Speculating on Silverlake Axis

Recently, I mentioned that I'd sold off a few of my holdings with the idea of picking them up on the cheap later on, when the market weakened. So, since I had some spare cash lying about, I thought I'd do some short-term trading with Silverlake Axis (5CP). 

The banking software provider's stock price closed at 0.585 on Friday (15th Jul), a far cry from its days above $1.00 before a short-seller's report was published. The price hasn't recovered since. 

The company's 2Q16 profits were nothing to shout about, with a 3% drop from its Q1 earnings. Silverlake is currently on the hunt for more projects in Malaysian and Japanese banks. In the short term (3 month horizon), I expect price to be bullish based on a couple of factors:

1) Global Infotech (GIT) has been lifted out of suspension

Silverlake has a 20% stake in the China-based Global InfoTech, which was previously under suspension. The suspension has now been lifted, and as of Friday, closed at 70.65 CNY. If Silverlake goes through with its sale of 8 million GIT shares at current market price, a windfall of roughly S$113 million could result.

2) The company has been buying back shares recently 

I've mentioned before that I see this as a good sign - companies that do so often indicate to the market that they view current share price as undervalued. Their last buyback was on Friday itself, where they took 2.5 million shares off the SGX at an average price of 0.58. They began their buyback mandate last October, and they have been buying shares back since. 

As of this writing, Silverlake has been constantly buying back shares almost every trading day for the past 2 weeks.

My short-term target price (TP) is 0.635. I've scooped up some shares at 0.575. I'll try to get some spare cash of out this trade, in preparation for the jump back to blue-chips.

My Current Portfolio:

ST Engineering
Sino Grandness
Sino Grandness
Silverlake Axis

On a side note, I've realized that since the start of the year, all my stock picks have begun with the letter 'S'. SPH, Singtel, Sino, etc, etc. Huh.

Until next time.



  1. Silverlake Axis has been hit by short sellers. Risk is short selling hits it again with fraud news.

    1. Hi! Yeah, I'm aware of that risk, too - I thought the short-sellers promised a follow-up report that never materialized. Here's hoping it never materializes after all. Thanks for dropping by!


Powered by Blogger.