Note. I do hope my English is not too terrible to understand. All I am saying is I am not a fan of the cash per share yardstick. That's all. I am not stating such a yardstick does not work. And like always, if you reckon your style of making money is better than mine, go ahead. I won't lose sleep. :D
Oct 30th 2008, I mumbled the following on Proton.
- The very same cash per share yardstick. Yes, compared to current price of 2.00, a purchase of Proton at 2.00 is damn sexy but the rate that Proton cash per share has diminish since 2005 Q1 (net cash of 4.25) compared to now (net cash of 2.08) is surely a concern, yes?
For example, what if the next 3 years, the net cash continues to diminish about the same rate? And if it does, the cash per share yardstick might not look attractive then, yes?
Today Aseambanker mentioned Proton's diminishing cash per share! LOL! Such a head rush yo! Getting dizzy. LOL!
- Still burning cash. Even excluding the impairment cost and R&D grant, Proton remained operationally loss-making for the second consecutive quarter. In fact, the operating loss was at RM62m (3QFY09: -RM60m). No dividend was declared for 4QFY09. Gross cash plunged 22% QoQ to RM914m whilst gross debt soared 47% to RM358m. This took net cash down by by 37% to RM1.01 per share. Book value per share fell 6% to RM9.25 as Mar 09.
Let's refer back. Say in 2005. If we go back in time to 2005 Q1.
Quarterly rpt on consolidated results for the financial period ended 30/6/2004
Proton then has also 549.213 million shares.
Net Cash = 3420.114 - 1083.896 = 2336.218. Cash per share = 2336.218/549.213 = 4.25.
Let's look at current Proton balance sheer.
Not as attractive as what Proton has in 2005 Q1.
Just imagine, if one had purchased back when Proton announced its 2005 Q1 earnings BASED solely on the attractive cash per share yardstick and held it loooooooooooong term. The end result as today, is not too attractive, yes?
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