Shares of shipping, transport, hotels and logistics company, Steamships Trading Company Limited (ASX: SST), today resumed trading following a mandatory suspension announced yesterday.
In an announcement from the ASX yesterday, SST investors were precluded from buying or selling shares because it did not lodge its annual accounts.
Despite being an extremely illiquid $900 million company (in the last six months just $240,000 worth of shares have been traded), SST has achieved compounded annual total shareholder returns of 26.7%.
Whilst its low liquidity levels can be put down to a very large holding from John Swire & Sons Limited, amounting to 72.12%, the company did not provide an explanation for the late lodgement of its accounts.
Although the company may have provided strong returns in recent years, investors considering entering the stock must be prepared to deal with the issue of low liquidity. In addition, this isn't the first time SST has been late to lodge its annual accounts.
Retail investors have enough considerations without the added hassles of liquidity and compliance. Personally, I prefer to have the flexibility of being able withdraw money from an investment in a timely fashion, which is one of the benefits of sharemarket investing.
However, if you're investing for the long term (10 years or more), SST has a good record of earnings and dividend per share growth, albeit slightly volatile.
