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19 comment(s). Last comment by vinext 2015-11-03 02:13

johnny cash

6,362 posts

Posted by johnny cash > 2014-06-13 13:57 | Report Abuse

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

http://www.bursamarketplace.com/index.php?ch=ch_themarket&pg=pg_tm...

Posted by Intelligent Investor > 2014-06-13 14:08 | Report Abuse

In my opinion, that screener not able to key in Cold Eye’s 5 yardsticks criteria.

kcchongnz

6,681 posts

Posted by kcchongnz > 2014-06-13 15:20 | Report Abuse

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

Posted by Intelligent Investor > 2014-06-13 15:59 | Report Abuse

Mr Chong, thanks for the input.

pinpin1314

277 posts

Posted by pinpin1314 > 2014-06-13 16:51 | Report Abuse

something like tambun ..:)

regnig

259 posts

Posted by regnig > 2014-06-13 17:51 | Report Abuse

TienWah poised to break bottom line

emperor

14 posts

Posted by emperor > 2014-06-13 21:24 | Report Abuse

Mr chong , intelligent investor, what do you think about stock LCTH (5092)?
Cause I found this stock have very good NNCW and graham no. Any comment or advice? Thanks in advance.

lmenwe

143 posts

Posted by lmenwe > 2014-06-15 16:29 | Report Abuse

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?

coolio

623 posts

Posted by coolio > 2014-06-15 17:00 | Report Abuse

Did I say KLS paid dividend? please look again, and please look at their cash flow statement again!

kcchongnz

6,681 posts

Posted by kcchongnz > 2014-06-15 18:10 | Report Abuse

coolio, well done.

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.

coolio

623 posts

Posted by coolio > 2014-06-15 19:49 | Report Abuse

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.

coolio

623 posts

Posted by coolio > 2014-06-19 23:40 | Report Abuse

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

kcchongnz

6,681 posts

Posted by kcchongnz > 2014-06-20 19:13 | Report Abuse

coolio,
Good on you. You have the spirit of Cold Eye, one of the most successful individual investors in Bursa.

Your yardsticks to me are similar to Emily below, even better with your considerations on cash flow as one of the criteria.

http://klse.i3investor.com/servlets/forum/600054641.jsp

Posted by Intelligent Investor > 2014-06-21 13:40 | Report Abuse

Hi Coolio,

I believe you are. Do share more your study with us. It is good.

Posted by stockoperator > 2015-02-01 00:01 | Report Abuse

Good article by II and good effort by Coolio. KC should be very proud.

As usual the amount of Understanding you have on the Business itself is the amount that you shall earn in the future.

Bruce88

1,136 posts

Posted by Bruce88 > 2015-02-01 10:35 | Report Abuse

Good infor...

vinext

117 posts

Posted by vinext > 2015-11-03 02:13 | Report Abuse

to: KC & all
1 thing he neglected, gearing ratio
also, EV/ FCF is more accurate than roe,which is smoetimes misleading

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