Mirror, Mirror on the Wall

Who is the fairest of them all? And the answer --- Dutch Lady.

The company started as Dutch Baby originally and changed its name to Dutch Lady in 1985.

I remembered being sent to the provision shop by my mother to buy a can of condensed milk way back in the halcyon years of 1960’s. It’s either the Blue Cross or Dutch Baby. Blue Cross is no more but Dutch Baby changed name and is very much alive today.

Dutch Lady Milk Industries Berhad (Dutch Lady)’s principal activity is the manufacturing of sweetened condensed milk, milk powder, dairy products and fruit juice drinks for distribution in the home market and for export. The Company operates principally in Malaysia.

Dutch Lady has been a darling stock of fund managers. From below RM5 in 2005, it has generated interest to move up to RM14 in 2006. Today, it is sitting comfortably at RM11.70. Capital gains have more than doubled and dividends have been good.

Even if you have bought it in 2005, the returns are still good. RM600? of dividends for expanding RM5, 000. About 8 % return to capital-better than bank rate any time and with capital gain to boot.

Dutch Lady make not do well as in 2007 as forecasted because of the rise of world prices in its raw materials but it will certainly give fair returns and fund managers will still find it attractive. When the market dips and weak sellers appears, their shares will always be snapped up by the closing bell of trading day.

Even the bad fallout of this Chinese New Year and the dip caused by the sub-mortgage fiasco in the United States recently failed to dampen the appetite of fund managers. Within 6 days Dutch Lady was back at RM11.80 .Right now, it is still cum final dividend of 10% and buyers are still eying the stock hoping to buy in on market weakness.

Watch this stock!

Quote of the Day:

‘Trust your hunches. They're usually based on facts filed away just below the conscious level.’ Joyce Brothers

Heartsong