Wednesday, August 24, 2011

So How Now?

Exactly.

:)

Let me try something new.

This is an open post. Got an idea or stock tip to share?

Everyone who is willing to share their ideas and opinions please do post here.... :)


ps: 13845454760825339051 and 08674531928566826301 ... don't bother la.

120 comments:

Richard Cranium said...

Buy Bank of America, HP, Wells Fargo, BP, Seagate, Intel, Microsoft.

What about Malaysian stocks? Nah, give them a miss.

Moolah said...

Richard, some brave choices! BoA? Woah!

Kampung stocks that bad? :P

gwynwelsh said...

Dear All,

Buy under valued plantation stocks and keep them for your children. In other words, buy and keep them long term. TSH, IJM Plant, Kulim and HS Plant are a few that you might want to consider as they are relatively cheap and affordable. China and India are growing in terms of population and affluence. If each and every Chinese and Indian have an extra teaspoonful of cooking oil, there won't be enough CPO to deliver. In the event that CPO price drops to nil, the land owned by them are still worth something. So, either way, you win long term.

Moolah said...

:)

Nah.. I don't think CPO would drop till zero. ( Me bet 10 ringgit that this will never happen. :P )

Well.. if one is really afraid that CPO could revert back to around 2400 level (iinm this was the prices we saw exactly a year ago .. and are the planters losing money then? ) , then perhaps one should consider looking at companies which are more diversified and have other business besides palm oil.

Akagi Shigeru said...

Moola :
I remembered some time ago you did blog about massive latex glove production capacity. However, there is one vital thing that you may have missed, the switching of latex glove to nitrile glove. Hartalega should be considered a rare breed. Have a look on it's past several quarters financial result and it's state of the art plant, you would find that they should not be treated as Top Glove, Kossan, or Supermax. Long Hartalega and grow together with it. Happy Trading.

gwynwelsh said...

Dear All,

The average production of CPO per ton ex-fac is RM1,300 (for the less efficient ones would be RM1,800). Unless if we see CPO dropping below RM1,800 or RM1,300 in a worst case scenario, most planters are heading to the bank with a big smile like Lee Shin Shing and Lee Oi Hian

Moolah said...

Akagi: You have a very strong point. :)

However, sometimes the market.. errr... it's the market.

Let me share you something else.... I have seen the market leader of one industry sector trades at 16x PE. A smaller company shows up with some sort of promise. However, the market decides that due to size issue, this smaller company should trade at a discount. Hence they use a 60% discount from a PE of 16x, which works out to a PE of 6x, as the basis of determining the fair value of this smaller company.

One one hand, some would agree that due to the enormous difference in size, that lofty discount of 60% is warranted. However, on the other hand, some thinks it's insane, for a PE of 6x valuation simply discriminates!

Akagi Shigeru said...

Moolah :
I do agree with you about the market. Market is irrational. Sometime I feel like Mr. Market is an idiot so we shall take advantage of that. Yeah in term of size Hartalega market cap is smaller. But it is irrational to put such a huge discount in comparision to Top Glove. Hartalega is making double of Top Glove profit past 2 quarters. Their net margin ( 25.0% )is almost 3 times Top Glove. Hartalega order is 120% of their current production capacity ( Hence the aggressive production expansion ). They don't have to slash price to gain market share. It is the lowest cost producer and most efficient. I can go on and on... but the market prices it at 1.5x Hartalega market cap. it is absurd .. Either Top glove it too expensive or Hartalega is too under valued. I will rather hope the later because I long Hartalega.

Moolah said...

Akagi: I actually wasn't comparing TG and Hartalega.

Again I have to agree with your points. :)

Akagi Shigeru said...

Mollah :
Sorry typo error. Market prices Top of Glove at 1.5 times Hartalega market cap. I know you are not comparing Top Glove and Hartalega. I am just taking it as an example. :)

Moolah said...

WOah!!!

Mollah??

lolzzzz :P

TRULY MALAYSIAN said...

Why no one mention about Kumpulan Fima?

P/e 5, NTA 1.87 and Net cash RM200 million or Net Cash per share 0.84.

Based on the current share price RM1.65, that means we are buying a company with half of the share price is REAL CASH.

With the CPO price still going strong and their monoploised business of printing money for government, please give me one resaon why the stock price at this level is not dirt cheap now?

Moolah said...

Yes, you have a valid point. I was rather impressed with its cash flow.

TRULY MALAYSIAN said...

Moolah,

Let's us join together and send GO to the Kumpulan Fima's management ...ha ha

Moolah said...

Perhaps the only thingee about KFima is the lack of coverage from the market. If I am not mistaken, only Jupiter Research has coverage on the stock.

newbie said...

Dear Moolah,
How about TECGUAN?A bit quiet on the volume side but having substantial cash net of borrowings.What do you think?Thanks.

Moolah said...

a GO?

LOL!

If a GO was to happen, it would not be on KFIMA but on Fima Corp.

As it is, KFima is losing 40 sen for every dollar made by Fima Corp. And with Fima Corp being as badly 'under valued'... perhaps it won't be a bad option for a GO.

Having said that... and because of the shareholder structure, betting on Fima Corp based on a GO perspective is not really attractive because... GO tends to limit the true potential of a share value. Meaning to say... the chances are extremely high that if a GO is served on them, they would be deeply short changed.

TRULY MALAYSIAN said...

Moolah, you are right but even Jupiter now has dropped the coverage. The Bahsir family since took over the company has done a lot for the company but they are very low profile. I think the company is very illiquid and hence that affect the share price.

Moolah said...

Eh? Jupiter did made a report on KFima's latest earnings.

K C said...

Truly Malaysian,
I follow Kfima financials very closely. Yes I cannot find a single reason why Kfima is trading at such a low price of RM1.65. The only thing is I am not sure of the credibility of the management. But by looking at its financial of past few years, I can't find any fault with the management as it has been maximizing shareholders' wealth. Earnings have been growing at a CAGR of 18% for the last five years. This earnings has been nicely translated to free cash flows every year, so much so that NTA has almost doubled and net cash improved from a negative of 35 m in 2008 to positive of 201 m now! ROE and ROIC is 16% and 56% respectively. It also fits in Moolah's criteria of diversified businesses. Plantation is only 28% of revenue with the bulk of revenue from manufacturing and printing of security paper (money also?) of 44%, with the rest in bulking and logistics, trading etc, all are profitable. At a PE of 5+ and total enterprise value 2.3 times EBIT, Kfima is really cheap.

TRULY MALAYSIAN said...

KC,based on the record, Bahsir family also own Jerneh(2n largest shareholder after Kuok Group)and Nationwide(biggest shareholder).

Based the track record of these two companies,I believe the managemnt is quite solid.

Moolah, Do you mind to send me the research report if you have one from Jupiter?

Moolah said...

newbie: Tecguan is ... err... interesting.

Earnings are still rather smallish ( under 5 mil per quarter is rather smallish for me ).

As it is, perhaps you could call it a turnaround theme ... cos the company's most recent 2 quarters earnings was boosted greatly by its palm oil kernel business.... which incredibly, its palm oil biz had taken over its cocoa/chocolate business as the main revenue/earning generator for the company.

Share base is smallish and as you are aware, its not easy buying and selling this stock in the market.

Moolah said...

K C: "It also fits in Moolah's criteria of diversified businesses"

LOL! My criteria? :P

Err... I was just commenting on gwynwelsh comments leh.

:P

See... some investors... takut... scared... since palm oil prices have indeed retraced back quite a lot recently.

And as you are aware, there are quite a number of companies... like... KFima.... who are enjoing great profit windfalls simply because they have diversified into the palm oil biz. Take for instance... Ta Ann. The big timber player... but interestingly ... timber has not being the main profit generator for Ta Ann.

ps: You are pro investor leh.

Got more tips are? :P

Moolah said...

TM: you can read it here.

K C said...

Moolah said "Perhaps the only thingee about KFima is the lack of coverage from the market. If I am not mistaken, only Jupiter Research has coverage on the stock."
I did not know of any analyst covering Kfima until I read that Jupiter does so. Can I have a copy of the report too, Moolah?
I just start reading "One Up On Wall Street" by Peter Lynch. It has a full chapter talking about not to listen to analysts' reports. First of all you will never find a ten baggers because analysts never cover small stocks. They have huge conflict of interest and all kinds of constraints in their choice of stocks to analyse and report. But if one want to make in the market, those small and out of favour stocks with excellent fundamentals will be the ones; not those big stocks with 20 analysts covering them; as when you receive their reports, the shares would probably gone up too high. I tend to agree with him.

Moolah said...

K C: you can read it from the above link given to TM. ( see comment right above yours.)

Fan of Peter Lynch too? Oh... my. :)

Yes, I do agree with what's said cos the reports tend to be badly twisted.

However... as you are well aware... stocks in our kampung... they tend to loiter without them.

So as the saying goes... you cannot live with them but yet you cannot live without them,

K C said...

Moolah,
Thanks for the report from Jupiter. I think the report is not a good one. Valuation of kfima in the report is too simplistic by using PE ratio only. I suggest you do a DCF method for valuation of Kfima with steady streams of cash flows. I know you are good in that. I will also share with you my opinion. May be we can make some money from this stock. LOL. I hope you do not reiterate your disinterest in share price again.

Moolah said...

K C: ........ errr ....... :p

newbie said...

Dear Moolah,
I remember a quote,if I am not mistaken,from a certain Mr Buffet,that goes something like this;"We don't get married because it's easy to get a divorce.":)
I think,it basically means that we should not to be put off by a stock because of it's small liquidity-lor..
And I agree with what KC said.Those small and illiquid counters are the ones which will make you the ten baggers.Not the ones which have been written to death yet hardly moves.Imagine if these illiquid ones begin getting coverage..Reminds me of an analogy..(nah,forget it;too crude)
Thanks anyway for taking your time to reply.Enjoyed the banter between you and your other sparring partners.Keep them coming!!

Moolah said...

newbie: Yes, I understand your point.

But let's look at the stock Q right now.

It's buy bid (120) is at 73 sen while the sell bid (120) is at 95 sen.

Isn't the spread way too wide?

Ok that's besides the point.

Say I don't own the stock and cos of your comments... err... I wanna buy.

How?

Where do I Q? 73 sen or a bid higher or do I CHIAK (:P) the seller?

Not very ideal yes?

And then... err... say I wanna invest 30k into the stock... I look at the traded volume... and ... the past one volume.... err.. how?

And if I am the seller... let's say I own 30k worth of this stock.. and I felt that perhaps I made an error in selecting this stock (err... assume la) ... or ... I have urgent need for money... I look at the Buy queue...

how?

And my comments 'its not easy buying and selling this stock in the market.' is based upon this perspective.

It's difficult to buy the stock.. and when I want to sell the stock... it's also difficult.

newbie said...

Moolah:
Back to the thing about marriages.You don't think about divorcing when you get married,right?Though now it's so common for people to sign prenuptial agreements..Wonder if we can have pre-agreed buyers to buy from us in the event we want to cash out??
Just kidding-lah,Moolah.
Agree that we should look for stocks which has more liquidity.It's just that if we feel that a stock is so undervalued at current price and most others feel the same way too,then why should anyone be bothered to sell?But not having buyers at current price?Then that's mind boggling..

Moolah said...

newbie: we are all different and there's no way what is ok for me is ok for you.

My thinking is simple.

I always ask myself... what if I am wrong?

I know... I should always ask and reason out thoroughly before committing to the stock.... but... stocks are stocks... and there will be many times stocks can and will prove us wrong despite all our thorough reasoning.

And if and when I know I am wrong, I always want to know that an exit route exists.

So for a stock which constantly have a wide spread... i find exiting the stock difficult.

And yes... I do somewhat agree with you that 'you don't think about divorcing when you get married' but .....then... in a bad marriage divorcing is perhaps the better option.

K C said...

Moolah wrote: ps: "You are pro investor leh.
Got more tips are? :P"

Moolah, I am no pro man. I found a lot of pros in the financial blogsphere. Every trade they did make money. Serious, not a single trade they lose money; whether it is a bull or a bear market. One of them is your good friend. You know who I meant. How I wish I am like them. Even 60% like them is good enough.
Now since you mentioned about "tips", let us look at Pintaras Jaya, another Kampong stock which there is not much trading. It is a construction company, rather a deep foundation design and built specialist in a niche market. Don't simply grab job but only good margin ones. They projected a good year for 2012 with many tenders and likely awards. I know the boss Dr Chiu. He is a typical Apek engineer. Don't simply bullshit and give false hopes. Net profit margin and ROIC at 20.4% and 20.8% respectively. Consistent yearly earnings. zero debt. At 2.30, selling at pe of 7. But it has huge amount of cash or cash equivalent. Non operating cash is RM1.21 per share! Its ordinary business worth close to 3.00 per share. Dividend has been growing fast and declaring a dividend of 19 sen for 2011, or a yield of 8.2%. Alas, like Moolah said, no analysts coverage and hence a sleepy stock. Maybe can live happily for ever with it. any comment from anyone?

James said...

I suggest Malayan Banking, for long term growth

Moolah said...

K C: lolzzz

Pintaras?

Hmmmm... now that's not a surprise.

:)

Err... i did blog several times on it before. ( I think you should not see what I wrote last time. :P )

Moolah said...

James: How would you rate the current uncertainties coming from Jakarta policies, esp the impact of Maybank's stake in BII.

freddie said...

sbccorp looks good on the report.
hirotako debt free and steady.
teoseng gives eggs for everyone.
rcecap is making a come back?

all these on my watchlist... still waiting for good time to enter.

freddie said...

oh yeah... how about cimb and why it has plunged so much?

Moolah said...

freddie: Thanks for sharing your watch list.

If you do not mind, some small comments. ( some might not be positive but these are what's on my mind)

SBC results have been impressive. No doubt. But the problem with it, its earnings has been really smallish.

How do I define smallish? Well despite the much improvement, it's half year earnings is only some 2.9 million.

And as you know, its in the property/developer sector on the main board. And since SBC earnings small, I am afraid it might find it difficult in attracting fund investors.

*my flawed thinking if you do not mind*

Moolah said...

freddie: For hiro.

Blogged on it b4 quite a long time ago.

And yes... I like its numbers, ie how the company had been performing and yes, with the 2nd airbag ruling, Hiro has all to gain. (great potential for Hiro to produce better earnings!)

However, let's refer to this posting last year (jul 2010) : http://whereiszemoola.blogspot.com/2010/07/hirotako-could-it-be-hero-of-stock.html

My simple issue?

It made good money... but then... the management went on the wildest corporate exercise... it went and purchase shares in PA Resources.

My reaction?

MMM HAI GUA!!

Arggggghhhh!

ps: I find issues as this important because I feel that I need to trust the company management of the stocks I want to invest in. It's like investing in a real small business. If you don't trust the person, would you want to be a partner?

ps: not saying the stock won't go up... just that I am commenting from an investing perspective.

Moolah said...

teoseng? Err.. this eggs major shareholders very the complicated. :P

rcecap: yes.. a possible comeback kick. :)

cimb: waaa... this one... I dunno how to comment. Me not a market player. But if I have to guess... Jakarta bank ruling is one issue and the next one is... next week. Some of these funds think on an extremely short time frame and with next week being an extremely short... some funds might reason that perhaps it's much better to hold cash. (ps.. just guessing here and I certainly could be wrong. )

newbie said...

Moolah,
Freddie spoke about TEOSENG.Wonder what you think about the poultry sector?Seemed that quite a number of them are making impressive profits from their latest quarterly reports,eg,FARMBES,HUATLAI,LAYHONG,etc.Lots of debts,though..

Moolah said...

I thought I replied on Teoseng.

"this eggs major shareholders very the complicated." (please check who the major shareholders are)

If not mistake there is GO offer for the stock too.

lofan73 said...

moola..look at faber..IFM contract is coming out soon. PE is ard 8 after taken out their cash.their cash per share is 42cents. i bet on khazanah will restucture their healthcare business soon. they will do something on the capital management

Moolah said...

lofan73: Thanks. Faber used to ne interesting. Now? It's all but a bunch of uncertainties.

I would also assume that Khazanah might restructure.

"PE is ard 8 after taken out their cash"

I do not like to look at stocks this way.

Why? Here's my flawed thinking.

Cos no matter what you and I say... ultimately the cash is under the management's control. For example, we could wish for more capex or we could wish for more dividends but if the management don't agree... our wishes just remain a wish.

Moolah said...

lofan73: I just saw this on the Edge.

http://www.theedgemalaysia.com/in-the-financial-daily/191992-faber-hss-concession-renewal-factor.html

Moolah said...

And... LOL!

Nah... I am not publishing what you wrote. :P

Errr... just trying something different.

Weii.. you got tipsy for me onot?

Mun Wai said...

oOi, Moo..... Why nowadays your are so rough ah? :/

I am waiting for you to give me tipsy. want to help me to make back the amount i spent for the past 4 moons ah :P

Have fun leh !

Moolah said...

Errr.... errrr ..... 4 moons ago?

What happened?

Did the cow jumped over the moon?

lofan73 said...

moola..thanks for the article...i always look at the cash position of a company and who is the major shareholder..n their greed mentality towards capital management. they will take a big chunk out from the company.it's a matter of time only.moreover the khazanah will never let others to run ths kind of business wif steady recurring income n my view is the more uncertainties the better it is..i will keep accumulating ths ctr.

the other ctrs r bursa,sgx and HKEX n hapseng con.wht's is ur view?

Moolah said...

lofan73: I am no good in such a strategy - ie buying in anticipating a corporate exercise.

Cos...

1. I dunno how long I have to wait
2. I dunno what kind of rewards I will get.
3. And while waiting, what will the driving factor for the stock? Will the stock be rated by its earnings or market sentiments?

Moolah said...

Woah! Richard!

You got Unker Buffy's direct line ah?

:P

solomon said...

I like FIMACORP (earning), Perdana (turnaround - hopefully dont flop again), and M3tech(smallish firm with good piggy bank)

Moolah said...

Solomon: Thanks.

Why Fimacorp? And why not the parent, Kfima?

M.A. Wind said...

You are not going to like this one :)

iCapital, NAV 2.64, price 2.03

Yes, manager made mistakes in the past, but we all do, I definetely :)

Transparancy "not that great"

But manager very stingy (good!), listing expenses brought down to a minimum, no glossy yearreport etc.

He did beat the market over a long time.

Moolah said...

LOL!

Ok. I am not liking that one.

:P

K C said...

M.A.Wind
"iCapital, NAV 2.64, price 2.03"
I think for most small time and not savvy investors, putting money in icap (23% discount) instead of following analysts' reports or rumours is better for their well being. For the past few years, icap over-performed the KLCI by a CAGR of 4%, or about 2% after allowing an estimated 2% dividend yield. I think this would have placed TTB in the top 5% of the fund managers here. Some more one can buy icap at 23% discount. Yeah closed end fund usually sold at a discount but 23% may be a bit too much. My friend who attends icap annual meeting every year says TTB is a good man, though I know many people do not like his arrogance. But one should think of is getting better return from his money. I think once the cows (bull) come, the discount may disappear. I believe TTB knows what he is doing in the stock picking, better than many fund managers.

Moolah said...

Gulp!

So many..... fans

freddie said...

i wouldnt have posted if i wasnt ready for negative comments. :)

thanks for the comments, especially on highlighting sbccorp's profit. it started as a construction company, and ventured into property sector. therefore i think the small profit justified for 82.4mil total shares issued. but then again, i raised concern on your comment about the profit. if property market is to slow or even plunge down for the next 3 yrs, sbc could eat grass. :D

as for hirotako... my guess is hiro made a big mistake on investing onto pa resources. i guess i'll have to monitor pa's profit as well. if pa turns up good profit then i guess hiro made changes on pa, which is good for long term hiro holders. i wonder if pa is a supplier of hiro, and did hiro get "friendly" costing from pa being a major shareholder... LOL!

teoseng... LOL this stubborn rock. my guess is it's good for long term holders only. profit is good but share price doesnt move much.

rcecap my long lost lover... it has solved all the issues arose last year and still holding there. :(

cimb was merely a fun comment. i see it continues to plunge to 6.50 or something but that's just me. next could be maybank... it's all up to indon gov now.

Moolah said...

Freddie you are welcome. :)

Negative comments? Err... perhaps you should consider it as a second opinion and my opinion could be flawed.

freddie said...

well, it's an open discussion. both pos/neg comments make good discussion. :)

i am also eying on drbhicom... look so cheap. LOL!

i better turn off the trading screen and watch some youtube. everything looks too cheap today.

Leno said...

I was known as King of Analabs because i bought tons of Analabs at 80 sen which later shoot all the way to RM 1.84

Now, I am King of Insas .. because i own tons of INSAS

As King of INSAS, i will recommend 3 counters

1. INSAS at 48 sen
2. Dutaland at 57.5 sen
3. MNRB at RM 3.05

Moolah said...

Good idea Freddie. :)

bonny b said...

Leno,
yr choices not bad...MNRB may be the least, but not bad at all. Rgards...

bonny b said...

Dear All,
MUI accumulation by KKP....may be privatization. Even if offered at 30sen for outstanding 25% or so of paid up shares, its cheap for KKP owing to debts owing by Hope Foundation to MUI standing at about 20sen/share. But as Moo always say, caveat emptor. Not saying u shd buy or sell. Good luck.

Moolah said...

bonny b: Woaaah!

:P

JCK said...

ooppss BofA?

GLD ler......

Moolah said...

Not SLV ar?

That was a bailout. :P

TRULY MALAYSIAN said...

KUMPULAN FIMA BERHAD
Stock Name : KFIMA
Date Announced : 26/08/2011

EX-date : 29/09/2011
Entitlement date : 03/10/2011
Entitlement time : 04:00:00 PM
Entitlement subject : Final Dividend
Entitlement description : 7.0% (less 25% income tax)

Consolation price at this bad market

Moolah said...

TM: Thanks for the update.

I guess you got one lorry load. :)

TRULY MALAYSIAN said...

ha ha Mollah still not enough to make GO!!!!!!!

Moolah said...

Who is Mollah?

^ ^

random said...

oh.. and SOP

MiB say good ma :P

K C said...

Leno's Insas appears to be interesting. It fits Graham's net-net kind of company perfectly besides having a viable going concern. However people who dabble in this counter in the last 2 years most probably won't make any money. I made RM1357 only hehe. Somehow the management doesn't seem to do the right thing in maximizing shareholders' value. Though I do not know them at all, I am very suspicious about the credibility of the management.

Moolah said...

K C: Yeah.. Insas is interesting.

Moolah said...

Woah!

Random gave a tipsy!

SOP .. err... Son Of ... err ....

Oh.... Son Of Patrice?

&^%&(% riddles.. riddeles.......

random said...

aiks my first comment didnt get thru

MSC got nice earnings turnaround

Avatar said...

Woah so many comments unlike the usual silence...

Guess depression is still someway off since greed/speculation is still in the air :)

Moolah said...

Wah! You follow MSC? :)

Moolah said...

Avatar: I am pleasantly surprised.

:)

random said...

learn from u ma..

got earnings got chancy

the rest i don much fancy

Moolah said...

Oh... Sarawak Oil Palms. :P

Not bad woah!!

Earnings came in rather strong.

:)

random said...

estate young.. still got plenty juice to come

random said...

what are u looking at?

Moolah said...

I am looking at.... my laptop. :P

lol

Err... anymore turnaround plays?

random said...

rcecap already resolve the kowaja issue (sort of)

what you think of tongher now?

freddie said...

kulim's flying color report out on a wrong time.

Moolah said...

freddie: Nearly all the plantation companies reported extremely flying colours.

Did you see SOP earnings as suggested by Random?

Moolah said...

Random: Regarding Tongher. I remarked last Jul : http://whereiszemoola.blogspot.com/2010/07/positive-development-for-tong-herr.html and on 18 Aug http://whereiszemoola.blogspot.com/2010/08/short-comments-on-tong-herr.html

Developments are positive. Did you see what's driving the earnings?

And any other potential?

Yeah.. a very potential turnaround play.

( Woah! This random being busy studying ... :P )

M.A. Wind said...

Ok, I knew already, see if you like this one ... :)

Padini, good earnings, focused, branded, strong balance sheet, price coming down nicely (can also be called falling knife....), PE of 8, all fine so far.

But what happened to the inventory? From 71m to 171m in one year time! Fashion conscience ladies do now want to buy aged inventory, if they have to take a hit there, things suddenly not looking so good anymore ....

So how ....?

Moolah said...

Sharp eyes!

Oh yeah, I am aware of that issue and I felt that Padini should be more prudent with their accounting.

But then... Padini is a favourite and at best I can point out is some dodgy inventory accounting.

:)

Moolah said...

No EPIC complaint. :P :P

solomon said...

Fimacorp for their earning visibility and lesser capital commitment if compared with holding parent.

Often holding company will be potatoes, cannot move in share price.

Moolah said...

On the other hand with parent holding 60% of the shares, one runs the risk of seeing their investment being taken private.

Moolah said...

Solomon: Oh yeah.. Perdana Pet ( or Petra Perdana).

Interesting. It could be a turnaround play... but... are we seeing the fundamental changes within the company itself?

newbie said...

Dear Moolah,
How about TGUAN?Does it fit your turnaround criteria?Seems most of the packaging companies are reporting very good earnings and lots of take over rumours surrounding these companies.First HPI was taken private,then rumours about MUDA,now there are even some hush hush going around about ORNA.So what's your valued opinion about the industry as a whole?
Thanks in advance.

Moolah said...

newbie: eh?

How about TGUAN?Does it fit your turnaround criteria?

I believe I wrote this earlier:


As it is, perhaps you could call it a turnaround theme ... cos the company's most recent 2 quarters earnings was boosted greatly by its palm oil kernel business.... which incredibly, its palm oil biz had taken over its cocoa/chocolate business as the main revenue/earning generator for the company.


As you can see, palm oil kernel biz is now contributing more to its bottom line. Does this means a shift in its core biz? If it is then one is looking at a possible turnaround theme.

And again back to what I stated earlier.

Share base is smallish and as you are aware, its not easy buying and selling this stock in the market.

Did you see what happened the past few days? Did the buy/sell queue even change?

And again on the issue of buying and selling the stock. If I wanted to buy the stock, what I pay 20 bids higher for this stock? And the quantity available was small too! How to accumulate such stock?
And also, if I was selling and assuming a real life emergency happens and I am forced to liquidate my position and assume I have 30k worth of the stock to dispose, how could I dispose when there is not enough buyers on queue? Do I sell until buyers show up?

And then... if ... indeed it is reclassified as a palm oil stock, how could it attract interest? Won't the stock be forced to comparisons against other palm oil stocks? Look at some of the palm oil stocks generating interest such as Kretam, BLDPlant, TSH, SOP, Splant. How much money are they making per quarter? Compare it to Tecguan. Tecgquan as impressive as it is, is only having net profit below 5 mil. And then the look at the buy/sell issue. How?

And oh yeah.. as said Tecquan share base is extremely smallish.

And the old school of thought, back to the days of the second board, such small shares flew to the moon. And from this perspective, some could be interested.

And last but not least I am sure you are well aware of the small float issue. The major shareholders (ie top 30 shareholders) already hold close to 85% of the shares.

Moolah said...

ps: I do like the cow and the moon.

:)

Mun Wai said...

Hey, did anyone ask you which stock(s) are you talking about ? Moolah likes wor!!Go find out !!!

solomon said...

Parent holding privatize the cash cow or good earning listed subsidiary. Mmmh...make sense but minority get bullied if the offer price is at the low end. No rule to prohibit that, what la SC or Bursa??

MUIIND case, the other way round, parent PMIIND get privatized....then what say u???

Perdana.....need good sales team to ram up the sales...just like Izzit for perisai....it is just a dream to have Hassan Merican to be inboard...

Moolah said...

Parent holding privatize the cash cow or good earning listed subsidiary. Mmmh...make sense but minority get bullied if the offer price is at the low end. No rule to prohibit that, what la SC or Bursa??

==> Well if there was a rule to prohibit that I wouldn't have this blog, yes?

With a privatisation possibility, ultimately it puts a limit or cap on how much one can make in the stock, yes? All the holding company needs to do is to offer a simple 20% premium over trading price and the public seems happy.

And sadly the public doesn't complain that much.

Take Maxis, delisting and relisting. Maxis was taken private at a really cheap price and when they relist, they relist without the prize asset.

Yeah.. this Maxis and old Maxis not the same.

ps: A good sales team enough? A sales team is just a sales team and with a poor management, the sales team ain't goona go far and last long.

:P

solomon said...

No interaction with the management wor, what you think is good management??? How we know there are bad??? Low profit and deteriorating sales... I just dream one day if I am steering the ship, I would not be the bad captain.

The problem we are facing might be we are lack of activist fund like The Children fund or billionaire like ICAhn that
could pressure the company not to bully the minority. MSWG....what u think?

PS: what is your wish for the country national day??

Moolah said...

No interaction with the management wor, what you think is good management???....

==>> Well.. for Perdana case, my thinking is simple.

How did the company get 'here' in the first place? If I am to believe a turnaround is to happen, I would want to know if it's the same old management running things. If it's the same.. well.. I wouldn't want to bet on them.

My wish for national days?

I want to see better Malaysian families.

:)

If Malaysia is to improve, the improvement has to come from within. We need to be better persons. Malaysians now too rude, lack of respect, too impatient, too selfish and also arrogant.

For me, I think the change needs to come from each family first. Build a better family and then only can the country improve.

ronnie said...

Freight Management is my pick for the decade. Net profit after tax has been growing at about 16% over the past 6 years. The business model is bullet-proof. Logistic business with low capes requirements. PER of less than 10x; attractive dividend yield of 3-4% consistently.

A third of it's business comes from other ASEAN countries and expected to grow further. Management/major shareholders are honest as per track record since listing.

Moolah said...

Ah.. that's interesting. Thanks for sharing. One of the few that's interested in the logistics/transport business. FM is certainly an interesting pick. :)

Moolah said...

Solomon: Regarding PMI. Do read posting: http://cgmalaysia.blogspot.com/2011/08/pmi-sad-story-for-minority-shareholders.html

K C said...

Moolah, Random, Appended below are ttm results of three logistic companies. all of them are doing well.
Freight Tasco Century
Price 1.03 1.50 1.67
ROE 17.7% 12.5% 17.0%
Net Profit Margin 6.7% 5.9% 14.9%
EPS 0.162 0.274 0.259
PE 6.4 5.5 6.5
EV 163372 147909 184418
EV/Ebit 6.3 4.1 4.5
Numbers for Century are adjusted for warrants and cash proceeds.
It looks like Century may be a better bargain as its ROE is slightly lower than Freight but price wise is considerably cheaper. Tasco is the cheapest one but its margin and ROE are not as good.

Moolah said...

Hehe.. I need to correct you...

it was Ronnie that posted that message. lolzzz ...

err... i think some sort of diversification is interesting for these companies.

For example.

Tasco other biz is the warehousing biz. Lucrative when mixed with logistics and if not mistaken one of its big customers is Panasonic. ( and iinm.. them big screen TVs helped sales and Tasco managed to profit a bit). Safety but also a risk is Tasco main shareholder. Its a big time Jap co but then the risk is it could face a GO threat.

A dark horse could be Yinson. Potential? Its current numbers shows strong growth and that its currently venturing big time into O&G. Risk? A below average balance sheet (there's a rights issue announced) but the biggest thing is that one has to stomach the RPTs within the company.

Century? I think its balance sheet is less than impressive.

And what about others like ILB or Konsortium Logistiks?

Oh.. and a potential booster is that I recalled that recently the sector was given permission to hike the haulage rates.

K C said...

Moolah,
I do not like Yinson because its business is more towards transportation and involved very high gearing. High gearing is risky especially for this kind of business of low margin of about3%. Negative cash flows. However, with the foray into oil and gas handling business (in Vietnam?), its fortune may change for the better, I don't know. Century's balance sheet is ok with total debt to equity ratio of about 0.3. It will be much better when warrant holders convert to Century shares, which dilution has taken into considerations in my comparison. Other logistic companies such as Integrated Logistic, Harbour Link etc, I think they are far off in performance.

random said...

There are better stocks to buy than logistic stocks lol.

Tasco has tie up with NYK thats why they get alot of japanese contracts

Yes the the rates were hiked 20% but how many customers actually pay for the pay hike lol.

This biz has high capex low entry barrier low margin

Conclusion: There are better stocks out there, why bother with these?

Moolah said...

TQ for comments, random. :)

Was waiting for others to have their say... i guess not

"Yes the the rates were hiked 20% but how many customers actually pay for the pay hike lol."

Now that's very interesting to know.

==> Quote: There are better stocks out there, why bother with these?

==> Oh yes, indeed. There's always a better stock but not trying to be hard seller of the sector but I am not sure if you are aware of the fact that some of these logistics stocks have done really, really well.

Check out the yearly charts of TASCO and Yinson. Compare it versus KLSE.

They have done rather well, yes?

ps: not suggesting anything but just sharing some fact.

Moolah said...

clicked publish accidently. :P

anyway... I wrote...

ps: not suggesting anything but just sharing some fact... cos if I were to say TASCO is a lousy stock... TASCO fans would simply shaft the stock chart into me face. Same with Yinson.

Err... i think u know what I mean la... and again thanks for your second opinion.

newbie said...

Hi,Moolah,
Sorry,but I was referring to TGUAN,not TECGUAN.My fetish with all things GUANs have got you confused!!Ha,ha.It's alright.You've got a lot on your plate already.It's also a very 'cold' counter.Do have an enjoyable holidays ahead.
P/s.All these highly 'geared' companies,maybe they are all dreaming of life on the fast lane or the forthcoming F1!!

Moolah said...

LOL!

No wonder I felt like a lembu and a kambing talk for a while.

TGuan is Thong Guan Industries.

Used to be pretty good but had a bad slump in 2007 and 2008. (iim high oil prices had a negative impact on its material costs)

Recently financials had improved the past 2 years.

newbie said...

Moolah,
Sorry for being such a kambing and thanks for you input.Happy holidays!

Moolah said...

lolzzz ... you are welcome and do enjoy your holidays.

random said...

8-2!!! FUYOH.. too bad raining I missed it :(

Anyway FYI the 20% rate increase is the last one before the anti cartel law kicks in Jan 1 ROFL

Moolah said...

I know... you were busy singing Blue Moon.

random said...

rain la.. my ass throw wont work

Moolah said...

Ur team in blue looks so strong.

I sked. :P