1) tap water. (best beverage ever)
2) milk.
3) shin ramen.
4) rice. white rice. period.
5) korean BBQ.
6) and more water
Saturday, December 3, 2011
Sunday, April 24, 2011
Saturday, January 22, 2011
Indicators. They suck.
In trading commodities or currency (forex), the best thing to do is stick to what the other investors are thinking. Traders tend to use complicated indicators or some prestigiously-long-bombastic named indicators to trade. They are tons of experts out there who understand the maths behind all those indicators, follow them and still make quite a huge margin of losses. Why?
Trading commodities or forex IMO based on only 2 contexts. (1) NEWS. (2) investors' psychology. This kind of trading based on the herd. The more frequent an indicator is used, the better it will perform. However, the most common mistake investors (i would call them traders) make is trade solely on a few type of indicators, and forget about the herd of traders behind them. I watched the foreign exchange for past few months, and realized 1 big thing -- trading is insanely addictive.
The basic ideas that people tend to forget (as they learn more about indicators) are the support and resistance theory, the trend line and simple candlestick theory. Support resistance can be said as the most widely use trading concept that traders start off with (100% i bet). however, experts are dumb. especially those who charge you for trading with them.
I personally follow a few forex blogs. so called experts. all i can say that less than 50% of their prediction holds true (it is supposed to be a 50-50 thing). and if i were to trade commodities or forex, i would never trade with them. However, trying on an account, i realize that it will be hard to control your so called emotion when ur heart is beating at a rate of 250 per minute. :) false breakthrough occurs like a million times a day, and only one of them is the right one.
catching breakthrough is hard, however, i would prefer catching it after the breakthrough is confirmed although i have to forgo a few pips (or points). jumping into the market after a resistance breakthrough is rewarding, but highly risky (i failed like a gazillion times). i prefer jumping in after a 10 pips breakthrough on a strong physiological level (like the 1.600 of GBP-USD during the QE2) or a 15 or more pips. I don't use indicators (although i would peep at them) and trade based only on S&R line, trend line, and indecision candle and breakthrough. At least these will be the principle that i will hold on to on the upcoming commodities challenge.
PS: I hope I could make it to the 2nd round of the CME challenge. :) who knows i might score an internship with CME :)
Trading commodities or forex IMO based on only 2 contexts. (1) NEWS. (2) investors' psychology. This kind of trading based on the herd. The more frequent an indicator is used, the better it will perform. However, the most common mistake investors (i would call them traders) make is trade solely on a few type of indicators, and forget about the herd of traders behind them. I watched the foreign exchange for past few months, and realized 1 big thing -- trading is insanely addictive.
The basic ideas that people tend to forget (as they learn more about indicators) are the support and resistance theory, the trend line and simple candlestick theory. Support resistance can be said as the most widely use trading concept that traders start off with (100% i bet). however, experts are dumb. especially those who charge you for trading with them.
I personally follow a few forex blogs. so called experts. all i can say that less than 50% of their prediction holds true (it is supposed to be a 50-50 thing). and if i were to trade commodities or forex, i would never trade with them. However, trying on an account, i realize that it will be hard to control your so called emotion when ur heart is beating at a rate of 250 per minute. :) false breakthrough occurs like a million times a day, and only one of them is the right one.
catching breakthrough is hard, however, i would prefer catching it after the breakthrough is confirmed although i have to forgo a few pips (or points). jumping into the market after a resistance breakthrough is rewarding, but highly risky (i failed like a gazillion times). i prefer jumping in after a 10 pips breakthrough on a strong physiological level (like the 1.600 of GBP-USD during the QE2) or a 15 or more pips. I don't use indicators (although i would peep at them) and trade based only on S&R line, trend line, and indecision candle and breakthrough. At least these will be the principle that i will hold on to on the upcoming commodities challenge.
PS: I hope I could make it to the 2nd round of the CME challenge. :) who knows i might score an internship with CME :)
Wednesday, January 19, 2011
Mr Apple is sick! :(
Team,
At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company.
I have asked Tim Cook to be responsible for all of Apple's day to day operations. I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.
I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.
Steve
At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company.
I have asked Tim Cook to be responsible for all of Apple's day to day operations. I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.
I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.
Steve
Friday, January 14, 2011
Compounding
Here's a little tools that might inspired us people to experience the 8th wonder of the world -- power of compounding.
http://partners.leadfusion.com/tools/motleyfool/savings02/tool.fcs
http://partners.leadfusion.com/tools/motleyfool/savings02/tool.fcs
Friday, January 7, 2011
On Dividends
2 cases on dividend (will be a superrrr long post)
CASE 1
Someone saying, "hurry up, buy the stock of Durian Sdn Bhd, the company is giving out dividend!" and the next moment u rack up hundreds of lots of company, hold it, and wait patiently for the dividend.
you tell yourself, 'im just gonna wait for my company to give out the dividend, and will sell it back INSTANTLY'. so u waited. and yes, Durian did give out dividend.
but between the time period where the company decides to pay dividend (declaration date) and the dividend is actually paid out, your share price falls.
so you got your dividend, sell back your share at a slightly lower price, and sit down wondering 'did i actually make money?'
well sadly, no. how i wish to say yes, but, truly, if everything is put aside (assuming that market is smart and adjusts at a fast pace) you just got yourself nothing. maybe a loss of small amount of brokerage fees.
well before people going around saying HOW CAN THIS BE? the company is giving out dividend, isn't it a good thing? price should rise! yea true. 1 assumption i made in this theory is by assuming that the market is efficient (i undergo a stressful time trying to convince myself that EMH hypo holds truth in it) and people are RATIONAL.
before delving further into this theory, Share Dilution must be understood. Durian company has 100 000 outstanding share at $8. if Durian decided to split it shares 2-to-1, it will have 200 000 at $4. Market Cap remains the same. is this dilution? Well, NO. NO NO NO.
dilution can be categorized as dilution (sounds awkward here) if and only if there is a change in num of outstanding shares WHICH affect current shareholders in negative way. for example, Durian decided to give the newly appointed squirrel-hunter 100 shares to motivate him to work harder. the new num of outstanding shares is now 100100. well as a shareholders, its bad news! now instead of dividing the pie (earnings, valuation…) into 100 000, you have to divide it by 100100. now this is called dilution.
back to the dividends. now u think that buying a share before the dividend is given out is good. well, u need to understand where dividend comes from. basically part of the company earning is given out as dividend. thus, dividend comes from earning. do u realize whenever a company announce a dividend payout rate, the share price drops a little? well that is because dividends is part of earning which is part of the company valuation. its in the income statement. if dividend is pay out, free cash in the company will drop and the valuation of the company will also drop. people will value the company at a lower price. make sense right?
so u see, dividend is part of the company earnings. so giving out dividend will lower the value of the company. but u get the cash. ignoring brokerage cost, you actually earn nothing and lose nothing. but you will say hei, i actually earn through this way! well, that will bring to another point that has nthg to do with company valuation and balancing. its mainly due to behavior investing-- herd instinct.
well I'm not gonna talk much about that. its just basically people do what others did, and thats what make the market inefficient. company that is giving out dividend will forgo the benefits which could be gained from reinvesting the free cash. depending on whether the company is a growing company or a mature company, dividend might be a good or bad thing. well google don't pay dividend.
CASE 2
Durian company CEO Wahlen Bahfet announces 'well we are not giving out cash dividend! we are giving out stock dividend! for every 1 shares, u get 2 for free!'
YIPEE! initially you have 10 shares. now you have 30 shares! too good to be true? no. it is not even good. but true.
take for example Durian has 100 000 shares. by giving out 1-to-2 stock dividend, Durian will have 300 000 outstanding shares. ISN'T it and indirect way of splitting the stock? knowing that 100 000 shares will be 300 000 shares, the share price will definitely falls from 9 to 3 (in an efficient market). but CEO Wahlen Bahfet isn't stupid. he will definitely couple it with some amazingly good news like "Angmor is starting to love durian! sales will increase!" or "we found a new way to produce artificial durians using rocks which taste like durians."
you will be happy. people will be happy. good news + stock dividend. outlook is good. despite the indirect way of splitting the share, stock dividend has high chances (if couple with good news) of preventing the share price from dropping (sometimes even push it up!).
remember: if Durian give you 1 for 2 stock dividends, everyone get it. e.g. if u own 5% of Durian company and it is giving out 1for2, or 1for10, or 1for1000 stock dividend, u will still own 5% of the company. nothing actually changes. just the behavior and outlook of the people have changed. for me, i see this as (1) bad things happening soon and the company is trying to keep the shareholders happy by giving stock-dividend (not cash dividend) so they don't sell. (2) company wants to stop giving out cash dividend but don't want to do it in a obvious way. so the company 'lie' by giving out stock dividends. and whenever the company stop giving out CASH-dividend, its time for you to watch out. the end of the world is arriving soon.
thanks for reading. :)
PS: the "you" is not intended for anyone. its just the easiest way to writing this down. the above article is just a note to remind myself that not all dividend is good.
CASE 1
Someone saying, "hurry up, buy the stock of Durian Sdn Bhd, the company is giving out dividend!" and the next moment u rack up hundreds of lots of company, hold it, and wait patiently for the dividend.
you tell yourself, 'im just gonna wait for my company to give out the dividend, and will sell it back INSTANTLY'. so u waited. and yes, Durian did give out dividend.
but between the time period where the company decides to pay dividend (declaration date) and the dividend is actually paid out, your share price falls.
so you got your dividend, sell back your share at a slightly lower price, and sit down wondering 'did i actually make money?'
well sadly, no. how i wish to say yes, but, truly, if everything is put aside (assuming that market is smart and adjusts at a fast pace) you just got yourself nothing. maybe a loss of small amount of brokerage fees.
well before people going around saying HOW CAN THIS BE? the company is giving out dividend, isn't it a good thing? price should rise! yea true. 1 assumption i made in this theory is by assuming that the market is efficient (i undergo a stressful time trying to convince myself that EMH hypo holds truth in it) and people are RATIONAL.
before delving further into this theory, Share Dilution must be understood. Durian company has 100 000 outstanding share at $8. if Durian decided to split it shares 2-to-1, it will have 200 000 at $4. Market Cap remains the same. is this dilution? Well, NO. NO NO NO.
dilution can be categorized as dilution (sounds awkward here) if and only if there is a change in num of outstanding shares WHICH affect current shareholders in negative way. for example, Durian decided to give the newly appointed squirrel-hunter 100 shares to motivate him to work harder. the new num of outstanding shares is now 100100. well as a shareholders, its bad news! now instead of dividing the pie (earnings, valuation…) into 100 000, you have to divide it by 100100. now this is called dilution.
back to the dividends. now u think that buying a share before the dividend is given out is good. well, u need to understand where dividend comes from. basically part of the company earning is given out as dividend. thus, dividend comes from earning. do u realize whenever a company announce a dividend payout rate, the share price drops a little? well that is because dividends is part of earning which is part of the company valuation. its in the income statement. if dividend is pay out, free cash in the company will drop and the valuation of the company will also drop. people will value the company at a lower price. make sense right?
so u see, dividend is part of the company earnings. so giving out dividend will lower the value of the company. but u get the cash. ignoring brokerage cost, you actually earn nothing and lose nothing. but you will say hei, i actually earn through this way! well, that will bring to another point that has nthg to do with company valuation and balancing. its mainly due to behavior investing-- herd instinct.
well I'm not gonna talk much about that. its just basically people do what others did, and thats what make the market inefficient. company that is giving out dividend will forgo the benefits which could be gained from reinvesting the free cash. depending on whether the company is a growing company or a mature company, dividend might be a good or bad thing. well google don't pay dividend.
CASE 2
Durian company CEO Wahlen Bahfet announces 'well we are not giving out cash dividend! we are giving out stock dividend! for every 1 shares, u get 2 for free!'
YIPEE! initially you have 10 shares. now you have 30 shares! too good to be true? no. it is not even good. but true.
take for example Durian has 100 000 shares. by giving out 1-to-2 stock dividend, Durian will have 300 000 outstanding shares. ISN'T it and indirect way of splitting the stock? knowing that 100 000 shares will be 300 000 shares, the share price will definitely falls from 9 to 3 (in an efficient market). but CEO Wahlen Bahfet isn't stupid. he will definitely couple it with some amazingly good news like "Angmor is starting to love durian! sales will increase!" or "we found a new way to produce artificial durians using rocks which taste like durians."
you will be happy. people will be happy. good news + stock dividend. outlook is good. despite the indirect way of splitting the share, stock dividend has high chances (if couple with good news) of preventing the share price from dropping (sometimes even push it up!).
remember: if Durian give you 1 for 2 stock dividends, everyone get it. e.g. if u own 5% of Durian company and it is giving out 1for2, or 1for10, or 1for1000 stock dividend, u will still own 5% of the company. nothing actually changes. just the behavior and outlook of the people have changed. for me, i see this as (1) bad things happening soon and the company is trying to keep the shareholders happy by giving stock-dividend (not cash dividend) so they don't sell. (2) company wants to stop giving out cash dividend but don't want to do it in a obvious way. so the company 'lie' by giving out stock dividends. and whenever the company stop giving out CASH-dividend, its time for you to watch out. the end of the world is arriving soon.
thanks for reading. :)
PS: the "you" is not intended for anyone. its just the easiest way to writing this down. the above article is just a note to remind myself that not all dividend is good.
Tuesday, December 28, 2010
Few things that i will hold on and like forever
Milk.
Disney Animations.
Animals.
Dinosaurs.
the rest is optional. :)
Disney Animations.
Animals.
Dinosaurs.
the rest is optional. :)
Tuesday, November 23, 2010
Mameeeee Double Decker. :) :) :)
Mamee Monster! I love mamee, my sister loves mamee, everyone loves mamee. I remember when I was young (around 11 years old), I would get a packet of double decker prawn cracker (20cents at that time) after school ended. but sometimes i preferred mamee to prawn cracker, because it came with this little packet of seasoning powder to make it tastes better. people told me that consuming the seasoning powder will cause cancer. i don't know how gruesome is cancer back then, and i always eat it. :)
At times, i would go for pringles. the more expensive potato chips as it comes only in a tube (or whatever u wanna call it). Pringles is expensive. Mr Potatoes is cheaper. I remember my sister get mad at me when i bought a tube of of Pringles when we were in Pattaya, Thailand. The reason she got mad was mainly due to the high markup price of Pringles in Thailand, compare to Malaysia. Back then, she knew it. She knew that Pringles is highly overpriced. not taking into account the excess fats and calories. which are awful for a marathon runner. :D
Now, I wouldn't mind if i choose mamee over double decker prawn crackers or vice versa. they are the same, technically. they are all under Mamee-Double Decker (MDD). (note: pringles in under proctor and gamble)
MDD currently price at RM3.38. 151m stocks. thus a market cap of RM512m.
P/E: 10.66 (2007) 6.2 (2008) 4.1(2009)
P/B: 1.00(2007) 0.76(2008) 1.35(2009)
Dividen: 0.08(2007) 0.06(2008) 0.12(2009)
EPS: 0.11(2007) 0.16(2008) 0.51(2009) 15(2010 for 2 quarters)
based on EPS, u can see a nearly 50% decline from 2009-2010 (though the quarter results are still unknown for 20103Q and 4Q). u can see mamee is not doing well compare to 2009. but compare to 2008, there is a 100% increase in earning. I wonder what happen in 2009. people suddenly go all out for snacks? people switching from rice to snacks? anyways, a decline in EPS is not really a simple "oh they perform bad this year". earnings are still acceptable.
However, revenue is ever increasing. if you wanna compare mamee quarterly revenue, what u need to do is compare similar quarter, not the quarter before it. eg, u compare 1Q2008 to 1Q2009. not 1Q2008 to 2Q2008. The main reason is because 3Q and 4Q falls on holiday season and chinese new year. thought on chinese new year, normally people don't serve mamee (you are cheap if u do this). so the 3Q (sept-dec) will see a spike or increase in revenue. holidays! children go out. they eat. students finish exam. they have mamee. people chatting away on christmas eve with a pack of mamee. now it makes sense on why 3Q2009 has a 10% more revenue compare to previous and the following quarter.
For the release of 3Q2010 report, i expect a higher revenue. thus higher share price?
Why i choose Mamee instead of other company? This is mainly due to high demand and strong inelastic demand of snacks. IMO, snacks price rises along side with population increase. Snacks comprise less percentage of one's income. Thus, cutting down on snacks are less possible during a recession or stressful time. In fact, people tends to increase consumption of snacks assuming that eating mamee releases stress! :D another thing is snacks are popular among poor or rural area. children treats snacks like gold and reaching out to people who can afford mamee is a huge gain for MDD. mamee priced at a low price (lima kupang?), affordable and versatile in every occasion, thus resulting in an stubborn and inelastic demand. Recently, Mr Potatoes overtakes Pringles in term of sales (44.8% to 41.8%) in June 2009. This further shows that Mr Potatoes (under MDD) is establishing a stronger brand loyalty throughout time. and i expect this to further flourish in the future.
MDD do export its product to various countries. mainly AUS (18% of its total export) Sg (9%) HK (7%) etc. Further expansion to neighboring country such as Thailand, Indon and Vietnam is expected in the future. MDD is planning to introduce low cost snack in Indon (which is 50% cheaper than current popular snack in indon). Revenue is expected to show in 3Q2010 statement.
another thing i like about MDD is its R&D. an avg of 3 new products released every year. and high utilization of capitals (over 80%) to produce Mr Potatoes chips. MDD also decided to invest in 10 000 ha of land in indon for palm production. this is really a nice move from MDD and further ensure future expansion.
You might think that increase in flour price, or potatoes or palm will affect the sales of Mr potatoes. However, flour, potato and palm oil only take up 10% each of the total cost of production. and their price fluctuates lesser due to the control policy. and surprisingly packaging takes up nearly 35% of the cost per pac. (plastic is cheap. and will remain cheap in the future)
Looking at the fundamentals
CA/CL ratio: 2.6 (a fairly strong credit position)
NTA/P: 1.5 (undervalue?)
CA-CL /S: 0.69 thus, CA-CL/ P: 0.204 sen of current value for every 1. (buying 20sen with RM1, excl non current asset)
cash to CA (%): 24.5%
why i choose to look at cash-to-ca is because a 24.5% is low. this could mean 2 things: 1) cash flows fast. revenue is either reinvested or used for expansion. 2) low revenue for the year? looking at high earning in all previous years and quarter, i assume MDD is doing a great job at utilizing the cash it gains from revenue.
but looking at the its price (currently):
1y low 2.00 high 3.78
3m low 3.26 high 3.64
a year ago it is RM2. i might be too late in writing this analysis. but at current price of 3.4 and a fairly good PE and PB ration, it is still worth buying. MDD is a great company with fair price. and if u think u will continue having snacks in the future despite diabetes, obesity and malnutrition treats, then go for it.
Final word: MDD R&D and expansion program attracts me. its high and steady earning is another bonus that makes MDD a buy. however, MDD is priced at a fairly high price (3.38) and assuming a future eps of 40cents and PE of 10-11, i expect a rise from current price to at least RM4 per share.
Rating: 8/10
Buy. Hold. revise 3Q statement. decide.
Mamee blue monster ftw!
At times, i would go for pringles. the more expensive potato chips as it comes only in a tube (or whatever u wanna call it). Pringles is expensive. Mr Potatoes is cheaper. I remember my sister get mad at me when i bought a tube of of Pringles when we were in Pattaya, Thailand. The reason she got mad was mainly due to the high markup price of Pringles in Thailand, compare to Malaysia. Back then, she knew it. She knew that Pringles is highly overpriced. not taking into account the excess fats and calories. which are awful for a marathon runner. :D
Now, I wouldn't mind if i choose mamee over double decker prawn crackers or vice versa. they are the same, technically. they are all under Mamee-Double Decker (MDD). (note: pringles in under proctor and gamble)
MDD currently price at RM3.38. 151m stocks. thus a market cap of RM512m.
P/E: 10.66 (2007) 6.2 (2008) 4.1(2009)
P/B: 1.00(2007) 0.76(2008) 1.35(2009)
Dividen: 0.08(2007) 0.06(2008) 0.12(2009)
EPS: 0.11(2007) 0.16(2008) 0.51(2009) 15(2010 for 2 quarters)
based on EPS, u can see a nearly 50% decline from 2009-2010 (though the quarter results are still unknown for 20103Q and 4Q). u can see mamee is not doing well compare to 2009. but compare to 2008, there is a 100% increase in earning. I wonder what happen in 2009. people suddenly go all out for snacks? people switching from rice to snacks? anyways, a decline in EPS is not really a simple "oh they perform bad this year". earnings are still acceptable.
However, revenue is ever increasing. if you wanna compare mamee quarterly revenue, what u need to do is compare similar quarter, not the quarter before it. eg, u compare 1Q2008 to 1Q2009. not 1Q2008 to 2Q2008. The main reason is because 3Q and 4Q falls on holiday season and chinese new year. thought on chinese new year, normally people don't serve mamee (you are cheap if u do this). so the 3Q (sept-dec) will see a spike or increase in revenue. holidays! children go out. they eat. students finish exam. they have mamee. people chatting away on christmas eve with a pack of mamee. now it makes sense on why 3Q2009 has a 10% more revenue compare to previous and the following quarter.
For the release of 3Q2010 report, i expect a higher revenue. thus higher share price?
Why i choose Mamee instead of other company? This is mainly due to high demand and strong inelastic demand of snacks. IMO, snacks price rises along side with population increase. Snacks comprise less percentage of one's income. Thus, cutting down on snacks are less possible during a recession or stressful time. In fact, people tends to increase consumption of snacks assuming that eating mamee releases stress! :D another thing is snacks are popular among poor or rural area. children treats snacks like gold and reaching out to people who can afford mamee is a huge gain for MDD. mamee priced at a low price (lima kupang?), affordable and versatile in every occasion, thus resulting in an stubborn and inelastic demand. Recently, Mr Potatoes overtakes Pringles in term of sales (44.8% to 41.8%) in June 2009. This further shows that Mr Potatoes (under MDD) is establishing a stronger brand loyalty throughout time. and i expect this to further flourish in the future.
MDD do export its product to various countries. mainly AUS (18% of its total export) Sg (9%) HK (7%) etc. Further expansion to neighboring country such as Thailand, Indon and Vietnam is expected in the future. MDD is planning to introduce low cost snack in Indon (which is 50% cheaper than current popular snack in indon). Revenue is expected to show in 3Q2010 statement.
another thing i like about MDD is its R&D. an avg of 3 new products released every year. and high utilization of capitals (over 80%) to produce Mr Potatoes chips. MDD also decided to invest in 10 000 ha of land in indon for palm production. this is really a nice move from MDD and further ensure future expansion.
You might think that increase in flour price, or potatoes or palm will affect the sales of Mr potatoes. However, flour, potato and palm oil only take up 10% each of the total cost of production. and their price fluctuates lesser due to the control policy. and surprisingly packaging takes up nearly 35% of the cost per pac. (plastic is cheap. and will remain cheap in the future)
Looking at the fundamentals
CA/CL ratio: 2.6 (a fairly strong credit position)
NTA/P: 1.5 (undervalue?)
CA-CL /S: 0.69 thus, CA-CL/ P: 0.204 sen of current value for every 1. (buying 20sen with RM1, excl non current asset)
cash to CA (%): 24.5%
why i choose to look at cash-to-ca is because a 24.5% is low. this could mean 2 things: 1) cash flows fast. revenue is either reinvested or used for expansion. 2) low revenue for the year? looking at high earning in all previous years and quarter, i assume MDD is doing a great job at utilizing the cash it gains from revenue.
but looking at the its price (currently):
1y low 2.00 high 3.78
3m low 3.26 high 3.64
a year ago it is RM2. i might be too late in writing this analysis. but at current price of 3.4 and a fairly good PE and PB ration, it is still worth buying. MDD is a great company with fair price. and if u think u will continue having snacks in the future despite diabetes, obesity and malnutrition treats, then go for it.
Final word: MDD R&D and expansion program attracts me. its high and steady earning is another bonus that makes MDD a buy. however, MDD is priced at a fairly high price (3.38) and assuming a future eps of 40cents and PE of 10-11, i expect a rise from current price to at least RM4 per share.
Rating: 8/10
Buy. Hold. revise 3Q statement. decide.
Mamee blue monster ftw!
Monday, November 22, 2010
Multi Sports Holdings
Multi Sports Holding. MSport 5150
Price: RM0.50 Share issued: 315m
Stock Overview:
Shoe sole producer from China. Only produces shoe sole. no others. no shoe no socks no boots. MS markets its shoe soles to shoe manufacture (it means MS is not affected directly by people's demand). High demand of shoe soles, yet low supply. At this time, demand is nearly 3 times as much as supply. Which is a good thing of course!
Its an Aug2009 IPO stock. price at an IPO price of 85 cents. I don't review IPO stocks, they are technically harder to trade. But since it has opened to public for around a year, I would look into it.
And unlike the previous stock i review, MS is a business which is fairly competitive in the future. Looking at the current earning possibility for a shoe sole business and relatively elastic supply, it is not surprising if young blooming shoe sole companies start mushrooming up. Shoe soles don't require highly advance machinery or skills to produce. Thus, resulting in a fairly elastic firm.
Fundamental Overview:
EPS(cents): 11(2007) 13(2008) 17(2009) 13+(2010 with a quarter to go).
PE ratio: 4.2(2007) 3.7(2008) 2.8(2009) 2.5(2010 estimated)
Current ratio per share(CA-CL /shares): RM0.39/ share.
NTA/share: RM0.43/share
CA/CL ratio: 4
Analysis:
Looking at the CA/CL, one will know that MS is a great stock. low current liabilities indicate a very healthy company. Most of the assets of MS is in Current Asset, which is another good thing. Current Asset provides high liquidity, and looking at the items under the current assets, 72% of it is in cash and bank balances! While only 3.6% is in inventories. This is due to high demand of shoe soles. Furthermore, this low inventories further reduce storage cost. bonus :)
Even if the company do go totally bankrupt over a day, at the same time all plant and equipment been stolen or destroyed by volcano eruption, all current liabilities are paid off, so do non current liabilities, and all inventories vanquished in the hot melting lava, shareholder will get 21.38 cents back. (initial price of 50 cents).its just a mere lost of 57%. and if the company manages to rescue some of the equipment or plant, or ran off with a few shoe soles, the number will be lower.
oh forget about my imagination. sum it up: this is a share with a NTA of 0.43 and with a large portion of it is made up from cash and inventories. cool right? u pay 50cents for a 0.43 share. slightly overvalue, but wait till we look into the earnings.
EARNINGS. this is the best part: ever increasing demand and ever increasing EPS. EPS rose drastically from 11 cents 3 years ago to an estimate of 18-19 cents in 2010. PE ratio will be 2.6 at the end of the year. 2.6 P/E ratio? is there a scam going on? or a buy back? 2.6 is so low even for a fraudulent share. is this too good to be true? I never know. what i know is from the fundamental view, fraud is not possible. and even if it might be a fraud, 2.6 P/E ratio is worth the bet right?
Try to understand the meaning behind the 2.6 PE ratio. it means, you pay RM 260 for a RM100 earning a year. it means by the end of 2.6 years, a double on your initial investment and an ownership of everything in the company (well depends on how much u put in). Too good to be true? well…
then why does the share price drop from an initial 0.85 to 0.50? try googling up. you will find a good analysis on the insider effect of MS company. and also herding principle caused by some of the major stakeholders.
oh btw, 2010 and 2011 divined is expected to be around 8%. another bonus. :D
Some more reading should be done on this stock, but in conclusion:
Potential earning stock, nice current ratio, high cash in hand indicating further investment, R&D ( i doubt WS need it) or expansion of firm.
downside:
a 2.6PE will sometimes be traumatic to some people. elastic firm (if u get this stock, don't expect to hold it for 10 years).
Rating: 9/10
Buy. Hold. and Review.
PS: buy at your own risk.
Price: RM0.50 Share issued: 315m
Stock Overview:
Shoe sole producer from China. Only produces shoe sole. no others. no shoe no socks no boots. MS markets its shoe soles to shoe manufacture (it means MS is not affected directly by people's demand). High demand of shoe soles, yet low supply. At this time, demand is nearly 3 times as much as supply. Which is a good thing of course!
Its an Aug2009 IPO stock. price at an IPO price of 85 cents. I don't review IPO stocks, they are technically harder to trade. But since it has opened to public for around a year, I would look into it.
And unlike the previous stock i review, MS is a business which is fairly competitive in the future. Looking at the current earning possibility for a shoe sole business and relatively elastic supply, it is not surprising if young blooming shoe sole companies start mushrooming up. Shoe soles don't require highly advance machinery or skills to produce. Thus, resulting in a fairly elastic firm.
Fundamental Overview:
EPS(cents): 11(2007) 13(2008) 17(2009) 13+(2010 with a quarter to go).
PE ratio: 4.2(2007) 3.7(2008) 2.8(2009) 2.5(2010 estimated)
Current ratio per share(CA-CL /shares): RM0.39/ share.
NTA/share: RM0.43/share
CA/CL ratio: 4
Analysis:
Looking at the CA/CL, one will know that MS is a great stock. low current liabilities indicate a very healthy company. Most of the assets of MS is in Current Asset, which is another good thing. Current Asset provides high liquidity, and looking at the items under the current assets, 72% of it is in cash and bank balances! While only 3.6% is in inventories. This is due to high demand of shoe soles. Furthermore, this low inventories further reduce storage cost. bonus :)
Even if the company do go totally bankrupt over a day, at the same time all plant and equipment been stolen or destroyed by volcano eruption, all current liabilities are paid off, so do non current liabilities, and all inventories vanquished in the hot melting lava, shareholder will get 21.38 cents back. (initial price of 50 cents).its just a mere lost of 57%. and if the company manages to rescue some of the equipment or plant, or ran off with a few shoe soles, the number will be lower.
oh forget about my imagination. sum it up: this is a share with a NTA of 0.43 and with a large portion of it is made up from cash and inventories. cool right? u pay 50cents for a 0.43 share. slightly overvalue, but wait till we look into the earnings.
EARNINGS. this is the best part: ever increasing demand and ever increasing EPS. EPS rose drastically from 11 cents 3 years ago to an estimate of 18-19 cents in 2010. PE ratio will be 2.6 at the end of the year. 2.6 P/E ratio? is there a scam going on? or a buy back? 2.6 is so low even for a fraudulent share. is this too good to be true? I never know. what i know is from the fundamental view, fraud is not possible. and even if it might be a fraud, 2.6 P/E ratio is worth the bet right?
Try to understand the meaning behind the 2.6 PE ratio. it means, you pay RM 260 for a RM100 earning a year. it means by the end of 2.6 years, a double on your initial investment and an ownership of everything in the company (well depends on how much u put in). Too good to be true? well…
then why does the share price drop from an initial 0.85 to 0.50? try googling up. you will find a good analysis on the insider effect of MS company. and also herding principle caused by some of the major stakeholders.
oh btw, 2010 and 2011 divined is expected to be around 8%. another bonus. :D
Some more reading should be done on this stock, but in conclusion:
Potential earning stock, nice current ratio, high cash in hand indicating further investment, R&D ( i doubt WS need it) or expansion of firm.
downside:
a 2.6PE will sometimes be traumatic to some people. elastic firm (if u get this stock, don't expect to hold it for 10 years).
Rating: 9/10
Buy. Hold. and Review.
PS: buy at your own risk.
Friday, November 19, 2010
AMRB
It has been awhile since i last update my blog. :D However, I'm not back to post up stories of my life. I'm just too lazy.
This will be my first post on stock market analysis. I just wanna improve on my analytical skill so I choose to post every research I had made on my blog. It will serve as a reminder for me. I have done a couple of reading on a few small cap company in Malaysia. One of them is Alam Maritim (AMRB).
Alam Maritim is one of the largest offshore marine support vessel providers in Malaysia. It is only listed in Bursa at July 2006 (it starts operation at 1998) and provides vessel service and makes installation underwater. It obtains most of its contract form Petronas and Public service commission.
Issued shares: 531m
Price as of 18Nov: 1.20 (1M high: 1.22 6M high:1.25 low:1.04)
Market Cap. 637.2m (i consider it a small cap company)
non-current Asset- $951m
current Asset- $582m
non-current Liabilities- $572m
current Liabilities- $443m
therefore,
AMRB trade at a higher CA/CL ratio of 1.3.
However, most of AMRB assets come from their non-CA as most of it are in property, vessel and equipment. Thus, Total a TA/TL ration is 1.5. It might not be a good ratio as what I'm looking for is a company with higher CA to CL+NCL ratio.
Net asset per share of AMRB come to 0.98 or close to 1. It means its an overprice of 20 cents (price: 1.20).
However, buyer might be willing to pay 20cents more for the earning and potential growth of AMRB. earning per share (EPS) rose from 5.42 in 2005 to 17.60 in 2009. Looking at the current quarter statement of 2010, EPS might rise to 23 cent when the fiscal year end. paying 1.20 for an earning of 23 cents?! amazing rite. assuming the price stays at 1.20 for the next 2 month, PE ration will fall to 5.2 (but I'm assuming a 7)
Summary:
Continuous growth for 5 years - yes. except a decline of 2.6% in 2009.
Continuous EPS - yes. Earning from $51m in 2007 to a possible of $120m in 2010.
PER - dropping continuously from 18.6 to a possibility of near 7. amazing.
NTA/S - near $1. definitely not overprice.
NTA/P - 0.71.
DY(%) - 0.5% DY/S-1 cents. not really attracting in term of dividend.
Most of the liability are from debt. which comes to a whooping $450m of debt. However a current asset of $520m hopefully will make it a good buy.
Another thing to note: gross product have a high margin (40% avg), which means AMRB price their product at a very high price. Less competitors and an inelastic demand in this field might be cause. Thus, further earnings are pretty much secure based on high margin of product.
Final words: good buy. if price falls to $1 per share (assuming that no dilution or insider disturbance), might make it a must buy. since at $1, price-to-book will be at par. further drop under $1 per share will make it undervalue or a GNN (graham's net net) share. which is a better buy.
however, this is a small cap stock. sometimes u just cant say it for sure :P
Rating: 8/10. due to low dividend, slightly overvalue and high cash-to-debt ratio.
PS: I'm still working on writing a good analysis. note that i didn't include cash flow in my analysis as I'm not good in reading cash flow statement. :D the above article doesn't represent my position on buy or sell stock.
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