SOS Read this before you INVEST in Stocks

SOS Are you adequately protected? Stocks you must have!

sosfinance
Publish date: Thu, 14 May 2015, 12:49 PM
VALUATION DOES NOT DETERMINE THE PRICE, IT'S JUST A TOOL TO ESTIMATE A VALUE OF A BIZ

www.sosfinancialplanning.blogspot.my

"How do you save RM50,000? - I shared with a friend on how to do it. I got a term life for RM280 p.a covering RM100k until 70 years old. I cancelled my wholelife insurance of RM2,800 p.a. for the same coverage up to 100 years old. Save RM2500 p.a x 20 years = RM50,000. (PM0122037325)

.....IS THIS ARTICLE FAKE OR FACT?? ANYONE CAN CONFIRM?

INSURANCE COMPANIES

LPI, TAKAFUL, TUNE INSURANCE .....and many more

 

WHY WE NEED TO HAVE THESE STOCKS

Based on the above, LPI, TAKAFUL and TUNE Ins

ROE 18-20%

NP Margin 18-20%

ROE 14 - 20%

LPI and TAKAFUL has >10 years listed track record and their Earnings CAGR = 12.86% to 20% (for 10 years track record)

TUNE Ins - only 3 years track record

 

WHICH ONE IS THE BEST

All of the three has PE of about 18-21X.

Each of them has different dividend yield records and capital appreciation.  LPI appears to have the lower risk due to consistent dividend yield, while Tune does not pay any dividend.

 

LIMITED REVIEW

I have only done a very limited review (not even research), hence, do your own detail evaluation.  Insurance, if done well, is a great biz, with great ROE, NP Margin, and also Double Digits growth and it appears to be recession prove, it is good to have one or two of them in your pocket.

Oh, most importantly, their average CAGR gain (Capital & dividend) based on the share price and dividend paid, is about 12-16%.  

 

MY VIEW

These are one of the few that you must KEEP say, 10-20 years.  Of course, do reveiw regularly, to see if the CAGR gain is still above 10%.  If it has greatly exceeded that, i.e. CAGR (price+div) > CAGR net profit over last 10 years, then time to let go.

 

OTHERS INSURERS

MAA has a negative compounding profit of 9.5% for last 10 years and revenue dropped from RM2.8b to RM0.7b.  Meanwhile, Manulife is flat for the last 10 years.  So, avoid these two insurers.

 

For financial planning knowledge, go to www.sosfinancialplanning.blogspot.com

 

 

 

Discussions
Be the first to like this. Showing 5 of 5 comments

davidkkw79

Run ! Market will crash soon

2015-05-14 13:23

Christensen

Klse 1800
How is it gonna help

2015-05-14 13:27

sosfinance

The insurance industry (at least 2 companies) (based on 10 years track records of LPI & Takaful) is recession proof. If, the market crash, (and the price of these stocks also dropped significantly e.g. >20%), please add more.
Don't time the market (for traders only),
spend more time to review listed companies that provides good capital appreciation and DY for long term. As far as I understand, insurance companies revise their premium regularly to reflect real inflation, not Malaysia CPI inflation.
These stocks are not for traders, for LT Investors, 5-10 years minimum and expecting double digits compounding return.
Not promoting, sharing ideas.

2015-05-14 14:36

speakup

Bull run..... kasi hantam je. Easy money!

2015-05-14 14:41

moven00

SOS, good idea. Thanks for the opinion and sharing.
Thumps up for you.

2015-05-14 16:00

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