Posted by kcchongnz > Mar 20, 2013 10:16 AM | Report Abuse 

X

Cold Eye’s yardsticks for APM Financial year ended 31/12/2013 

Yardstick 1: ROE 
APM reported an earnings of 113.6m for the common shareholders, or EPS 56.4 sen for the year ended 31/12/2012. With its net asset backing per share of 4.40, ROE is 12.8%. Not bad at all if we take into consideration that the ROE was achieved with no debts. 

Yardstick 2: Cash flow and free cash flow 
The cash flow from operations (CFFO) is 142m. This is 114% of its earnings of 125.2m. This shows the quality of the earnings is good. After spending 48m in capital expenses, there is a free cash flow (FCF) of 94.2m left which APM has already announced that they are going to pay dividends of 64.5m, or 32 sen per share. This FCF is at 8% (<5%) of its revenue which is good. Overall APM’s cash flow and free cash flow are excellent. 

Yardstick 3: PER 
APM is trading at 4.96 today. With EPS of 56.4 sen, the PE ratio is only 8.8 (<10). This is a reasonably low PE and considering that it is a debt free company and hence low risk. 

Yardstick 4: Dividend yield 
APM announced that it is going to pay a dividend of 32 sen for last financial year, or a dividend yield of 6.5%, close to twice the FD rate. Very good indeed. 

Yardstick 5: NTA 
The net asset backing per share of APM is 4.40. Hence at a share price of 4.96, the price-to-book value is 1.1 (<1.5). It is inexpensive. 43% of its assets is hard cash. 

APM meets all criteria of Cold Eye as an investment grade stock. For those who is going to harp on its ill-liquidity, the table below shows its long and short-term return from 2 weeks to 5 years. 

APM 4.96 20/03/2013