Sold RM Drip after results as receivables have gone up a lot and no operating leverage is seen. Otherwise, 50% revenue growth is good but not all revenue is flowing to the bottom line. Also price jumped after results so took advantage of that.
Purchased Beta Drugs at 100 only to see price quickly jump to 200 and fall back. This is into manufacturing of oncology products which is a niche and highly specialized area in pharma manufacturing. Company has another group company that does the marketing so still trying to figure out if this arrangement is risky considering that margins in pharma is mainly from marketing activity. FY 18 results are good.
Purchased Valiant Organics. This Aarti group company is into manufacturing of chloro-phenol. Company has excellent fundamentals but is merging two large group companies with itself so there are large structural changes happening in its fundamentals. Group companies that it is merging with itself have similar fundamentals but still waiting for clear picture to emerge before committing more as valuation is high.
Added RKEC after H1 results. This issue is also very volatile. Waiting for results to get an idea about order book and inflows in H2.
No changes in Worth Peripherals and Shanti Overseas. Waiting for results.
Overall my allocation to SME is small as I am still testing waters. SME index jumped 50% from Sept to Dec 2017 only to give back most of the gains earlier this year. This volatility is largely due to low float, large lot size, small market cap and half-yearly result publishing. Lot of price action is concentrated around result dates. This volatility adds to the risk without any additional return. It also means that market price is likely to be significantly higher or lower than fair value so one needs to be careful with timing and valuation.