Disagree with zero growth is not investable. As you mentioned a higher ROE the better. A company can have high return on capital but due to lack of investable opportunities, decide to return most of the earnings to shareholders. That would still mean shareholders return should track the return of the business over the long-term. Sees candies is a good case in point.
Think it in term of FD account. You have 2 FD accounts. Both gives you 20% of interest per annum. The difference is that one, you can let the interest earned sit in there and let it compound; the other, you have to take out the interest every year. So if you invest $100, both cases you get $120 at the end of year 1. One you can reinvest the whole $120; the other you've to take out the $20.
In this case, the former is consider a 'growth' account, it is great. You reinvest all the earnings and compound that at 20% p.a. The latter is great too. You took all the interest out, so no growth, every year reset back to your principle. But you still get 20% p.a regardless. Yes, the former is definitely better than latter. But latter is still terrific.
So in case one, your $100 return will look like 120, 144, 173, 207, 248, 298 etc Case two, your $100 return, incl. what you get from interest, looks like 120, 140, 160, 180, 200, 220. Yes, if you can find the first one, by all mean get that one. But no stocks can grow that way forever, it will eventually become like the case two. Case two means more hard work. The $20 you collect every year, you have to find another investment that gives you the same return, which is 20% in order to match it. That underlies the dilemma of companies with high payout ratio. The dividend you get means you have to find somewhere to reinvest. And most of the time people just spend it, losing the power of compounding.
there is no reason for petron to fall as world oil price moving up..... it is all maniputated by ppl who wanna buy it a lower price..... target petron rm 17 by February when coming near to QUARTERLY FINANCIAL RESULT
Do not worry If you can't not worrying Then read sifu pjseow analysis A very good analysis
pjseow: Coldeye 's five important criteria for stock selection in order of importance
1. Earning Growth ( THe most important ) Its earnings has been growing since 2015 . Expect 2017 earnings to double that of 2016 . THe announcement that Petron will invest further to more than double its earnings within 3 years is another testimony that management will continue to growth the company .Besides , Petronm will be growing its retailed business from 550 stations to more than 580 .
2. Good Cash Flow It has successfully paid off its debt and become a net cash company since last qtr .
3. PER It is at an undemanding PER of 8 with today's price .
4. ROE The current ROE stand at 30
5. Dividend Yield ( The least important )
DY of 1.78 is better than many high growth companies with high PE .
Earning growth is the most important criteria . If a company has no growth or negative growth , do not invest even though its PE is super low and with good dividend . A good example is Tambun . Its share prices were more than 2.00 a few years ago with below 10 PE and dividend yield of more than 7 % . The property sector has negative growth since 3 years ago .Tambun 's earning also dropped since then . Its price become half of RM 2.00 although its PE is less than 5 and its DY is more than 9 % now .
There are many low/stagnant growth company that rise in price due to increasing div dist. UCHITECH, HLIND, CSCENIC, PERSTIM are few of them. TAMBUN is quite a good growth company, not really stagnant
Shpg22 Uchitec used to be a great stock 10 years ago .its prices were more than Rm 3 . When its earnings started to go down , its prices dropped to about 1.30 for many many years. Those invested with more than rm 3.00 lost money. It was only one and a half years ago uchitec started to grow its profits which were mainly due to the depreciation of the ringgit by as much as 30 % .Uchitec prices had gone down from the tecent high of 3.50 to rm 2.76 when ringgit strengthen to 3.88 today
Shpg22 Uchitec used to be a great stock 10 years ago .its prices were more than Rm 3 . When its earnings started to go down , its prices dropped to about 1.30 for many many years. Those invested with more than rm 3.00 lost money. It was only one and a half years ago uchitec started to grow its profits which were mainly due to the depreciation of the ringgit by as much as 30 % .Uchitec prices had gone down from the tecent high of 3.50 to rm 2.76 when ringgit strengthen to 3.88 today
We must have a strong psychology All the paper gain and loss are not real Do not let them defeat you Stick to your plan and follow strictly Everything will be fine Good luck
Can buy some more Petronm. Hengyuan is different from Petronm.
Hengyuan is an one off event. Petronm is consistent and sustainable improvements.
Hengyuan got one off gain of say rm500m last year. But need 1500m for the upgrade. You add that substrate that, Hengyuan is worth RM5 a share at best, haha! But those so-called sifu tried to tell you it will make 500m every year. But who cares, everybody likes to cheat others at the same time cheat themselves.
Petronm will make record profit coming result release. Its a good investment.
lowprofileone Record year 2017 for Petronm due largely to better crack spread, expansion of petrol stations and consistent sales growth for its jet fuel.
On top of that, may declare higher dividend due to net cash position despite 14bil expansion plan which is still long way to go.
My entry price of petronm for this year is 13 last year 8 I will average it down to 12 or 11 if you want to sell cheap to me No cut loss because I can afford to lose big. If there is no loss then there is only gain
You have chosen a good stock to invest but you need more a big heart and discipline to benefit from your good choice
Study how my sifu kyy trade. You will appreciate what I Said
Always invest in the share you are confident that that you can win. Then you are more comfortable to average down when the price drops. My tp is just 30%, because I am not that lucky like you can make 100%, then isn't it every drastic price drop turn into an opportunity for me to buy more and gain more with lower tp. I do not believe sell now and buy back cheaper later. Do not cheat yourself, how many time you buy back cheaper later.
supersaiyan3 Can buy some more Petronm. Hengyuan is different from Petronm.
Hengyuan is an one off event. Petronm is consistent and sustainable improvements.
Hengyuan got one off gain of say rm500m last year. But need 1500m for the upgrade. You add that substrate that, Hengyuan is worth RM5 a share at best, haha! But those so-called sifu tried to tell you it will make 500m every year. But who cares, everybody likes to cheat others at the same time cheat themselves.
Petronm will make record profit coming result release. Its a good investment.
YES, AGREE IS DIFFERENT HY EPS IS 311 PE 4 NEXT RESULT OUT ALREADY SHOW EARNING POWER VERY SUSTAINABLE SO HY WILL RERATE PE TO 9 VERY BIG DIFFERENCE
a company which has a plan to improve earning is always better than the one that does not have any. do you want to invest in a company that has no growth? do not worry about the funding , nobody will borrow money to burn , you won't do that, and the management also will not do that , they are not more stupid than you, if not Hengyuan would not have borrowed another 1.7B to upgrade their plant . your wild imagination only convey the message that you are not businessman or a copy cat or just follow blindly what other people said
people like hengyuan because they see there is earning growth if there there is no more growth or limited growth, do you still want to put your money in Hengyuan
Price is not moved by FA alone , you need something to shout about to move the price Game over if there is nothing to shout It is more exciting to chase high and sell higher than to buy low and sell high later so , it is a game who run the fastest
let it drops , then I will collect at 11 to lower my entry to 12 let it drops more , then I will collect at 10 to make it 11 if you have money in the pocket , then every big drop is a big opportunity to make big
I ONLY SCARE IT SLEEPS , THEN MY MONEY IS NOT WORKING FOR ME TO EARN MORE
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....
AliCafe
81 posts
Posted by AliCafe > 2018-01-26 11:55 | Report Abuse
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