Posted by kcchongnz > Jun 16, 2013 07:58 AM

Is P&O a good comapny? Is it a good investment? 

Posted by Darren Kho > Jun 15, 2013 02:33 PM | Report Abuse 
kcchongnz, 
Please have a look at P&O, is it a good company and worth for long term investment? Appreciate your comment so much and thank you for that :) 

Sorry Darren, I don't know how much about insurance business. But that won't stop me from giving an opinion too, will it? 

Warren Buffet acquired a good insurance company in Geico. It gives him a lot of money paid upfront to invest and earns great return for Berkshire Hart away. So I guess insurance business is a durable one. But once and while insurance company get hit badly too when there is a natural disaster. 

P&O makes good ROE and ROIC too and so this is a plus as a good company. However, I don't expect much growth. don't know why cash flows is not good. So this is a minus. 

So overall i guess P&O is ok lah as a company. Lets look at whether it is a good investment. 

Screens for investing
ROTC ok 17% >WACC 
P/B Yes 1.5 <2.0 
PE ratio Yes 10.0 <20 

apparently P&O meets my requirement as an investment as shown above.