Posted by kcchongnz > May 28, 2013 08:03 PM | Report Abuse X

Is FAVCO a great company? Is it a good investment? 

FAVCO, a crane fabricator has a good business spread all over the world. Its earnings has been growing at a fantastic CAGR of 36% over the last 6 years. ROIC is high at 17%. Yes, it is definitely a great company. But is it a good investment at the present price of RM2.64 after going up 30 sen today? I think so. Below is my assessment. 

FAVCO Good company? 

Good governance ?
Durable business Yes
Growth Yes 36% Net profit 6 yr CAGR
ROIC Yes 17% >WACC
Balance sheet Yes 0.23 <1.0 D/E ratio 

Screens for investing RM2.64 28/05/2013
ROIC Yes
P/B Yes 1.6 <2.0
PE ratio Yes 9.1 <20