Sri Lanka
Majority Sinhalese Buddhist
Significant minority Tamil Hindu
Government has mismanaged the economy over many years.
Political uncertainties, pandemic and its consequences (tourist trades, etc) and the recent Ukraine crisis and its consequences (high fuel prices, high food prices, high inflation, etc) added together create the perfect economic storm and crisis.

The government will probably collapsed to be replaced by another, but the ecconomic rebuilding is going to be difficult and prolong. As usual, the population of Sri Lanka will suffer.

KUALA LUMPUR (April 26): Nestlé (Malaysia) Bhd’s net profit for the first quarter ended March 31, 2022 (1QFY22) grew 17.14% to RM205.18 million from RM175.16 million a year earlier underpinned by stronger sales, coupled with lower Covid-19 related expenses.

The improved results were achieved despite the impact of increased commodity prices, as well as the impact of Cukai Makmur (the prosperity tax), said Nestlé in a bourse filing on Tuesday (April 26).

Earnings per share rose to 87.5 sen, compared with 74.7 sen previously.

Owners of oil palm estates are enjoying bumper incomes. They are all very happy and this present price of palm oil is the highest ever in their lifetime so far.

How much more will you pay for this business at this favourable period?


-----


And so, it is time to revisit what Ben Graham wrote in The Intelligent Investor –

…the risk of paying too high a price for good-quality stocks — while a real one — is not the chief hazard confronting the average buyer of securities. Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.

The purchasers view the current good earnings as equivalent to “earning power” and assume that prosperity is synonymous with safety.

Buying high quality businesses at expensive prices carries a risk of poor returns, but buying low quality businesses even at cheap prices carries a risk of permanent capital destruction. And there is a big difference between the two.

Best and only way to value any company properly: The value of the business is the discounted value of all its future cash flows.

Sell first, think later!

Management has been proactive during the last 2 years. Closing down loss making outlets and re-branding.

Price has climbed since I last visited this stock.

Revenues had shrunk the last 5 years, even before the pandemic. Reporting losses last 2 years, huge loss last year.

About 15 m in total debt with about 5 m cash, net cash negative.

Inventories remain disproportionately high relative to its recent drops in revenues.

Stopped paying dividends the last 2 years.

Present price is higher than its book price.

Rising cost of living is the biggest challenge for average Malaysians. The average Malaysian is struggling. Though measures are introduced to control inflation, the costs have not fallen.

Salaries are too low and have consistently failed to keep pace with inflation; there is a downtrend in the national saving rates and rising household debt levels in Malaysia. Malaysians are saving less and borrowing more to maintain their lifestyles. The workers salaries have been too low for too long.

The other truth is many businesses simply cannot afford to pay more, as they are not getting sufficient returns on their total capital employed, which have been falling for some years now.

MSWG should have responded likewise sooner!

Recognising risks in our investing.

The price has risen due to expanded PE and recent good EPS.

Revenues have been flattish and earnings have increased due to better profit margins. The rise in gold price means selling old inventories at higher prices giving better profit margins.

New inventories will have higher costs and if the selling price cannot be increased further, this will lead to profit margin contraction.

Today, investing in Poh Kong carries a lower reward at higher risk when compared to before July 2020.

I maybe absolutely wrong, therefore always do your own analysis and make your own decision.

>>>>

Karma4444

Pohkong will uo 2.00 soon

>>>>>>

Very unlikely.

Historical price

July 2020 0.48
7.8.2020 1.55 (highest price)
14.8.2020 0.93
30.10.2020 0.75

Price rose from July 2020 due to PE expansion.

Insiders sold in Aug 2020.

POH KONG
All values MYR Thousands.
2021
2020
2019
2018
2017

Sales/Revenue
903,000
749,000
1,001,000
1,004,000
877,000

Net Income before Extraordinaries
52,817.4
38,976.1
36,450.5
26,885.2
37,485.8

Net Operating Cash Flow
23,350.4
78,315.7
27,599.1
(7,789.7)
73,527.4

Capital Expenditures
(1,412.2)
(3,942.2)
(6,126.3)
(4,717.5)
(6,958.0)

Cash Dividends Paid - Total
(4,924.2)
(4,924.2)
(4,103.5)
(4,103.5)
(4,103.5)

Free Cash Flow
21,938.2
74,373.4
21,472.8
(12,507.2)
66,569.5

We can learn a great deal about the quality of the businesses through comparative analysis using 2 companies.

Nestle
All values MYR Thousands.
2021
2020
2019
2018
2017

Sales/Revenue
5,734,000
5,412,000
5,518,000
5,519,000
5,260,000

Net Income before Extraordinaries
751,817.0
724,769.0
875,725.0
875,890.0
812,216.0

Net Operating Cash Flow
852,877.0
877,811.0
689,747.0
1,004,093.0
699,831.0

Capital Expenditures
(274,758.0)
(294,553.0)
(183,253.0)
(151,645.0)
(164,455.0)

Cash Dividends Paid - Total
(544,040.0)
(656,600.0)
(656,600.0)
(644,875.0)
(633,150.0)

Free Cash Flow
578,119.0
583,258.0
506,494.0
858,422.0
535,376.0


POH KONG
All values MYR Thousands.
2021
2020
2019
2018
2017

Sales/Revenue
903,000
749,000
1,001,000
1,004,000
877,000

Net Income before Extraordinaries
52,817.4
38,976.1
36,450.5
26,885.2
37,485.8

Net Operating Cash Flow
23,350.4
78,315.7
27,599.1
(7,789.7)
73,527.4

Capital Expenditures
(1,412.2)
(3,942.2)
(6,126.3)
(4,717.5)
(6,958.0)

Cash Dividends Paid - Total
(4,924.2)
(4,924.2)
(4,103.5)
(4,103.5)
(4,103.5)

Free Cash Flow
21,938.2
74,373.4
21,472.8
(12,507.2)
66,569.5

The truth is still required to be released, lest we never learn from the past.

This Serba Dinamik episode does not instill great confidence in the good regulation of our stock market.

IN 2020, I received a number of whatsapp messages from young investors on their gains in glove stocks. I suspect that all these investors are nursing losses in these stocks today.

Too many sheninagans in the last few years. The biggest let down was Transmile CEO making a disappearing act when the court judgement was announced. OMG, it took a decade or more to bring this case to conclusion.

Unless Bursa Malaysia and the government of the day protects the integrity of the local Malaysian market, I am afraid, there are only a few stocks for long term investors in the Bursa.

KEY STOCK DATA
Price 91.5 sen
P/E Ratio (TTM)
8.24(04/11/22)
EPS (TTM)
RM0.11
Market Cap
RM357.01 M
Shares Outstanding
N/A
Public Float
135.86 M
Yield
1.31%(04/11/22)

2021 - 2017 5-year trend


Sales/Revenue MYR Millions.
2021 903
2020 749
2019 1,001
2018 1,004
2017 877


Pretax Income MYR Millions.
2021 52
2020 38
2019 36
2018 27
2017 37

Net Operating Cash Flow MYR Thousands.
2021 23,350.4
2020 78,315.7
2019 27,599.1
2018 (7,789.7)
2017 73,527.4


Cash Dividends Paid - Total MYR Thousands.
2021 (4,924.2)
2020 (4,924.2)
2019 (4,103.5)
2018 (4,103.5)
2017 (4,103.5)

Capital Expenditures MYR Thousands.
2021 (1,412.2)
2020 (3,942.2)
2019 (6,126.3)
2018 (4,717.5)
2017 (6,958.0)

Free Cash Flow MYR Thousands.
2021 21,938.2
2020 74,373.4
2019 21,472.8
2018 (12,507.2)
2017 66,569.5

Inventories MYR Thousands.
2021 594,777.6
2020 548,913.8
2019 573,626.0
2018 558,793.6
2017 540,127.9

Total Shareholders' Equity MYR Thousands.
2021 602,174.5
2020 570,225.2
2019 550,715.7
2018 523,343.0
2017 504,045.1


Total Assets MYR Thousands.
2021 808,325.4
2020 793,579.7
2019 786,669.6
2018 802,789.5
2017 758,270.3


Cash & Short Term Investments MYR Thousands.
2021 19,673.5
2020 34,432.8
2019 29,255.7
2018 54,292.6
2017 49,581.2

ST Debt & Current Portion LT Debt MYR Thousands.
2021 110,853.9
2020 121,459.3
2019 144,388.5
2018 196,411.8
2017 126,189.7

Long-Term Debt MYR Thousands.
2021 46,124.2
2020 54,021.4
2019 42,332.5
2018 24,233.3
2017 62,749.5

Through this corporate exercise, Dato Tan Kok has essentially taken the poultry and egg business private. The new business injected into LTKM (which will be renamed) will be controlled by a new majority shareholder, completing the reverse take over of LTKM by the new shareholders.

>>>Posted by ahbah > 17 hours ago | Report Abuse

Any stock priced at PE 5 is veri chip !!!!

>>>>>

:-)

PE of 5 was very cheap and it was a profitable company. Those who only look at PE only may commit this sin. Warren Buffett hardly talked about PE in his valuation.

Anyway, to share here. Poh Kong was trading with a PE of 4 or 5 in the past, and it was a profitable company giving out dividends. Why was it trading at such a low PE for so many years? Was it undervalued or a value trap? How can you decide between these 2 options?

Clue: study the earnings of this company. Dissect the E of the PE ratio of Poh Kong in greater depth.

The earning of Poh Kong was at a certain level and the price in the market translated to a PE of 4 or 5. However, if you were to revert your thinking process and analysed the earning in greater detail, you will soon discovered during that time that the earning was not high quality earning. That is, the earning did not translate into a lot of cash from operations and free cash flow. The market was actually pricing Poh Kong using its free cash flow, giving it a FCF yield of 4% or 5%, and at that price, the market cap/earning or PE = 4 or 5.

The market is very efficient in many ways most of the time. The PE of 4 or 5 for Poh Kong for many years was explainable and understandable for those who were willing to dissect the financial data further. Invert, invert,.... so said Charlie Munger. :-)

Underweight cyclicals, overweight defensives.

Tongher is well managed and profitable. It delivers dividends regularly and due to its low share prices (most of the time), the dividend yields are quite high (6% - 8%).

It is a cyclical stock. Those who bought this stock when its price was at a cyclical low should enjoy very good reward. This coincides with period when the EPS is low, the PE is obviously high and DY is high, compared to its historical trends. Those who bought when the price was at its cyclical high would have great difficulty recovering their losses or will take a long term to break even, even with the regular dividends received.

KEY STOCK DATA
P/E Ratio (TTM)
24.58(04/07/22)
EPS (TTM)
RM0.08
Market Cap
RM442.93 M
Shares Outstanding
217.70 M
Public Float
172.11 M
Yield
9288 is not currently paying a regular dividend.
Latest Dividend
RM0.0199999996(10/28/21)
Ex-Dividend Date
10/12/21

All values MYR Thousands.
Free Cash Flow
2021 74,285.0
2020 42,710.0
2019 56,376.0
2018 32,990.0
2017 40,017.0

Free Cash Flow Yield 37.87%


Despite the pandemic, this company remain profitable during the period. Its revenues and profits have contracted, like the other retailers. Similarly its share price accordingly. It was a low of 50 sen per share at one stage.

Nevertheless, the management has been actively improving the fundamentals of this company during this trying period. They have closed down the non-profitable outlets, and this measure can only benefit its business. Also it has re-listed CRG in the leap counter, which has appreciated significantly since its IPO.

The company generates good cash flow from its operations and spend minimally on capex. I like its strong FCF. No further comments other than I own this stock.

Price RM 23.54
PE 28.95
DY 3.45%

Be patient. You may like to look at this counter when its PE is 25 and its DY nearer 4%.

For a very long time, Poh Kong was trading at a PE of 5.

Over the recent years, this PE has expanded to around 8. For a company with a consistent ROE of 5% or less, PE of 8 may not be a bargain afterall.

"The company, or rather, TTB using company's money, to appeal against the High Court's decision that in law and the company's own constitution, COL is not a shareholder. It has yet to explain why is it against the shareholders' interest to have foreign funds, not COL, as shareholders? It is going to be an expensive and futile attempt to argue the point that COL is a shareholder, as defined by the four corners of the relevant documents."


Has anyone asked ttb what outcome(s) he is hoping from this court case? Is it really so necessary to pursue this matter so aggressively? I cannot fathom the need for this at this moment in time!

P/E Ratio (TTM)
16.20(04/07/22)
EPS (TTM)
RM0.05
Market Cap
RM129.40 M
Shares Outstanding
N/A
Public Float
155.91 M


Revenues and profits have been up and down during the last 5 years. Given this lack-lustre consistent growth, it is not a company that for holding for the long term.

The share price has traded over a range and this might be of interest for short term players.

KEY STOCK DATA
P/E Ratio (TTM)
16.13(04/07/22)
EPS (TTM)
RM1.05
Market Cap
RM24.47 B
Shares Outstanding
N/A
Public Float
431.48 M
Yield
2.06%(04/07/22)
Latest Dividend
RM0.25(06/01/22)
Ex-Dividend Date
05/13/22



All values MYR Thousands. 5-year trend
Cash Dividends Paid - Total
2021 (682,847.0)
2020 (467,170.0)
2019 (424,254.0)
2018 (394,013.0)
2017 (327,248.0)


PPB has a very strong balance sheet. Most of its profits is from its investment in Wilmar. It has paid increasing dividends over the last 5 years.

Its P/B ratio is just below 1 and it is trading at a fair price today.

Sadly, the court processes been (ab)used to prevent release of material information.

Net cash positive. Huge equity relative to total liabilities. Minimal debts. Profitable. Well placed to ride up the recovery of its business in its sector.
Share price has already risen over the recent months.

Keep It Simple and Safe

Q Quality
Unique product or services, DCA (Moat)
Growing revenues and earnings consistently.
Quality earnings generating lots of CFO.
Little need for Capex and thus growing FCF.

M Management
Management with integrity
Maintaining good profit margins or growing profit margins
High ROE and high ROIC
Allocate company capital efficiently, benefiting the shaaaaaaareholders


V Value
Margin of safety
Upside reward 3x greater than Downside loss.
Given price gives a potential 100% gains over the next 5 years (i.e. 15% per year averagely)
FCF/Market cap of 6% or more (cash cow). This is also the FCF yield.

Given the pattern of the pandemic the last 2 years, it maybe 2 months or more before China can get on top of its present pandemic. Lacking sufficient data and details, we can only observe the activities as shared in news.

PE 16.16

This is a great company to keep for the long term. Buy when the price is obviously low.

The price was too generous and has since corrected. Moreover, commodity price inflation will shrink its margins for now, until it passes the costs to the consumers. In any case, still a very good business to own when the price is down. Growth will be mainly from Thailand and the Indo-China countries.

Due to poor business decisions the last few years, the fundamentals of this company have deteriorated hugely. Avoid.

>>>
Posted by qqq3333 > 1 hour ago | Report Abuse

S=QR. The R in the formula can positive or negative. That's life

>>>>>>


My simple investing formula is QMV. :-)

>>>>
Posted by Sslee > 3 hours ago | Report Abuse

Posted by qqq3333 > Apr 5, 2022 11:36 PM | Report Abuse
stock market truly got a lot of i.diots.

This one I totally agree. This is why many people include the superinvestor lose their pants in JAKS, Sendai and many ikan bilis in Serbadk
>>>>


I first heard of SerbaDinamik from one of my nephews maybe 3 years ago. "Uncle, please look at SerbaDinamik, I like this stock." I had a look at it and told him. "It is too new in the stock market and without a longer track record, it is better to avoid it. Look for others." :-)


Simple rules like so, keep one's investing safe.

Of course, for speculators, the story is different. :-) Look at Netx thread promoted by calvintan.

>>>>
Posted by Fundamental Trader > 52 minutes ago | Report Abuse

FYI, The MC/FCF aka P/FCFps that i'm currently willing to pay is <12.

A manageable mini portfolio < 10 stocks from various high performing sectors should suffice. More than that is simply counter productive.

The initial P/FCFps < 20 was merely a preliminary starting target.

>>>>


Keep investing simple and safe KISS

Look for a great company. A business you understand. A business with good DCA. Honest managers.

This company can grow its revenues and earnings consistently over many years and for a long time. It generates a lot of CFO and requires little reinvestment of capital (capex) to maintain its business or to grow. Usually, it is cash rich and generates increasing FCF. FCF can be used to pay down debt (most likely the company has little debt if any), pay increasing dividend, buy back its own shares or reinvest for growth, preferably through organic growth and occasionally, through acquisition. The business ratios are generally very good. Look for one with high ROE (>15%), and high ROIC (>10%), preferably.


When to buy? Be greedy. There will be opportunities to buy into a company during a period when the market (aka the players in the market) is most depressed. If you can acquire a company with the above characteristics at a FCF/Market cap of 6% or higher, do not hesistat. Load up and seize the opportunity offered by Mr. Market. Alas, one has to be very patient, very patient and disciplined indeed.

>>>>
Posted by Sslee > 17 minutes ago | Report Abuse

Buffet buying business not the stocks.
For common people we are buying stocks not the business hence many turnaround or cyclical businesss when buy at right time and sold at right time with give you are a better and faster return.
>>>>>


Yes and no.

Each time, one of my particular stock in my portfolio doubled, the incremental gain from this exceeded all the gains I collected from the same stock over the preceding 20 years ... and this incremental amount ain't small. It is huge due to time in the market and due to compounding and the conviction to put a large amount of money to work in a single stock.

In many respects, my style of investing differs from the majority of the players in this forum.

With the economy opening up, Aeon Credit should benefit. It is well managed. Also, should the lowest pay be increased to RM 1,500 per month, its business revenue should benefit from this too. We can expect its dividends to return back to its previous years' levels.

Why has the peace talk not succeeded to-date? Even if the President of Ukraine is agreeable, his allies are not. I think the President of Ukraine should act independently of his external big supporters. Sadly with the indecisiveness and delay, there will be more destructions and deaths, which could be prevented.

Cypark's business should have some moat. Yet, if you have bought its shares 5 years ago, you have incurred losses in your investment into this company. Why?

>>>>
I spare you all the technicals which you can search yourself and jump straight down to the methodology of how I found my gems.

First, narrow down a total of 1025 stocks in Bursa using Warren Buffet's simple rules:

1. Debt to Equity Ratio < 0.5

2. Current Ratio > 1.5

3. ROE > 10 (Buffet prefers higher, i use lower here since Bursa's ROE is not as high as US)

You then left with only 103 stocks.

Then, proceed to make sure stocks with only QoQ and YoY growth, they must make consistant and continuous profits in the last 4 quarters.

Next, very important to filter out all stocks that does not generate Free Cash Flow (FCF) or very little FCF, I use Price to FCF Ratio < 20 here to improvise, cause Cash Flow is the blood of business.

Notice that I ignore PE so far, because after you have gone throught all the methodology I mentioned above, you will certainly reach low PE anyway, that is why the focus is not PE but everything else mentioned earlier.

Finally, choose only Top 3 stocks (by lowest P/FCF) that comes from 3 different business model.

So, guess which stock do i get eventually?

I will give you the answer when we reaches 20 comments below.

So post your comments here and check back this space for the answer to the 3 gems i found.

Sharing is caring.

>>>>>



Buffett keeps his investing simple, but not easy.

1. He looks for businesses he understands. (Business model)
2. The businesses must have durable competitive advantage. (Moat principle)
3. These businesses are managed by people with integrity. (Son-in-law principle)
4. Finally, he acquires them when the price is right. (Margin of Safety)

Plantation owners are happy today. Big plantation owners are happy and yet sad too. Spoke to one who said it was sad to see such valuable fruits on the trees unharvested due to labour shortages.

Inflation has reared its ugly head in many countries. The central bankers are strategising to control inflation without killing the vulnerable growth in their economies. Using measured steps in increasing the interest rate to fight inflation, they are forever vigilant to what follows after each intervention. Stagflation may result should inflation not be controlled and growth in economy stifled.

Totally not necessary to write a religious explanation for now.

Its historical PE is 4 to 5. Seems overvalued today.

High quality stalwart in Bursa. My fair value for PBB ranges from 3.90 to 5.20 per share. Hold for the long-term. Caveat emptor.

When is the best time to sell plantation stocks? At the point of maximum optimism.