The Motley Fool Singapore
Isetan (Singapore) Ltd: Value Trap or Value Stock?
Benjamin Graham, author of “The Intelligent Investor” and mentor to Warren Buffet prescribed buying shares that trade below their book values. In theory, investors can make a profit when management divests their assets and returns the cash to shareholders. But what happens when there is a status quo and management is not able to unlock shareholder value? Case in point is Isetan (Singapore) Ltd (SGX: I15). The Japanese department store operator has been trading well below its liquidation value for years. As of the time of writing, it had a market cap of just over S$215 million. In comparison, as of 30 June 2019, it held S$50.2 million in bonds, S$38.1 million in cash, and owned three investment properties that are collectively valued at S$344.5 million. It also had no de