Stock Pick Challenge 2013 2H
So what is wrong with the pick on Kumpulan Fima which lost 2.4% since a year ago? - kcchongnz
kcchongnz has left a new comment on your portfolio "Stock Pick Challenge 2013 2H - kcchongnz":
So what is wrong with the pick on Kumpulan Fima which lost 2.4% since a year ago? Well there were two or three people in i3 who constantly picked on me for choosing this stock. However they were not able to articulate on why my Kfima pick was such a bad move, except talking nonsense, all of them.
Looking back on the selection process again, I do not see what is wrong. It was selected based on its diversified durable business in security paper printing, palm oil, bulking, food etc. It had high ROIC of 25%, a healthy balance sheet with 255m net cash, or about RM1 per share, excellent quality of earnings with consistent and abundant cash flows from operations and free cash flow. Free cash flow is more than 20% of revenue and invested capital. And most of all, at RM2.06 at that time, the earnings yield (EV/Ebit) was 27%, a great number.
Sure its earnings has dropped by about 10% the last financial year, though its revenue still went up a little. Again which company with plantation as a major earnings didn’t have their earnings reduced last year when palm oil price is depressed? Many even made losses.
Based on Kfima’s last annual financial results, ROIC has dropped to 19%, but this is still a high return of capital. And at RM1.93 now, its earning yields (EV/Ebit) of 26% is still hell of a good bargain. This is a classic case of the Magic Formula Investing Strategy of Joel Greenblatt.
Buying something for less than its value is the most dependable way to make money. Buying discount from IV and having asset price move towards its value doesn’t require serendipity; it just requires that market participants wake up to reality.
Trying to buy below value isn’t infallible, but it’s the best chance we have.
The fact that despite its great fundamentals haven’t changed but its price has gone down a little while the overall market has gone up by 14%, it is even more compelling to keep Kumpulan Fima as a major stock in my portfolio in 2014.
Posted by kcchongnz at Jan 2, 2014 01:04 PM
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
Market Buzz
More articles on Stock Pick Challenge 2013 2H
Hexza and Graham net-net and high dividend yield investing strategy - kcchongnz
Created by Tan KW | Nov 08, 2013
Graham Net-Net Investment Strategy and some property companies - kcchongnz
Created by Tan KW | Sep 06, 2013
Discussions
1 person likes this. Showing 26 of 29 comments
agreed with kcchongnz. with a net cash flow of RM1. Kfirma have a greatest chance to get the most bargain invest even during the bad times. Patience is just a part of value investment rules. Think alternatively, If you buy at more lower price, you should be more happy. cause u have bought more cheaper than previously. then u have a greatest chance more huge gain.
2014-01-02 16:01
KFima 2014 1H NTA 2.19, DE 0.01, FCF/share 0.03 because of PPE 31.7m, EPS 11.38 sen.
2014-01-02 16:51
are they paying dividend? I have been following KFIMA for the last 6 months and good write up on greedydragon blog and now here from KC. But if the stock doesnt move and doesnt pay dividend, isnt it holding up your cash? This may be a stock perhaps i may buy using my EPF share account and keep i there for my kids college perhaps but if you are trading on cash that needs to grow at 10% per annum, why would u stay on this counter unless momentum builds up?
2014-01-03 09:14
Thanks Tan, didnt realize i could check on i3 :). This is good. Btw is 8% divident based on total share price at Ex-date ? How is it calculated, assuming i have 10 lots at MYR 1.95, so my total investment is MYR19500. How much divident will i get? 8% of MYR19500?
2014-01-03 10:01
Bahsir Family, the major shareholder keeps buying the stock from open market at 1.95-1.96. They know something that we do not know?
2014-01-03 10:01
"Businesses are never short term. It definitely has its ups and downs. The problem with many investors is that with his / her investment, they expect return next month. Then they move to a new stock. But to find a good company or business that you are confident with is very difficult. The keyword here is "you are confident with" which means a lot of time are to be spent on studying the company, knowing the business to some extent, be faithful and be patient." Very good one from FELICITY.
My friend, do you understand enough KFIMA before you invest?
2014-01-03 10:08
Will Kfima trading at 1.96 now when everyone knows that CPO price is trading around 2,650 which is much higher than 2,400, 3 months ago. KM Loong's latest result has shed some light on how the plantation company will perfom when they announce they quarterly result in Feb 2014.
Is Kfima a cheap buy at RM1.96 a value buy? you decide.
2014-01-03 10:18
Tan - Thank you for the info,so on MYR2 market price that's like 4%, seems okay. Gokula.
ps - i have been silently reading i3 for the last 6 months, you and KC has been amazing in sharing.
2014-01-03 10:59
Still put my bet that Kfima will reach 2.40 by 10 Feb 2014. Anyone dare to challenge me?
2014-01-03 22:24
Sound so confident :)....I rather believe palm oil related theme play taking place soon...
2014-01-03 22:57
tuniamasingh, what make you confident it will reach soon? by your Technical analysis or fundamental's confidence? Just curious not interest to challenge...
2014-01-03 23:02
Let us learn how the management is running and growing the company and look for business opportunity with such a cash pile. Let us grow together with the company while enjoying healthy dividend.
2014-01-06 00:00
ps - i have been silently reading i3 for the last 6 months
so who said that?
Thanks Tan, didnt realize i could check on i3 :)
and who said that???
haha stupid liar being here for six months
2014-02-06 21:37
After two months from the date of this article, Kfima's share price rose by 16.3% to RM2.28 now from 1.96, while the KLSE dropped by 1.1% during the same period.
Kfima at RM2.28 now is still way below its intrinsic value, in my truthful opinion.
2014-03-17 12:09
kcchongnz, after reading your post, I trust you in your stock picking ability. I am going to buy Kfima first thing tomorrow :)
2014-09-15 21:40
Lousy compare to fimacorp
Kfima is like the ugly step sister hahaha
Plus CPO PRICE DROPPING Oh !!
2014-09-15 22:04
Posted by kk123 > Sep 15, 2014 10:04 PM | Report Abuse
Lousy compare to fimacorp
Kfima is like the ugly step sister hahaha
Plus CPO PRICE DROPPING Oh !!
You are quite right, or rather partially quite right here.
But like what your other opinions and comments, whether using this same id or not, lack the depth in thought process.
In term of share price performance, Fima Corp definitely out-performed Kfima. That was because of its corporate exercise which seems to have "unlocked" the value of its business. You are right here.
But Fima Corp is a subsidiary company of Kfima (>60%). So don't you think if Fima's business is good, that of Kfima is good too? And that is precisely the reason why I think there should be more upside potential and catching up for Kfima, share price wise.
Investing should be a long term endeavor, not a day-to-day, month-to-month, or even year-to-year basis. CPO is a cyclic commodity. The value of a palm oil plantation does not fluctuate week-to-week because the change of palm oil prices.
Btw, do you know what make up the business of Kfima? How much palm oil contribute to its top and bottom line? How has the fluctuation of palm oil prices the last few years affecting its top and bottom line?
2014-09-16 06:43
As long as its CPO related , it's enough reason to dump kfima
The holding company is usually traded at discount , I think even novice investor knows that'
Do u know what fimacorp does compare with kfima ? Better read it up Kcchong
2014-09-16 21:48
Post a Comment
Featured Posts
Open a Moomoo Account Today and Win an Apple iPad Air*!
MQ Trading Signals
Time
Signal
Duration
Type
2024-05-03 16:40:00
EMA 5
5 Mins
BUY
2024-05-03 16:05:00
EMA 5
5 Mins
SELL
2024-05-03 16:05:00
MACD/RSI
5 Mins
SELL
2024-05-03 16:00:00
EMA 5
10 Mins
SELL
2024-05-03 16:00:00
MACD/RSI
10 Mins
SELL
Apps
Top Articles
1
Nuclearinvestment
2
AmInvest Research Reports
STRATEGY - Local Institutional Support Drive Upward Momentum
3
Good Articles to Share
4
5
THE INVESTMENT APPROACH OF CALVIN TAN
6
KLSE Traders Update and Ideas
7
M+ Online Research Articles
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
fandi
If have patience sure can make a lot of money from this stock.
2014-01-02 14:10