How I made over 60% profit in 5 months from an Undervalued Stock
Back in Jun, I did a case study about a peculiar company named S i2i Limited. It was an interesting stock because I actually did invest in the company and today, I will share with you the whole process on how I made over 60% from that stock in just 5 months.
After reading in depth about the company, while the company did not have a good track record of profits, the recovery actions taken by the management was encouraging.
- Cutting operating cost
- Shut down loss-making business
- Return shareholder value through special dividend
Most importantly, it was trading at a price much lower than its intrinsic value!!! It was almost like buying $1 for 50cents
So I did what I learned from many gurus… I bought @ $1.50 in June and left it in my portfolio.
By end June, I have already received the special dividend of $0.73 per share back into my pocket. Therefore, my real cost of each share is now $0.77.
And since then, it has been rising up steadily….
I recently sold at $1.75 so that a profit of $0.25 from my original buy price of $1.50. With the special dividend, my total profit is $0.98. And thats a 65% profit over my capital investment of $1.50 per share!!
Of course, I must caveat that not all undervalued stocks will appreciate so quickly like S i2i Limited. However, if you have the patience and the business is sound, it eventually will appreciate to its intrinsic value!
Hope this sharing is useful for you! Let me know if you have any questions!
See you soon!
Investing Always,
Pete
