ipomember

how do you calculate P/E? Just a gentle reminder, when doing financial analysis, its better and advisable to look beyond the figure. Take whatever figure from the report and work out the maths is not pratical.

2014-05-30 14:16

Intelligent Investor

Hi ipomember, thanks for your comment.

As per what I stated in my post, this is not the final list yet as a thorough analysis need to be carried out to further examine the companies in the list.

2014-05-30 14:19

NOBY

II, I really doubt that the top 3 companies in your list P/E are that low. You need to check back on the corporate exercises done for these companies. Bonus issue or share splits will increase the outstanding number of shares and you need to calculate the P/E based on the adjusted price before bonus if you want to use previous year EPS as guideline. Personally I have done a thorough analysis on Willow before and the P/E is not that low.

2014-05-30 14:24

johnny cash

Intelligent Investor--- thanks for the above article

2014-05-30 14:27

Intelligent Investor

Hi noby. Yes, this is just a raw number. Don't worry, I won't click my "buy" button before I perform more detail study.

I cross check with i3 - http://klse.i3investor.com/servlets/stk/fin/7231.jsp
and it show that wellcall p/e is 8.21 - still a good number.

2014-05-30 14:29

splaw

@ II, how do you work out the leverage numbers? Is it using the D/E ratio?

2014-05-30 14:33

Intelligent Investor

it is Total Assets / Equity, you can refer to the DuPont analysis posting - http://intelligentinvestor8.blogspot.com/2014/05/dupont-analysis-dissecting-roe.html

2014-05-30 14:39

sosfinance

Just a quick check on Wellcall and Presbhd, the PE is more than 10x. Both have done the bonus issue (i believe).

2014-05-30 15:37

speakup

low PE doesnt mean good. just look at China based companies. all very low PE

2014-05-30 15:47

fookchng

I would suggest to value the companies in the list using Return on Capital Employed (ROCE). ROCE indicates or measures a company's profitability and the efficiency with which its capital is employed. Above 10% consistently for a good business. Above 15% indicates a strong business.

2014-05-30 15:52

Intelligent Investor

hi speakup,

Yes. I would agree that low P/E doesnt mean good.

If you read my post, you will aware that the above companies was selected based on high ROE which achieve by High Profit Margin \ Turn Over and low financial leverage. Do look at company quality first prior to look at P/E.

P/E is not able to provide a whole story.

Do always take note on this.

2014-05-30 16:01

Intelligent Investor

Hi fookchng,

The main difference between ROE and ROCE is ROCE minus out the current liabilities on the denominator.

ROCE will provide a significant difference if a company have huge current liabilities.

And owing to this, I think ROE will sutie my taste better than ROCE. Isn't the current liabilities contribute to the company asset? We need to measure how the management generate value based on all granted asset.

By the way, I try to look for companies with low financial leverage. The companies listed here is a subset from the company list with high ROE and low financial leverage which posted earlier - http://klse.i3investor.com/blogs/intelligent_investor_notes/53177.jsp

2014-05-30 16:05

stockoperator

Have we learned anything on Red chips company? Any companies in the market can be disguised as Red chips company Or under Pyramid Scheme Or even money laundry without knowing the Business and proper study and Investigation. So many new Version of it day by day.

2014-05-30 16:37

stockoperator

If I detect One they will come out with New Version. If I detect second One, they will come out with New Business Model.

2014-05-30 16:42

Foresight123

One question, where do you get/ source your PE Ratio from?
How do you count it?

2014-05-30 21:37

Intelligent Investor

P/E = Price / EPS

2014-05-30 22:22

Foresight123

I know what is PE. DO YOU?
I highly doubt the relevance of your calculations on "PE's"
Hartalega PE 2.93??? Assuming the average PE ratio for stocks is 12,
Then Hartalega "SHOULD BE" Priced at RM 24 (Rm6x4)(-approx) according to your "true value" of the stock??? Lol?
I think you got your calculations for PE for most of the stocks above wrong.
Therefore, they aren't really "cheap" if you were to base it on PE
http://www.bloomberg.com/quote/HART:MK
http://www.bloomberg.com/quote/WELL:MK

2014-05-30 22:40

Rav

Yup your P/E is wrong

2014-05-30 22:48

Intelligent Investor

Hi Foresight123 , thanks for highlighthing.

Yes. I aware of that. NOBY did highlight to me on his earlier comment. Some of the companies might change NOSH due to corporate exercise and it is not tally with the NOSH on Financial Year End.

I will take note on this and will collect the latest data from quarter report when perform thorough analysis.

2014-05-30 23:00

Heng611

Low PE=Cheap is just like you rent a shop RM1k per month (xyz) vs a shop RM10k per month (KLCC or time sq), same management for two shop, which shop can make money

2014-05-31 11:46

wanderabara

Post removed.Why?

2014-05-31 15:39

icon8888

The PE calculations don't look correct.

2014-05-31 18:23

Rambotan

Kekekeke....talk 3 talk 4 again

2014-05-31 18:24

markkim

please let me know how you calculate the P/E ?

2014-05-31 18:31

rlch

Can you give P/E data base on latest quarterly result which ended yesterday?
Like so many people comment here, I doubt your figure is true.

2014-05-31 19:06

johnny cash

http://www.bursamarketplace.com/index.php?ch=ch_themarket&pg=pg_tm_screener

what are your comments on this screener??? is anything lacking here, example ROE and others? please give your oppinion on what is lacking

2014-05-31 19:10

NOBY

Johnny klse screener v2 can scan for ROE. Just google it

2014-05-31 20:24

yfchong

That is a good tools to check on roe n pe

2014-05-31 20:39

Intelligent Investor

Hi Heng611,

Please don't get me wrong. I am saying to buy a good companies in a relative cheap price. But not a ordinary company.

And, I think your analogy is not right. Maybe you can think that to buy a shop in klcc with good business in a relative cheap price. This should be what a value investor target for.

2014-05-31 21:06

Intelligent Investor

Yes. It is not based on latest quarter but it is based on FY end. I will only go in to more detail later.

Please take note that "This is not the final list yet as a thorough analysis need to be carried out to further examine the companies in the list."

2014-05-31 21:07

Intelligent Investor

Hi Heng611,

To make my idea more precise, the main purpose is "Buy companies with strong histories of profitability and with a dominant business franchise in a relative cheap price (at a discount to intrinsic value). "

2014-05-31 21:10

stockoperator

Those companies might be in your groceries basket that is why they are there every month.

2014-06-01 01:54

stockoperator

But i don't think you will do that.

You start out with the mentality of Not learning the Business but to Buy everything that is cheap and appears strong in numbers; so you will end up Buying everything that is cheap and convincing yourself that is the good Business.

2014-06-01 02:04

stockoperator

Well, what can we do? Good Business is hard to find. So we have no alternative and to keep screening and screening. Is that so?

2014-06-01 02:06

stockoperator

Cheap is the first thing in your mind. Second is sell quickly at intrinsic value. Third Only is Good Business. That means you are comprising and your priority is different.

2014-06-01 02:09

stockoperator

That is why you keep screening at the first place, right?

2014-06-01 02:10

stockoperator

But where to find the God damned Good Business? So we have no alternative But have to do it the other way around. No choice. How can it be wrong if the company is having strong number right??

2014-06-01 02:14

stockoperator

Unconsciousness will produce Unnecessary Attachment.

High consciousness reigns supreme.

2014-06-01 02:17

stockoperator

IF i put it this way How can Red Chips company be wrong if the number is so strong?

2014-06-01 04:38