Hi Aloha Mike!
There is no "hostility" toward Creaf in Singapore. Not from investors, not from government (which has given it loadsa research money and tax breaks), and certainly not from the general public. There is however, quite a bit of nervousness about the volatility of earnings, given its history. This is largely in FY96 and early FY97 when Creaf exited the CD-ROM business and two founding members left the company. As you know, the share price went to as low as S$5.05 on August 15th 1996 from a high of S$36 two years earlier (soon after the introduction of the shares on the SES). People are getting more comfortable with the company lately, especially after 5 very good quarters, but many funds are reluctant to buy the stock because (1) they don't understand technology in general, (2) soundcards, soundchips, DSPs, ISA, PCI, INTC-A,B,C,D, USB, IEEE 1394, MIDI, XG, FM synthesis, wave-table synthesis, DVD-ROM, DVD-RAM, Divx, DVD-RW, AC97, DirectX, system-on-a-chip, MMX, ActiveX, etc. etc. etc. is way too much trouble to spend on one stock (3) some of them had lost money on Creaf in the past and were too dazed to ride it up to S$46 recently. It will take time for them to learn about technology in general, and Creaf in particular. And with more knowledge, they will be more comfortable buying the stock.
Also, given the size of the company, and the complexity of the technology, Creaf is easy prey for analysts who want to generate commissions. Most clients will not know what to ask if an analyst downgrades the stock, given the technicalities and the global nature of its markets (after all only 4% of Creative's revenue come from Singapore).
As for Reuters, I know the wire has policies that govern how earnings reports are written. This includes mentioning the figures including one-time items first. Then mentioning the figures excluding items. It's just house style. I don't think there was any intention of bad-pressing Creaf.
The newspapers have been quite fair to Creaf, especially Business Times has been very accurate in reporting what Sim Wong Hoo (actually) said. And locally, Merrill Lynch has been a long-time bull on Creaf (this carries weight because ML is the biggest player on the SES) so sentiment on the stock has been very good among younger investors who understand tech better.
Actually, it is precisely the poor understanding of tech that has created this marvellously undervalued stock. Based on the posts here, you guys are miles and miles ahead of the average fund manager in Singapore in terms of understanding Creaf's technology and market potential (some of you just gotta brush up on accounting and valuation). I'm loading up while the going's good.
Best of luck |
