Posted by ipomember > 2014-05-30 14:16 | Report Abuse

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.

Posted by Intelligent Investor > 2014-05-30 14:19 | Report Abuse

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.

Posted by NOBY > 2014-05-30 14:24 | Report Abuse

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.

Posted by johnny cash > 2014-05-30 14:27 | Report Abuse

Intelligent Investor--- thanks for the above article

Posted by Intelligent Investor > 2014-05-30 14:29 | Report Abuse

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.

Posted by splaw > 2014-05-30 14:33 | Report Abuse

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

Posted by Intelligent Investor > 2014-05-30 14:39 | Report Abuse

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

Posted by sosfinance > 2014-05-30 15:37 | Report Abuse

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

Posted by speakup > 2014-05-30 15:47 | Report Abuse

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

Posted by fookchng > 2014-05-30 15:52 | Report Abuse

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.

Posted by Intelligent Investor > 2014-05-30 16:01 | Report Abuse

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.

Posted by Intelligent Investor > 2014-05-30 16:05 | Report Abuse

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

Posted by stockoperator > 2014-05-30 16:37 | Report Abuse

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.

Posted by stockoperator > 2014-05-30 16:42 | Report Abuse

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

Posted by Foresight123 > 2014-05-30 21:37 | Report Abuse

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

Posted by Intelligent Investor > 2014-05-30 22:22 | Report Abuse

P/E = Price / EPS

Posted by Foresight123 > 2014-05-30 22:40 | Report Abuse

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

Posted by Rav > 2014-05-30 22:48 | Report Abuse

Yup your P/E is wrong

Posted by Intelligent Investor > 2014-05-30 23:00 | Report Abuse

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.

Posted by Heng611 > 2014-05-31 11:46 | Report Abuse

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

Posted by wanderabara > 2014-05-31 15:39 |

Post removed.Why?

Posted by icon8888 > 2014-05-31 18:23 | Report Abuse

The PE calculations don't look correct.

Posted by Rambotan > 2014-05-31 18:24 | Report Abuse

Kekekeke....talk 3 talk 4 again

Posted by markkim > 2014-05-31 18:31 | Report Abuse

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

Posted by rlch > 2014-05-31 19:06 | Report Abuse

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.

Posted by johnny cash > 2014-05-31 19:10 | Report Abuse

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

Posted by NOBY > 2014-05-31 20:24 | Report Abuse

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

Posted by yfchong > 2014-05-31 20:39 | Report Abuse

That is a good tools to check on roe n pe

Posted by Intelligent Investor > 2014-05-31 21:06 | Report Abuse

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.

Posted by Intelligent Investor > 2014-05-31 21:07 | Report Abuse

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."

Posted by Intelligent Investor > 2014-05-31 21:10 | Report Abuse

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). "

Posted by stockoperator > 2014-06-01 01:54 | Report Abuse

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

Posted by stockoperator > 2014-06-01 02:04 | Report Abuse

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.

Posted by stockoperator > 2014-06-01 02:06 | Report Abuse

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?

Posted by stockoperator > 2014-06-01 02:09 | Report Abuse

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.

Posted by stockoperator > 2014-06-01 02:10 | Report Abuse

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

Posted by stockoperator > 2014-06-01 02:14 | Report Abuse

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??

Posted by stockoperator > 2014-06-01 02:17 | Report Abuse

Unconsciousness will produce Unnecessary Attachment.

High consciousness reigns supreme.

Posted by stockoperator > 2014-06-01 04:38 | Report Abuse

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