 results. 

Happy SRSing.