The risk with Magni is the concentration of Nike as the main customer. If only they can get more diversified customers, this company should trade at higher multiples. They have been trying to get other customers, but so far Nike still dominates.
The revenue & earnings has topped at year 2017. Seeing it dropping from RM8 is painful (although company gives dividend each quarter). So far waiting the new plant in Vietnam to operate and hopefully that comes with better revenue and earnings.
On assumption that DPS gets MSIG Fire Insurance Claim of RM22 million and HSBC RM17 million Fire Insurance Claim, can DPS be classified as a Cash Cow Company ?.and be a subject of a takeover or privatization target...
Posted by fl888 > Apr 14, 2019 5:27 AM | Report Abuse On assumption that DPS gets MSIG Fire Insurance Claim of RM22 million and HSBC RM17 million Fire Insurance Claim, can DPS be classified as a Cash Cow Company ?.and be a subject of a takeover or privatization target...
You need to understand what a cash cow is which this article is trying hard to explain to you.
You are not the only one who doesn't understand it. I would say a big majority don't understand it also.
That is why I try to entice people to learn the fundamentals of investing, the language of business.
Posted by RainT > Apr 14, 2019 12:09 PM | Report Abuse Magni grow story is not exciting and share price up and down ....also link with Nike sales Carllsberg is at high price now plus with government tax is high Both is not good company
You have to differentiate what a good company is, and what is a good investment. They aren't the same.
Carlsberg is used as an example on how to look for cash cow, or a good company. I never talked about its price.
5 years ago I shared my first piece on Magni in i3investor here,
The adjusted share price of Magni was less than RM1.00.
Whether it is a good company, it was the same issue; single main customer, traditional no moat business, none of its own brand etc.
Since then, its revenue has doubled, or for a CAGR of about 15%, and operating and net income more than 2.5 times,or a CAGR of about 20%. Its share price went up to a peak of RM7.50 three and a half years later, for a gain of 650%.
Again it has no debt and abundant cash in its balance sheet, stable and increasing earnings and cash flows. no wonder it has been paying very good dividend all these years.
Yes, single main customer is risky. But on the other side, if I am Nike and I am growing my business in such a speed, I will prefer a proven reliable and capable sub-contractor and supplier, especially his price is not much different from other new fellows. Nike's advantage comes from its brand, and not so much from the input cost.
Now whether it is a good investment,
At 4.52, magni is trading at a PE of just 7.3, enterprise value just 4 times operating profit, and a cash yield of 12%.
when economy is bad and all stocks are down, it's the time to unload the cash that one has been hoarding to accumulate beaten down quality stocks. don't forget 1998 and 2008 crisis. best time to colelct.
ringgit selldown likely to continue. market is waiting to see if the passive funds are selling their holdings of govvies. more downside to the ringgit if Malaysia indeed to be excluded from the FTSE bond index.
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 7921 views | 7 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....
probability
14,475 posts
Posted by probability > 2019-04-12 18:20 | Report Abuse
feeling hungry for milk now....