Swissco

Swissco: SGX filings reveal that Swissco’s management have been purchasing its company shares as follow:

1) Senior executive director, Tan Fuh Gih, bought 100,000 shares on 29 Dec ’14 and 23 Jan ’15 at an average cost of 53.0¢ and 48.8¢, increasing his stake to 96.5m shares or 14.4%.

2) Executive director and Chief Investment Officer Kelvin Tang made his maiden purchase, buying 50,000 shares on 23 Jan ’15 at an average cost of 48.5¢.

3) Chairman Lim How Teck purchased 50,000 shares on 6, 14 and 19 Jan ’15 at an average cost of 50¢, 48.5¢ and 44¢ respectively, raising his stake to 200,000 shares, or 0.03%.

4) Independent non-executive director Madeleine Ho purchased 33,000 on 20th Jan ’15 at an average cost of 44.4¢, raising her deemed interests to 1.1m shares or 0.2%.

The recent share purchases, while small, could indicate that management is beginning to find value in its shares based on current price, possibly lending some confidence to potential investors.

In the group’s latest 3Q14 earnings briefing, Swissco guided that it’s drilling and service assets are for shallow waters and the majority of them have firm long-term contracts with National Oil Company as its end client. As such, the group would be less affected by the volatile oil environment.

Having raised $100.0m, the group has built a strong war chest that will enable it to seize opportunities that fit into its strategic growth plans.

Separately, the stock is featured as a top small-cap pick in 2015 by a local broker, who guided for Swissco to benefit from full-year contributions by eight rigs in 2015, coupled with the group’s fleet expansion program and its ability to sustain its contracts win momentum via diversification into new geographical areas.

At the current price, Swissco trades at 7.8x forward P/E. Only 1 broker covers the counter with an Add call and TP of $1.20.