Posted by paperplane > 2015-01-16 18:54 | Report Abuse

With so many shr holding in lee family. You think they will shr with you? Kuchai some ppl hold 10yrs still like this. Like facbind.

Posted by kcchongnz > 2015-01-17 09:29 | Report Abuse

Posted by paperplane > Jan 16, 2015 06:54 PM | Report Abuse
With so many shr holding in lee family. You think they will shr with you? Kuchai some ppl hold 10yrs still like this. Like facbind.

You got a valid point. Buy why do you think they are so cheap at huge negative enterprise value? Surely there must be reasons. Don't you think so?

But do you think the long term return of Kuchai is so bad? There is one way we can make an inference if it is so, ie to compare the return of the broad market during the same period. If you look at the comparison of the return of Kuchai and KLCI from the year 2000, or 15 years ago, the longest you can get from Yahoo finance, you will find that Kuchai did quite well despite the stinginess of the major shareholder. Look at the graph in the appended link below:

https://sg.finance.yahoo.com/echarts?s=^KLSE#symbol=^klse;range=5y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

The graph show that since 15 years ago, the return of Kuchai is always above that of KLCI. Yes, all the time. And sometimes it is significantly higher.

Don't trust my words. Look at it yourself.

FACB unfortunately shows a complete different story.

https://sg.finance.yahoo.com/echarts?s=^KLSE#symbol=^klse;range=5y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

That is why any value investing strategy, one must have a diversified portfolio, 10-20 stocks. You made from say 65%, but small loss for 35% of them, then you will do very well. Haven't I shown you the performance of many value investors in US?

The other difference between Kuchai and FACB is I think it is the business. FACB's business didn't do well. Kuchai? Kuchai has not much business except investment in equity and property, and the steady palm oil industry. That is why the value of Kuchai won't deteriorate much. In fact, it rides along with the slowly up trending market.

That is why I think Kuchai is very safe to invest, at this low price Vs value.

"Heads I win, Tails I don't lose much"

Posted by kcchongnz > 2015-01-17 11:02 | Report Abuse

Oop the comparison chart doesn't come up. But you can use that KLCI chart and then type in 2186.kl for Kuchai in the "Compare" slot, then you see those two price movement curves. Use the "Max" period.

Posted by NOBY > 2015-01-17 22:20 | Report Abuse

well lets be fair in comparisons. FACB only became negative enterprise stock after disposing its steel business in 2013, to make comparisons prior to that may not be relevant. for past 2 yrs it slightly underperform klci while past 5 yrs it still outperform klci based on the yahoo charts. From a NNWC valuation standpoint , Kuchai does have more margin of safety, but if you look at historical p/b, FACB is trading at a steeper discount to its historical p/b, hence may offer higher upside should there be a mean reversion...

Posted by kancs3118 > 2015-01-18 14:22 | Report Abuse

Hi kcchongnz, may i ask some help from you ? recently, i performed a valuation on Gadang using net net assets valuation method (ben graham) to determine the downside risk. It seems Gadang is a good buy as long as it is between RM1.30 to RM1.40. Is it ok if i email you my thinking process ? It will be great if you can access the reasonableness of my thinking...

Posted by kcchongnz > 2015-01-18 17:52 | Report Abuse

Posted by kancs3118 > Jan 18, 2015 02:22 PM | Report Abuse
Hi kcchongnz, may i ask some help from you ? recently, i performed a valuation on Gadang using net net assets valuation method (ben graham) to determine the downside risk. It seems Gadang is a good buy as long as it is between RM1.30 to RM1.40. Is it ok if i email you my thinking process ? It will be great if you can access the reasonableness of my thinking...

Gadang is not a Graham net net stock. It appears to be inexpensive earnings wise at the price you mentioned.

Posted by duitKWSPkita > 2015-01-18 17:55 | Report Abuse

Thanks Mr Kcchongnz for your valuable info always.

Like to learn from your discussion. Mostly are eye opening points.

Thanks thanks nothing else...

Posted by paperplane > 2015-01-18 21:35 | Report Abuse

My point is not using nnwc alone. My first priority is always look at holders, who are controlling behind, their mgt, also the percentage of top 30%.

Posted by kcchongnz > 2015-01-19 05:24 | Report Abuse

Posted by paperplane > Jan 18, 2015 09:35 PM | Report Abuse
My point is not using nnwc alone. My first priority is always look at holders, who are controlling behind, their mgt, also the percentage of top 30%.

Sure sure, everyone has his own investing strategy. NNWC is just one of the proven successful investing strategies to utilize in a diversified portfolio of stocks which I have provided evidence.

I also know about other proven investing strategies such as Greenblatt's Magic formula, low PE, low P/B, Low market cap, Jockey Stocks, Follow the leaders, etc but I have never heard of any proven successful strategy by looking at the controlling shareholder, management and the top 30 shareholders.

I only mentioned and provided facts that Kuchai is a dirt cheap negative enterprise value stock. Hope you understand what I mean. And may be it is worthwhile to be patient investing in it. I never said its controlling shareholder/management is good in taking care of minority shareholder.

Posted by NOBY > 2015-01-19 09:03 | Report Abuse

With these type of stocks, it is better to diversify across at least 10 to 20 of them to increase the chances of success. I hv no confidence on my ability to judge management or their intentions.

Posted by kancs3118 > 2015-01-19 10:38 | Report Abuse

Hi KCChongnz,
What is the meaning of
"Gadang is not a Graham net net stock. It appears to be inexpensive earnings wise at the price you mentioned."
Care to elaborate? Also, how do we value the earnings?

As usual, thanks for your input.

Posted by kcchongnz > 2015-01-19 10:55 | Report Abuse

Posted by kancs3118 > Jan 19, 2015 10:38 AM | Report Abuse

Hi KCChongnz,
What is the meaning of
"Gadang is not a Graham net net stock. It appears to be inexpensive earnings wise at the price you mentioned."
Care to elaborate? Also, how do we value the earnings?

Read the article here again and understand what Graham net net is.

There are numerous ways of estimating the intrinsic value of a stock. Some of them are listed here:

http://klse.i3investor.com/blogs/kcchongnz/68009.jsp
This talks about ROIC and EY

http://klse.i3investor.com/blogs/kcchongnz/67260.jsp
This talks about some simple ratios but very useful and back of the hand.

http://klse.i3investor.com/blogs/kcchongnz/56316.jsp
This uses discount cash flow analysis

Posted by kcchongnz > 2015-01-19 11:49 | Report Abuse

Posted by paperplane > Jan 18, 2015 09:35 PM | Report Abuse
My point is not using nnwc alone. My first priority is always look at holders, who are controlling behind, their mgt, also the percentage of top 30%.

http://klse.i3investor.com/blogs/kianweiaritcles/68676.jsp