ON Friday, Jobstreet was picked up by our momentum algorithm for the second time last week, after volume more than quadrupled to 23 million shares. Since the stock was first picked up last Monday at 32 sen, it has surged some 21.9% to close at 39 sen.

Recently, Jobstreet completed the disposal of its online job portal business to SEEK Asia Investments Pte Ltd for RM1.89 billion. It then distributed almost all of the proceeds to shareholders via a special dividend of RM2.65 per share.

With the completion of this exercise, Jobstreet still has substantial cash but will not have a core business. As such, it will be classified as an “affected listed issuer” as set out under PN17 of the listing requirements, and will need to formulate a regularisation plan. 

There are several possible options ahead for Jobstreet, and that perhaps could account for the recent increase in interest in the stock, particularly given its entrepreneurial management. 

Jobstreet may start new businesses or acquire other assets. Or it may sell its remaining assets and distribute the remaining proceeds back to shareholders. Interestingly, the company bought back some 7,953,800 shares lately. Its major shareholders, Mark Chang and Ng Kay Yip, also purchased some shares before the special dividend went ex on December 10.

Jobstreet still has a strong balance sheet, after the payment of dividends. Net cash stood at RM46.3 million or 6.6 sen per share at end-Sept 2014, excluding the assets which were sold. 

The company’s net assets stand at 36 sen per share, and are understated as it has unrealised gain of RM29.75 million on marketable securities (mainly shares of 104 Corp Taiwan) at end-Sept 2014 and an 8-storey office building in Jalan Sultan Ismail, Kuala Lumpur acquired in 2005 and valued at only RM13 million.

This article first appeared in The Edge Financial Daily, on December 29, 2014.