A Dare to Buy Willowglen

Value Investing is recommending Willowglen for a strategic buy in. He gives his reasons.Here is his analysis.

Willowglen MSC Berhad, through its subsidiaries, engages in the research, design, development, engineering, supply, sales, implementation, and maintenance of computer-based control systems. The company offers hardware products, including RTUs and communication controllers. Its software products include SysLink VIDEO-SCADA software for telemetry, video surveillance, control, and monitoring functions; system simulator that allows a user to test RTU programs without a physical RTU; and Web accessibility via InterLink. The company’s products also comprise digital video recorders (DVR) and PC-based DVR’s. It operates in Malaysia, Singapore, and Europe. Willowglen MSC Berhad is a subsidiary of New Advent Sdn. Bhd.

Willowglen has a market cap of 59.5 million at current price RM 0.24 per share. It made about 8 mil for the past 3 years, which gives it a P/E of 7.4x. What makes Willow attractive?

1) Willow has very healthy balance sheet. In 1Q2009,its current asset amounts to 54.7 mil against total liabilities of 6.9 mil. In this net cash position, Willow can easily expand its business through acquisition or new market venture.

2) Great dividend at 2 cents per share per year. That gives a dividend yield of 8.3%. Due to rising revenue and profitability (refer to 1Q2009 result),Willow can easily distribute more than 2 cents dividend in the coming years.At current price,its dividend yield can easily rise to 10% next year

3) Willow is a closely held company. Its shareholders have strong experience in this industry and that bodes well for Willow to get new contract through networking.

4) Besides acquisition and special dividend, Willow is ripe for bonus issue while listing itself in Main Board. Comparing Willow with other MESDAQ companies,Willow is more than prepared to join the big boys in Main Board. If this happens,Willow 's share price can easily jump 50%.

Willowglen is a darling stock for those who likes MESDAQ companies. If you can't make money through Willowglen,I will rather shut down this blog.