VADS is a small-cap company with a paid-up capital of 61,178,000 shares of RM1 each as at 31 Dec 2005. It is 69.52% owned by Telecom. That means it has the backing of a giant. So safety is assured.
Going by its track record, I see fantastic growth in this counter, not only in its share price but also in its revenue and profits. It was first listed in the 2nd board in August 2002. I had bought some of the shares at 2.38. Last Friday, which is also the last trading day of 2006, the share closed at 6.40.
So far it has declared a bonus issue of 1 for 2. Taking this into account, a layout of RM2380 has appreciated to RM9600 without including the dividends, in 50 months. This is better than the world’s most successful investor, Warren Buffet’s 25% compounded growth rate.
VADS was transferred to the main board in March 2005. Its core businesses are Managed Network Services (MNS) System Integration Services (SIS) and Contact Centre Services). Because of its excellent services and high expertise, VADS has received several awards in 2005. These are Cisco Best Managed Services Partner Award for Malaysia, the IBM Platinum Club Award and the IBM Strategic Win Award.
With the advent of income tax e-filing, e-banking and other services based on self-service becoming more common, VADS is confident that its services will continue to be in great demand. Also of benefits to VADS will be the WIMAX factor. After its onset, computer demands and internet services demands are bound to increase. All these will benefit VADS in no small measures.
The 3rd quarter result of 13.94c is testimony to its high performance and strong management... This compares well to last year’s corresponding period of 5.83c. For the 9 months ended 30.9.06 the earnings per share is 34.46c. Last year, it was only 18.72c
VADS has paid an interim dividend of 10c tax free in Sept 06. The final dividend should be about 15c.
Going forward, I think its earnings growth will be remarkable.
Chart-wise, the stock peaked at 6.95 on Nov 14, 06. A correction took it to 5.80 where it was strongly supported. Last Friday it closed at 6.40 with 340 lots traded which is about average. In my opinion, around 6.15 should be a good entry point. If you wish to read more about VADS, go to its website www.vads.com.
This is my stock, picked for the New Year 2007. Put in your silver dollars. They will change to gold over time.
Writer disclaims all liability for his comments or advice. He holds a sizable stake in VADS.
