Company in a boring industry

As promised, I will select one stock in a boring company which has all the potential to be a multi bagger, but do make your own judgement call:

Emivest:

Profit attributable to shareholders
2008-RM 11, 273, 373
2009-RM 17, 348, 627
2010-RM 21,434, 809
2011-RM 37,000,000

Fundamentals
As can be seen, from 2008-2010 their profit has increased albeit slowly in very lousy industry. The industry: livestock feed and duck breeding. Not something you would be particularly proud to own.
but for crying out loud, look at that earnings! i always use 2008 as my base because if you can earn money in 2008 (financial turmoil), you can be damn sure they can earn in the future.

PE: less than 2, ( for those who do not understand how PE works, i will explain in my next blog and why i adamant on selecting low PE stocks.) where on earth can you find a company that grows their profit every year at such a low PE.

They have branched out to Vietnam in their pursuit of growth for their duck business and in the future, their earning will still be growing ( nothing spectacular) as they can replicate their successful business model, their efficient operations without much of a glitch or errors that may impair their earnings. This is what i would call Replicable Development Model. The higher the RDM the better it is for their earnings.

Heaven


Now with the current market situation, share prices will definitely drop. And with the company in such boring industry it will take a while before lady luck shines on her.

A risk associated with heaven would be that a bird flu suddenly comes along and all the ducks are killed off. Now that would be catastrophic but it is something that we cannot have control over. Just be weary of such forces of nature.

Human

Your share price will only go up if there is someone who is willing to pay a higher price for your part ownership. And Emivest has very low trading volume, thus their share price may just linger there for months of not years as nobody would pay any attention to them. Is that a good thing? Well, if you are here to make a quick buck, i suggest you just dump all your money into football betting, twice the thrill and twice the potential pay-out!

I am perfectly happy to hold on to a part ownership of a profitable company for many years, waiting for their stock price to reflect their true value. Thus if you have the same mentality, just be aware of this.

Conclusion:
Multi bagger in the making? Only time will tell but at current price of RM0.90 i would say it is a good buy.