calvintaneng

Benjamin Graham - The Father of Value Investing Requires High NTA as a Margin of Safety. Price to NTA at least 30% discount would qualify. The Higher the NTA the Higher The Margin of Safety.

Of course not any kind of NTA will do. But quality assets that can be converted to liquid cash.

See

THE INTELLIGENT INVESTOR

By Benjamin Graham


If I have the time I will write on the subject

"THE IMPORTANCE OF NTA"

It will be an eye opener.

2014-09-11 21:18

miapancho

EPS or ROE?????????????

2014-09-11 21:40

bsngpg

The message from the author is very great. I have to agree with him.

I would like to speak my two cents on manufacturing industry which I have better knowhow than other industries such as banking, property or plantation.

Why look at NTA? Ooh because if unfortunately one day the company go bankruptcy, at least the assets can be sold and investors can share the proceed.

The cruel fact is that the high NTA in manufacturing industry when it is still in utilization in generating revenue today can becomes scrap metal when liquidation. The company spends a lot of money in setting up a factory and buying in expensive machine but in the eyes of liquidator, except for the land, those are not others than scrap, some even want the company to pay for the cost in scrapping the machine and demolishing the factory. So please do not be cheated by NTA.

2014-09-11 21:53

calvintaneng

Ha! Ha!

Cheated by NTA?

Transmile has 4 planes rotting away

Namfatt has 1,000 acres land in Pang Nga Bay Thailand. Tsunami killed many there

Fountain View has lands in lousy location

Megan Media has Obsolete Machines

Even TSH with 100,000 acres land Can Crash in price due to falling Palm Oil price

Learn the Skill & Art of Valuation For NTA. As I already stated, "Not just any kind of NTA will do."

What Are The Right Type of NTA?

Examples are

1) YHS (Spore) Prime Factory Lands in Bkt Timah, Spore. YHS Made more From Developing Assets than bottling soft drinks.

2) Buying PM Corp at 15 cents when it has Net Cash of 20 Cents. Plus Free Prime Lands, Investments & Monies loaned out & chocolate factory.

Do you SEE the difference?

Still don't get it?

2014-09-11 22:28

sense maker

On the other side of the balance sheet, the biggest liability in Mulpha is its chairman, Mr Lee. Intangible liability if you will.

2014-09-12 00:09

calvintaneng

I think you have been opinionated about Mr. Lee. He just took over leadership position. He stated clearly that he thinks Mulpha value should rise higher to meet its NTA level. And he puts his money where his mouth speaks - buying 40 million mulpha shares at 46 cents.

As to your generalization in kyy blog that Mulpha & PM Corp directors took Million RM as fees is an overstatement as far as PM Corp is concerned. The 6 directors get a yearly fee of RM150K to RM180K. About RM2,500 per Director monthly. It is really a pittance when some are former MP, Dental Doctor, Multi Millionare & People of High Qualifications. That's why some resigned over the years when shareholders were unhappy. I have seen it all.

And to your reservation about PPG is also bias. However, I do think you make sense in many areas. But my experience about you is rather erratic. Just like the stock Kumpulan Fima (Kfima) which I bought years ago at 35 cents. It behaved erratic like you but became very stable now. I hope you will turn out like KFima someday.

2014-09-12 00:31

sense maker

Mulpha is a classic example of value trap.

I know the history of Mulpha quite well including Mr Lee (having taken the helm at so young an age, skipped AGM, no urgency or skill to turn around so-called world renowned assets), his father (politically connected back then, venturing big into OZ, having a big credit company listed in HK, his mother having bulk of the shares) and details of all their assets including those in OZ.

The Lee family is too rich to care about minority shareholders. Many years ago, Mr Lee said he would continue to buy shares using company money as long as market price is below NTA. But there you go, the share price continues to languish. There is nothing new from him.

I am just giving you a word of caution. Countless small players have been buying Mulpha knowing limited downside but the upside continues to elude them and they ended up cutting it off at big losses.

In many projects, their issue is their high pricing and the too high end of their products. Mr Lee has changed many senior officers to help him run everything while he jets around enjoying life.

The share price performance tells it all and the recent issuance of debt securities at 8% is again proof that Mr lee keeps rolling over debt while sitting on a pile of seriously underperforming assets.

2014-09-12 01:00

calvintaneng

I am happy to answer on behalf of Mulpha shareholders and Mr. Lee

1) You said "Mr. Lee has no urgency or skill to turn around so called world renowned assets."

Not true. Recently, Mr. Lee took the trouble to protest against blocking an office Tower's View of the Sydney Opera House in Australia. When his plea fell on deaf ears he took the trouble to go to Court & Sue the Singapore developer.

2) Is Mulpha is a Classic Example of Value Trap?

Others have said that PM Corp was a Value Trap & KKP doesn't care for minority shareholders. The fact is PM Corp has gone up 100% in price. MUI Prop also 100%

3) Mr. Lee DID Use Company Monies to Buy Mulpha Shares from 38 cents to 42 cents as He Promised. And Then He Used His Own Personal Monies To Buy 40 Million Mulpha Shares at 46 Cents. Others would have used company money to push up share price and then they will unload at higher prices.

Instead he bought at prices 10% to 15% more higher than Co share buy back. Don't you see this is a noble act? Did your sense of sight betray you from seeing.

4) Mr. Lee jets around enjoying life? Then why bother to visit Leisure Farm? Why Mr. Lee bother to shake hands with UEM Sunrise people in a JV to upgrade roads & interchanges? Why plan to launch Semi Dees for Sale? Why tender out Bungalow lots by selecting one from each precinct? Why be so painstaking and careful in detail?

Actions speak louder than words. Do you hear me? Or your sense of hearing fail you?

Why Built And Add Value To LEISURE FARM LANDS? Just sell bungalow plots and shake legs, go jetting about.

Which make more sense. Mr. Lee using Company money to buy back shares? Mr. Lee even using RM40 Millions OWN PERSONAL MONEY To Buy Mulpha Shares at higher price. Mr. Lee complaining to land zoning authority of Sydney. Mr. Lee Suing Company from Singapore from Blocking View. Mr. Lee planning Upgrades of Roads & Interchanges with UEMS. Mr. Lee choosing out 10 Bungalow plots for sale by tender. Mr. Lee planning Sales of SEMI Dees at RM3.4 Millions each!

Which make more sense to us shareholders?

Mr. Lee's action which our eyes can see and ears can hear. All our five senses can make it real before our eyes

Mr. Sense Maker?

2014-09-12 02:34

ezytrader

Whatever kok and bull you said about this lee guy is immaterial as the historical price of the company tell you that the management is one heck of a lousy set. For the last 5 years it have being at the 40+ range. And for the last 5 qtrs there is no dividend given. A company don't give dividend and the price is not moving for 5 years, only a stupid investor will jump into such company.

2014-09-12 06:30

JT Yeo

NTA is just a guideline when valuing how much a company is worth and what are you paying for. And it is more applicable to asset heavy industries compare to services industries. One also need to take into account the environment of the industry and the business itself, if the industry is extremely competitive, there is a high chance that it can become a value trap, aka business value deteriorate fast enough to evaporate your margin of safety before you can 'unlock' the value.

NTA is just one factor to consider similar to PE, you still have to consider many other variables when you invest in a business.

2014-09-12 07:50