This is a reminder to me regarding 800 Super, taken from https://www.fool.sg/2016/03/02/is-this-tiny-stock-possibly-a-big-bargain/

Keeping Neff’s investing criteria in mind, here’s how 800 Super’s business looks like, according to data from S&P Global Market Intelligence:

  • The waste management outfit has a trailing earnings per share of S$0.10. With its current share price of S$0.44, it has a PE ratio of just 4.4.
  • Over the past five years, its net income has grown at a compound annual rate of 31%. That’s higher than Neff’s preferred range, but those are attractive growth rates.
  • In its latest fiscal year (the 12 months ended 30 June 2015), the company had a dividend of S$0.02 per share, thus giving it a historical yield of 4.5%.
  • Its trailing return on equity is an impressive 34.8%. But, it’s worth pointing out that 800 Super’s balance sheet currently has S$46 million in total debt but just S$12 million in cash; that’s not exactly a strong balance sheet

If I pull it all together, 800 Super has ticked a number of the right boxes with its low valuation, high dividend yield, and commendable growth rate. The snag here is that the firm had delivered its strong return on equity figure largely via the use of heavy borrowings.

But while there are things to like about 800 Super as an investment based on all the above, do note that Neff’s criteria is meant to narrow the field – it should not be the final investing word on 800 Super. Further research needs to be done before any investing decision can be reached on the company.