Riche, just a kind advise, IamGoogle is actually correct.
You using PE Ratio wrongly and accidentally misled others.
Like any valuation tool, DCFA, DDM, PER, etc, you must first understand it's uses and limitations.

For PER, you must compare your stock's PER against the industry and it's peers.
Gkent has a PER of 11x, while construction industry is roughly 13-14x PER (if I recalled correctly).
So Gkent is actually still undervalued, not fairly valued.

You must compare orange with orange, apple with apple. You should not be comparing Gkent with Mycron and Penta.
One is construction, one is commodity, one is technology.
It doesn't work that way.

PER also doesn't work in a company that has debt, as debt can influence earnings.
What is Gkent's debt? What is Mycron and Penta's?
That's why you cannot stack them together and compare.

This is a constructive criticism, not a personal attack.

@yfchong - As a reader and a fans of Cold Eyes myself, sorry to say this but, his book is actually only tip of the iceberg of Value Investing. Value Investing goes deeper into that.

Here's some fun fact, many of his content were actually phased out and replaced with simpler and shorter ones due to limitations of a book's length and it's easier to read for newer investors.

If you are interested, I could recommend a few other books to you, but it will take great effort to read and digest them, many would just give up eventually.
Instead I'd recommend you enroll KC's course to see yourself what he has to offer.

Over the years, I've concluded that Value / Fundamental Investing is a complete package, consisting of business analysis, accounting analysis, valuation analysis, investing strategy, investing psychology and philosophy, and some basic economics.
They are like a pillars that support a building. Lacking is one or two is fine, but you may find your building collapsed one day.

Aiyah any is fine lah, we're just speculating what they are anyway, not like we'd know since we're not management.

Not necessary, but partially yes.

Marketable securities are defined as any unrestricted financial instrument that can be bought or sold on a public stock exchange or a public bond exchange.

Marketable equity securities can be both common stock or preferred stock, commercial paper, banker's acceptances, Treasury bills and other money market instruments.

Yes you are right, but not entirely correct raider.

While marketable securities can be considered cash and is usually converted within 1 year time frame, they are usually converted only when the need of cash arises.
It's like why would you sell your shares if you don't need the cash?

Remember, paying divvy means losing the opportunity for reinvestment.
Plus the income from marketable securities just started rolling, so you'd assume they'd yield it further before selling them.

Two sides to a coin, always consider both possibility.

Thanks chl1989 :)

Personally, I think they may/ may not pay divvy this year, this is because they have just converted a huge chunk of cash to marketable securities, which I assume they will not sell them so fast.

And we have not heard how much the upcoming machine they ordered costs, so management may choose to be prudent in distributing cash during this period of time.

Nonethless, maybe you could throw in an opinion or two and tell them dividend will help stabilize the share price which in turn helps keep investor's capital in the company.

Dear KC,

As Buffett would say: "Value investing is like an innoculation – you either get it right away, or you'll never get it."

Value investing is a lonely journey, and people simply do not like that.
These actions are lonely, as David Swensen says, uncomfortable. That’s why successful investors are said to spend a lot of their time being lonely.

Remember how Buffett and Munger keep themselves to Omaha instead of joining the crowd in Wall Street?

It's alright if you tried to explain to others about Value Investing but they don't understand.
To those of us who understand, know you did your part; you tried your best. Whatever remaining, just let them be. Remember, Value investing is like an innoculation.

The world is a huge place.
White cat black cat, as long as can catch the mouse is a good cat. No right or wrong.
FA, TA, AA, BA, CA, DA... and so called Business sense, as long as they feel like they are making money, why not let them be?

As Cold Eyes says: "In the stock market, 70% of the people will lose money, 20% will breakeven but eventually lose too, only 10% remaining will make money."

Thanks KC for the input, appreciate it! :)

Why overreact to something which is not an issue? They have too much cash on hand, that's why temporarily removed.

Read:
Shariah status woes. Questions were raised on GKent’s Shariah status for the upcoming review by the Securities Commission in Nov. Based on its latest audited accounts (FYE Jan 2016), GKent’s conventional cash over total assets stood at 35.4%. As this exceeds the 33% threshold, we reckon that GKent is likely to be removed from the Shariah list during the upcoming review. We understand that part of its cash will be transferred into Islamic accounts. Management guided that its financials should be Shariah compliant by end FY17 annual audited accounts (Jan).

Yeah, but TEV takes in both core operations (Enterprise value) and non-core operations (Non-Operating Assets), while EV only factors in core operations.

So do you recommend TEV instead of EV?

For every person who gets a good buy in an inefficient market, someone else sells too cheap.

Basic economic theory explains the correlation of supply and demand.
For someone to sell their stock, there must first be a buyer to pick up their shares.
When everyone is so bearish, there is simply no demand even if you have supply -- so how much can a person sell their shares when there is so limited demand?

Logic, logic and logic.
"Take care of the downside, let the upside take care itself."

Dear KC, while going through your articles, I realized that you used TEV instead of EV when calculating EV/EBIT, may I know if TEV is a more accurate measure and why?

Another question, the inverse equation which is Earnings Yield, do you still stick with EBIT/TEV instead of EBIT/EV?

This is the best thing about buying a fundamentally strong but undervalued company - low price associated with low risk.
When it's already so low price, how low can it go?
As I always quote Mark Sellers "Take care of the downside, let the upside take care itself."
WTK already stabilized just like FLBHD.

Just ignore Market noise.

Posted by ABCDEFGHIJKLMN > Nov 23, 2016 02:25 AM | Report Abuse

I have been obsessed to see people saying the price is to less out cash per share, then the net will be the one that you paid for. It is true if you buy the whole business & have control over the cash & business.

But for normal investors like us who can never be the one who can touch the cash, which is beyond our reach, so it is meaningless to say our price is to pay for the net of cash.

In reality, you still pay for the full amount, not the one that less cash.

===================================================================

That is not correct.

Why is the role of Cash in a business?
1) Cash is used to reinvest back into the company - when a business uses the cash to reinvest into itself, it is able to expand the business, launch more product range, etc. This translates into higher profit in the future.

2) Cash is is distributed as dividends. Ever wondered where the money from dividend comes from? This is your answer.
So shareholders DO indeed receive the cash, but in the form of dividends.

3) When a company is liquidated, cash will most likely be returned to it's creditor first or any preferred shares shareholder, then accompanied by shareholder.
Since FLBHD has no debt, so there are no creditor. So shareholders DO indeed receive the cash.

Sales volume for plywood dropped due to slowdown in demand for imported plywood by the Japanese buyers despite there was an improvement in housing starts by 7.1% as compared to 3Q2015. This was mainly due to substitution by cheaper plywood produced domestically.

The Group’s key export markets for round logs were India (97%) and Vietnam (3%). The
export markets for plywood for the quarter under review were Japan (87%) and Taiwan
(13%).

"The profit before tax reduction was due mainly to the major shut down in April 2016 for preventive maintenance, this had resulted in lower production output and hence a higher production cost, and
at the same time, also incurred a higher maintenance cost."

Spillover effect from the major maintenance, that was unexpected, guess we will have to wait for it to normalize. Not an issue for the long term, still on the right track.

The debt is significantly pared,
SHORT-TERM BORROWINGS drop from 35,149 to 8,164.
LONG TERM BORROWINGS drop from 23,216 to 6,947.

Cash and cash Eq jumped from 74,916 to 109,790.

Ahh I see, thank you moneySIFU. I hope you are making money in all of your counters too.
It certainly was a wild and rough ride for all Gkent shareholders, as Gkent experienced many selldowns prior to breaking new high.

This share still commends a look moneySIFU, as it still has potential to run, another Gamuda in the making maybe? I can only wish. If you do, do buy with aplenty of Margin of Safety yeah :)

Hevea does not sell to US. Their main export is to China and Japan, a certain portion is to other parts of Asia.
However, their sales is denominated in USD. So they benefit from rise of USD.
What has Trump to do with Hevea?

Greetings, moneySIFU. You also own Gkent?

I recommend look past the dividend payment issue.
Even if they didn't pay this year, they could always opt to pay 15 cents next year all together.

Generally speaking dividend is not compulsory, dividend payment is just to show their commitment towards the shareholder.
Most companies stop their dividends during difficult times, but pays better dividends during boom time.

Broke 3.00, fantastic!

Let us not forget that management is currently in the midst of finalising a deal to acquire new machinery producing plywood with different sizes and specification which it's current production facility is unable to perform.
Management aims to increase the sales volume to US market with the production of these sizes of plywood.

Patience is virtue, those who cannot be patient enough, feel free to sell.

Thanks for the input on the 42,845 mil.
That explains how the 61,303mil Other investments under Current Assets comes from.

If I may add, Net purchase of other investments (42,845 mil) under Capex, any idea what could this be?

Agree with chl1989, popo is smart. :)

popo92 Q4 results will be good since receivables of delay sales 11.8million will gain on forex too. This happened on Q2 2015 too.

Well done Yun Kai. :)
I thought nobody would have spotted the sudden change in inventories from 25m to 40m. Few millions profit waiting to be realized.

"Focus on the Downside, and Let the Upside Take Care of Itself" - Mark Sellers.

At current price, you are basically buying the cash of the company, much less it's operations. This is a net-net investing strategy.

What is the downside? Very minimal.
What is the upside? Huge potential.
What is the Margin of Safety? At current price, very high.
Last resort, low P/B acts as a buffer in case of things goes wrong.

So do you still worry about one quarter of bad result?

Posted by RUOutOfUrMind > Nov 17, 2016 07:55 AM | Report Abuse

Q: Ezra_Investor, I don't judge people whether they know or don't know, not even judging them that they don't know what they don't know. Don't think you are so superior to think other people don't know & you are the only one to know.

A: I've never claimed to be superior to anyone, since when?
Which word, which statement did I tell everyone I'm more superior than them? C'mon, tell me.
I don't claim to know everything, but when I write, I must make sure I KNOW something.
The reason why I judged you is because your arrogant yet ignorant attitude.
As they say "Empty can makes the most noise".
As KC would say “Empty tong, pong, pong, pong”.


Q: I am here to look for investment opportunity to make money, not here to teach people. You go ahead with your life purpose but don't ever think all others are stupid. You are also kind of stupid to think you are clever than above all.


A: That's your problem. Don't mix me with you.
I'm here to make money, but also doing my part of the social responsibility towards the investing community.
At least when I make something I give back to the society, ask yourself, what have you contributed back?
I never thought others is stupid, I only think you ARE stupid.


Q: Ezra_Investor, you are so right, don't try to teach people when people never ask you to teach, or else you make yourself looked stupid OR too ego.

A: Whether I teach others or not is up to me. Whether people listen or not is up to them.
I cannot force others to accept my opinion, but I can choose whether to at least try or not.
Plus I wasn't even teaching you in the first place, I was talking to MoneySIFU.
If MoneySIFU didn't complain anything, so what what basis do you campur your mouth?
As they say "Mind your own business".

Q: Posted by RUOutOfUrMind > Nov 17, 2016 08:02 AM | Report Abuse

Ezra_Investor, I will be so pleased to see you to remove your posts, you are making right move to rectify yourself. If you really want to teach people, do like what KC do, write more article to teach people, let those interested to be taught to read your articles(s).

A: You're wrong. I'm only removing it because I'm dishearten by people like you, not because I've made a mistake.
The reason why I never write an article is exactly because of people like you.
When you give people something good for free, they will never appreciate. So why should I?
I only like to teach selective and potential people who I like, just like moneySIFU.

Please stop talking. I'll stop here as well.
It's a waste of time to talk to you, as you keep on twisting my words and intentions.
And time is money. Time wasted is money wasted.

I will remove my postings, feeling dishearten by people like you, there's no point teaching others.

Funny, either you are truly stupid, or you are arrogant but truly ignorant.
Since when have MoneySIFU truly written any analysis of a company?
It's Wealth Wizard who wrote them, not him. He supplement information on them.

You'll be surprised on how many people don't know what they don't know.
You are a classic example of them.
As an investor, we have an social obligation educate people.

It's alright, people like you are the reason why I don't like to teach people.
You cannot teach people who doesn't want to learn.

Posted by RUOutOfUrMind > Nov 16, 2016 11:49 PM | Report Abuse

Funny, first time I see people teaching moneySIFU. Haha, moneySIFu don't know PE? Laugh die me lah, go & check his comments, he is one of the knowledgeable members in i3.

No problem, just pointing out how to demyth the 10 PER myth.
Now that you understand it, this will come in handy next time when you value a stock.
Do understand that valuation is as important as the business itself, moneySIFU.
A wonderful business brought at a high price equals disaster.

Hello Icon8888 bro, it's been awhile hasn't it?
How are you faring? From your article I assume you have been doing well?

Actually, with WTK you already have a proxy to CPO, so no need to worry too much about it.

Anyway, not all Value Investors hold their stocks indefinitely.
This is a trait only practiced by certain value investors like Buffett, Graham, Peter Lynch. Other value investor such like Marks, Browne does not hold indefinitely and sell when it reaches it's above intrinsic value.
I believe you belong to the latter group. No right or wrong, just different strategies for different individuals.

@tksw - The theory of investing is a simple one.

Think investing like buying something you like, for example, BMW, Mercedes, Ferrari. When it gets a price cut or discount, you should be more happier.

When you apply to it stocks, when it drops more, you should like it even better, not the other way round, you are doing it wrong lol.

Be a contrarian. Be fearful when others is greedy, be greedy when others is fearful.

Result should be releasing soon, from historical date probably next 2 weeks.

Result should be releasing soon, from historical date probably around this or next week.

Result should be releasing soon, from historical date probably around this or next week.
Those who are not confident with the company, feel free to sell now.
To me, Flbhd is a wonderful company. High ROIC, Narrow Moats, High FCF. Few quarter of bad results does not affect my view on this.

Not to add salt to the injury, but no matter how good a stock is, if you feel like the management is not honest and trustworthy, then you can pretty much discount it.

As my teacher Warren Buffett would say: "Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. ... If you hire somebody without [integrity], you really want them to be dumb and lazy."

Buying a company's share is like doing business as a partnership, if your partner in business cannot be trusted, then it's only matter of time before he will stab you one day in your business.

Haha kakashit pun here ka? Greetings.

HLBank Research
http://klse.i3investor.com/blogs/hleresearch/107825.jsp

Gkent 大反击。
http://www.bursamalaysia.com/market/listed-companies/company-announcements/5248561
"Patience is virtue" - Warren Buffett. Good things only comes to those who wait patiently.

You are welcome moneySIFU.

Thanks Chang Wt for the article on ECRL. That's one big slice of cake.

Posted by 8Huat8 > Nov 1, 2016 08:18 AM | Report Abuse

You are quiet stupid la....the ppl here all are looking for fast money not fundamentals!those company can up fast that is good company.we all not fund managers la.....

===========================

Typical case of “Nowadays people know the price of everything and the value of nothing.” ― Oscar Wilde detected.

All those skeptics only talk about price, rumors, blah blah blah.
Why don't anyone talk about fundamentals?
You are buying a company after all, not buying an electrical blip.
“Nowadays people know the price of everything and the value of nothing.” ― Oscar Wilde

Glad to be part of the 3 million readers.
Cheers, here's to another 3 million readers KC.
Keep up with the good work.

Posted by Wing50 > Oct 30, 2016 05:30 PM | Report Abuse

We have to understand that this is only an advertising article. So, it has to repeat again and again the same old story!

By the way, we all know that up-to-date company information is vital in a decision as to whether to buy or sell a share. Share price reacts to constant changes to this information and not some historical financial data.

=========================================

If you read a lot of financial books, you will discover that people actually have very short term memory especially when it comes to financial memory.

Imagine if one day KC stopped writing completely, within 1-2 years, nobody would have remembered him, not to mention value investing.
Do you know value investor is actually only a minority group in the market?

As much as KC keeps repeating like a broken record, I think it is a necessity to do so.
Maybe KC you could add some spice into it, by add some new fresh element? or maybe talk some up to date topics like how felicity commented on Gadang?

Anyway, do keep up with the good work KC.

That's why be an investor, not a speculator.
http://www.safalniveshak.com/investing-a-losers-game/
Stock market is already a loser's game, but if you speculate some more, what are the odds you'll win?

I can only say, when one person sneeze, other friends also feels the vibration.

Lol, comparing apple with orange. It simply doesn't work that way.
Gkent and Gadang is two different fruits.

Gkent is so called construction company, but actually is specializing in railway construction and water metering, and not build properties and buildings like Gadang.

Gkent secured 5.5 billion contracts, Gadang 700million+
Gkent has good cash flow, high levels of cash. Gadang has very erratic cash flow over the years.

Don't worry about government no money to pay them, as long as the contract is legally binding, the government will still legally obliged to pay them even if they have to delay the payment.
Meanwhile Gkent still has other projects running, plus let's not forget it's water metering segment is also contributing, and it has high levels of cash to sustain it's operations.