dear inteligent investor can you please help and guide us..by using this screener, how should we retail investor go arround in searching for good uptrending stocks?? please help us, what values should we put in,,inorder to screen out some good stocks..please guide us..thanks
I will start with the first one, Pelangi Publishing Group
Yardstick 1: ROE PPG reported net profit of 6.6m last year. With its equity of 90m, ROE is about 7.4%. this is below 10%, not so good. But bear in mind that it has excess cash of 30 sen per share.
Yardstick 2: Cash flow and free cash flow The average cash flow from operations (CFFO) for the last two years was 13.4m. This is 203% of its earnings of 6.6m. This shows its good quality of the earnings. After spending in capital expenses, there is a free cash flow (FCF) of 7.9m left. This FCF is high at 12% (>>5%) of its revenue.
Yardstick 3: PER PPG is trading at 58.5 sen now. With EPS of 6.4 sen, the PE ratio is 9.2, or less than 10. Bear in mind again that there is an excess cash of 30 sen per share.
Yardstick 4: Dividend yield PPG paid a dividend of 2 sen for the last financial year, or a dividend yield of 3.4%, about the same as the FD rate which is good.
Yardstick 5: NTA The net asset backing per share of PPG is 90 sen compared to its price of 58.5. Price-to-book is at 0.65, much less than 1 which is cheap.
PPG seems to meet all the criteria of Cold Eye as an investment except for a lower ROE.
PPG 0.585 13/06/2014 Revenue 66421 1 ROE 7.4% <10% Good Net profit 6591 Equity 89672 2 Cash flows Av CFFO 13386 203% Good FCF 7894 11.9% Good 3 PE ratio 9.2 <10 Good Price 0.585 EPS 0.06383 0.1065 4 Dividend yield Dividend , sen 0.02 Dividend yield 3.4% <3.5% ok 5 Price/NTA 0.65 <1 Good NTA 0.90
KSL paying dividend? Please check their cash flow statement! They are operating with negative cash flow! How to pay dividedn? Please bear in mind net profit doesn't equivalent to cash received! You might record super high profit but you may fork out a lot of cash! Furthermore they need to replenish their land bank! Hence they are not generating free cash flow. As they do not generating free cash flow how are you going to expect them pay you high dividend?
You are right. KSL is in positive cash flow from operations every year. It spends a lot of money for buying and development of land. Hence its free cash flow over the last few years on average is slightly negative. That could explain why it did not pay dividend for 2-3 years already.
But I think buying and development of land is a good asset allocation for the management to do. After all KSL is a property development company. Do not pay dividend is not such a bad thing as long as the money spend on better thing like buying and development of land, and yield return higher than marginal cost of capital, paying down debt (you can see debt net debt decreasing last three years). It is better than many companies because of following institutional imperatives, borrow and pay dividend, and embark on acquisition outside its business.
Thanks KC. I think total return is more important rather than paying dividend. I prefer the money to be reinvested into business for growth and earn more return in future which is what they are doing now based on the latest quarterly result.
Yardstick 1: ROE MFCB reported net profit of 740.5m last year. With its equity of 679571, ROE is about 10.90%. this is above 10%, so it is good.
Yardstick 2: Cash flow and free cash flow The cash flow from operations (CFFO) for the last year was 122.6m. This is higher than its earnings. After spending in capital expenses, there is a free cash flow (FCF) of 54.3m left. This FCF is good at 8.64% (>>5%) of its revenue.
Yardstick 3: PER MFCB is trading at 2.32 sen now. With EPS of 33 sen, the PE ratio is only 7.03, or less than 10
Yardstick 4: Dividend yield MFCB paid a dividend of 7.5 sen for the last financial year, or a dividend yield of 3.2%, about the same as the FD rate which is good.
Yardstick 5: NTA The net asset backing per share of MFCB is 2.37 compared to its price of 2.32. Price-to-book is at 0.92, less than 1 which is cheap.
MFCB seems to meet all the criteria of Cold Eye as an investment grade stock
MFCB 2.32 19/06/2014 Revenue 628758 1 ROE 10.90% >10% Good Net profit 107185 Equity 679571 2 Cash flows CFFO 122604 114% Good FCF 54323 8.64% Good 3 PE ratio 7.03 <10 Good Price 2.32 EPS 0.33 4 Dividend yield Dividend , sen 0.075 Dividend yield 3.2% >3.0% 5 Price/NTA 0.92 <1 Good NTA 2.37
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....