Small-Cap Value Opportunities (Guest: Tucker Scott)
Jun 1, 2024
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Former Templeton Mutual Fund manager Tucker Scott shares insights on undervalued foreign stocks, emphasizing dirt-cheap picks. Discussion covers his strategies, successes, and criteria for stock selection. Also explores market turmoil, currency movements, small-cap Chinese companies, sector rotation analysis, and casual chat about health and surfing plans.
Invest in undervalued foreign stocks like Zen Game for steady growth and robust balance sheet.
Consider Ha-Por Corp for a compelling investment opportunity with solid asset base and consistent performance.
Explore Wacian for an investment opportunity with wide asset valuation gap and potential profitable outcomes.
Deep dives
Zen Game - A Sticky Business with Growth Potential and Favorable Valuation
Zen Game, listed in Hong Kong, is a company specializing in traditional Chinese tile, board, and card games like mahjong. With a market cap of around $460 million, it boasts a significant net cash holding, a 6.5% yield, and strong growth, averaging 19% to 98% in recent years. Trading at a discount to net asset value, investors can benefit from its steady growth and robust balance sheet.
Ha-Por Corp - Singapore's Hidden Value Gem with Diversified Asset Portfolio
Ha-Por Corp, listed in Singapore under ticker H-P-A-R, offers a compelling investment opportunity with holdings in UOB, a leading Singapore bank, UOL, a land company, net cash, and even Tiger Balm. Trading at a 60% discount to net asset value, Ha-Por provides a 4.1% dividend yield and potential for special dividends, backed by its solid asset base and consistent performance.
Mitsui Mitsushida - Transitioning from Coal to Diversified Business Portfolio
Mitsui Mitsushida, 1518 in Japan, underwent a strategic shift from a coal business and currently operates a diverse portfolio of consumer and industrial businesses in Japan. With a clear transition plan and a high-speed data asset value, this stock has shown significant potential and benefited from a Western activist's involvement.
Wacian - Hong Kong Stock with Significant Asset Valuation Discrepancies
Wacian, listed as 3393 in Hong Kong, presents a unique scenario where its 40% subsidiary listed in Shanghai fetched a valuation 3.5 times higher than its parent company's value. With unlisted businesses contributing additional value, Wacian showcases a wide asset valuation gap, offering a compelling investment opportunity for those aware of the discrepancy.
Discussion on Stock Discrepancies and Market Trends
The podcast delves into discrepancies in stock prices, discussing buying opportunities where stocks may be undervalued compared to their true worth. It highlights instances where gaps in stock prices persisted for years, eventually narrowing, leading to profitable outcomes for investors. The conversation also touches on exploring reasons for these discrepancies, such as subsidiary performance influencing stock gaps and trends in the market leading to potential investment strategies.
Transition to a Different Lifestyle and Market Speculations
The episode shifts to a personal narrative, detailing a transition from living in the Bahamas to Montana, emphasizing natural beauty and lifestyle changes. It mentions exploring Glacier National Park and the influence of personal choices in relocating. Additionally, the podcast speculates on market trends, discussing potential breakouts in energy sectors, precious metals, currencies, and stock indices, hinting at possible future market movements and investment strategies.
This week Kevin and Patrick welcome to the show, Tucker Scott from Bergen Park Capital. They dive into his career managing the Templeton Mutual Fund, highlighting his strategies and successes. Then, he unveils his top picks for undervalued foreign stocks, emphasising that when he says “cheap,” he means stocks that are unbelievably dirt-cheap.
