There are some update on the V-Asset Sheet, please refer to v1.51 http://intelligentinvestor8.blogspot.com/2014/07/update-v-asset-and-v-ddm-on-financial.html

Hi Nicholas,

I am not sure what is the problem. You just have to open the file with excel once you download it.

Hi Nicholas,

I just click the view annual report icon on the year that I need to view on http://www.klse.my/stock/result/annual/9598.jsp#stockDetailDiv and I didn't select the "no filter", "Begin with",,etc.

I never encounter the issue which you mentioned.

You may want to try it on another web browser or computer.

Hi Nicholas,

You are encouraged to refer to my post - http://intelligentinvestor8.blogspot.com/2014/06/analysis-template-v102-and-answer-to.html to look for the annual report.

So far I haven't facing any issue to download the report.

The data for PTARAS (which showed in the my excel template) was downloaded from http://www.klse.my/stock/result/annual/9598.jsp#stockDetailDiv

And, this is one of the sample - Annual Report FY 2013
http://www.klse.my/staticFile/327313.jsp

Give a try and happy value investing.

Hi Pak Lah, welcome onboard. Happy value investing.

you are welcome. may i ask if any of you was started to use the template?

hi all, you are welcome.

Do let me know if you have any feedback.

Hi Mr Chong,

Thanks for your reply.

How about PTARAS? In view of the stock price risen so much on pass year, the EY is now < 15%. I am using 10-Jun-14 data (stock price 4.09) on my excel - http://intelligentinvestor8.blogspot.com/2014/06/magic-formula-on-financial-statement.html and the EY should be much lower based on latest closing price of 4.39.

Should a hunter move on from this stock and perform hunting on another context?

I have include the magic formula to my excel template. Feel free to review and make use of it. http://intelligentinvestor8.blogspot.com/2014/06/magic-formula-on-financial-statement.html

Hi Ayam Tua, it is not about future prediction. It is about portfolio management.

Hi Mr Chong,

Do you plan to rebalance your portfolio now?

Will you plan to take some profit from the multi-baggers like Datasonic, Prestariang and Pintaras Jaya; and buy more on the laggard like Tien Wah and Haio?

Note: I have make some corrections on this version and upgrade it to v1.11. Please refer http://intelligentinvestor8.blogspot.com/2014/06/dcf-analysis-excel-template-v111-to.html for details.

Ayam tua, i think i shouldn't be too difficult to understand the DCF and perform the calculation. The excel help to automate most of the calculations. But, the difficult part is how to estimate the growth and I believe no one can get a right estimation. And, this is the real challenge.

Hi screwdriver,

If you want to perform valuation from the future, give DCF a try - http://intelligentinvestor8.blogspot.com/2014/06/discounted-cash-flow-dcf-analysis-excel.html

Hi GenghisHoe, I just comments based on screwdriver's calculation. I was suprised by the 60% ROE.

HOMERITZ ROE and ROCE is 60% and 51% respectively and this is a very high number. Do check why it drop to 42.85 and 31.98 on year 2010 and further drop to 21.85 and 16.46 on year 2013. Do a DuPont analysis to check out where the number come from. And, check out who is the culprit.

For EPS and FCF per share, I think there is no point to compare both of them as they have different NOSH. I prefer to compare Net Profit or FCF as a whole, or alternately we can compare P/E or P/FCF to check which company is a cheaper buy. In my view, I prefer the EV\EBIT instead.

You can refer to my writeup on http://intelligentinvestor8.blogspot.com/2014/06/financial-statement-analysts-template.html

Hi All,

Thanks for the compliment.

Please get the latest excel template (v1.11) - http://intelligentinvestor8.blogspot.com/2014/06/dcf-analysis-excel-template-v111-to.html

Hi Linda Hui,

You need to key in data in purple cell for general, stock price, and finance.

You only have to override the IRR if you do not want to use the default value of 12%

If you invest in a company, do you expect the company generate money to you? Or, you expect you have to pump in money to the company from time to time?

http://intelligentinvestor8.blogspot.com/2014/06/cash-flow-analysis-lonbisc.html

And one more thing, some reader was asking who is Mr Chong and how to approach him. Mr. Chong is kcchongnz in i3investor

He can be contacted at ckc13invest@gmail.com

If you are interest to learn the value investing, do approach Mr. Chong. He is definitely a good teacher.

Hi calvintaneng,

Your suggestion sound interesting and I take a quick look on MULPHA's financial result - http://www.klse.my/stock/result/quarter/3905.jsp#stockDetailDiv

It might be a good asset play candidate which we can evaluate it based on Graham Net Net strategy.

And based on graham, Investor have to weeding out the bad one and look for a business that is stable so that operating losses don’t eat away the existing cash and other components of Net Net Working Capital.

There are two possibles reasons why a Net Net may fail:-
- Changing intrinsic value - based on development of business e.g. loss money & reduce it working capital
- Market behaviour - stock price not necessary follow to the value that analyst place on it.

What worry me is the company is posting a negative earning for pass few years and it might eventually reduce it asset value.

Owing to this, Graham suggested to filter net net based on following criteria
- “Reasonably satisfactory” earnings record and prospects: Companies that are losing money or have an erratic earnings history are likely to see their intrinsic value decline, making them less undervalued or potentially overvalued.
- “Sound financial condition”: As a test for financial strength, Graham suggests looking for companies with total stockholder’s equity (common and preferred equity) greater than the total of current liabilities and long-term debt.
- Positive operating cash flow for T4Q: To prevent companies liquidate assets to meet its obligations
- Prevent Perennial net nets: companies that are stuck trading below their NCAV.


What's your view on MULPHA based on above criteria? Do you think MULPHA able to pass the filtering from Graham?

Cold Eye mentioned that Stock investment strategies can be divided into 上策, 中策, and 下策. If I understand correctly, he categorized buy and hold strategy on good company as 上策, while active trading strategy in a cyclical business as 中策.

Below is his original content where I copied from
http://klse.i3investor.com/blogs/coldeyedsharing/16971.jsp
------------------------------------------

股市投资策略可分三等

上策

低价购买好股，长期持有，只要公司盈利不断上升，就不卖。

大马甚至全球的富豪，都是这样成就的。

中策

股票价值被严重低估时，买进好股，中长期持有，等到牛市到来，股值被严重高估时抛不出，按兵不动，等到股价回跌至被低估水平时再买回来，而且以高价卖出时所得的资金，全部买回同一只股票，反复这样做，你所拥有该股的数额越来越多，而每股成本越来越低，回酬越来越高，这样做可以致富。

下策

在股市中不分股票好坏，只看价格波动，低买高卖，抢进杀出，往往搞到茶饭不思，晚上失眠，最后焦头烂额。这是下策，下下之策！以此法在股市赚到钱的，少之又少！



散户们，能不能在股市赚钱，其实大部份决定于你本身的做法，并不是决定于外界的条件是否有利，你们的命运其实是操在你们自己手中，而不是操在别人手中，所以，停止怨天尤人吧！



千金易得，好股难求。买到好股，要懂得珍惜，不要有蝇头小利就迫不急待地卖掉，因为往往卖掉后就没法再以原价买回，以后就失去分享有关公司的成长的机会，太可惜了。

至于股价的波动，那是股市的正常现象，不必过于担心。只要公司盈利不断成长，你的股票的价值就会持续上升，短赚不如长赚。

细水长流胜过易涨易退的山溪水！好股难求需珍惜啊！

Hi Mr Koon,

Refer to your statement "I said that no share could continuously to go up or come down for whatever reasons and we must take advantage of this phenomenon to make money.", I think it might not applicable to all shares. It might be true for JTIASA where the plantation is a cyclical business.

But how above for the companies that able to expand it business continuously?
Mr. Market might make some correction on the share price on temporary, but like what buffett say "In the short run, the market is a voting machine, but in the long run it is a weighing machine." Let's use PBBANK or NESTLE for example, there are companies with strong histories of profitability and the stock price is following it business growth.

For the company like PBBANK or NESTLE, is it better for us to use a buy and hold strategy compare to active trading strategy? If we sell half of the share after the price go up (say 30%), then when is the good time to buy back? What if the share continue go up (say another 30%) after I sale? Will I miss a chance to invest in a good company?

Just like what cold eye say "低价购买好股，长期持有，只要公司盈利不断上升，就不卖。" on his post "好股难求需珍惜" http://klse.i3investor.com/blogs/coldeyedsharing/16971.jsp

Hi duitKWSPkita,

I am just telling you the fact.

Hi duitKWSPkita,

Thanks for your compliment. Please take note that all credits shall belongs to Mr. Chong (kcchongnz)

Hi Cweed,

Yes. History is past. But it is not dead.

"In the business world, the rearview mirror is always clearer than the windshield." - Warren Buffet

I believe you can make more money if you able to hit the right stocks with great potential. And, you might have a higher CAGR target than me. But, there is a risk come along with it. It need a great discipline to cut loss if the trend is against you.

Hi All,

Welcome.

Do give it a try and hope you can benefits from the template.

It will be grateful if you can share your homework and provide the feedback to help to improve the template.

Hi funitec,

I would suggest your share us your study \ homework. And then we can understand more.

I believe we can judge a company based on its pass records. Owing to this, I calculated the intrinsic value base on its financial result and buy it when there is a great margin of safety.

And, I have no idea how to spot the trend. And I think it is very difficult to perform a right estimation or forecast.

I believe in Warren Buffett and Howard Marks's statements.

"In the business world, the rearview mirror is always clearer than the windshield." - Warren Buffett

"In both economic forecasting and investment management, it's worth noting that there's usually someone who gets it exactly right... but it's rarely the same person twice." - Howard Marks

Hi Coolio,

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

Hi NOBY,

One more thing, look at the part of the video when they discuss about the cut loss.

I tend to support Emily for not cutting loss in view of his stock pick criteria. And, if I were her I will buy more (if I have the capital) when price come down instead of cut loss.

If I choose a relatively young and small companies, then I might need to cut loss if price drop drastically.

Let's take NESTLE as example. If i buy at 63.50 now, I definitely have to buy more when price come to 50 or 40.

Please let me know what's your view.

Hi tssl74,

Nestle is definitely a good companies
- It is a company with strong histories of profitability
- The company generate enough operating cash flow to cover its operations, and in another meaning it provide the management a lot of free cash flow.
- Owing to this, NESTLE is also company with strong histories of dividend payout.
- And, NESTLE is definitely a franchise business with moat (check the profit margin and you will know).

Buy, does the current price is cheap? This is definitely depends on individual. I will suggest you to do an exercise do check out NESTLE current Margic Formula Earning Yield and compare it with its historical yield.
(Refer to http://intelligentinvestor8.blogspot.com/2014/05/magic-formula-joel-greenblatt.html)

And, if you decide to buy NESTLE at 63.50. Do ask yourself what will you do if the price hit 60, 55, or 50?

I hope above answer can help you. And, do share with us your homework and we can learn together.

Hi NOBY,

I alway believe risk and reward is a package that come together.

The chance for big cap to survive in an economic downturn is higher than a small cap.

We can choose it based on our own risk appetite. And, we have to be sure what is your goal? And, what is the CAGR that we are target for?

http://intelligentinvestor8.blogspot.com/2014/06/five-habits-of-highly-successful.html

This is an interesting video. I have jot down some notes in my blog. http://intelligentinvestor8.blogspot.com/2014/06/buying-good-companies-when-price-is.html

Hi NOBY,

Ok. I get you. I have the same view too.

Hi NOBY,

How you know there is only 2 weeks to go?

Based on the original circular on 15 Jan, it estimated the exercise should be completed by end of Q3.

you are welcome.

I am not a sifu. All credits belongs to Mr. Chong (kcchongnz)

welcome.

but do make sure you understand where the number come from. The template just help to reduce the time to compile the ratio, but investor need to understand it to make a informed decision. Accounting knowledge is the basic and it is the language of business - http://intelligentinvestor8.blogspot.com/2014/06/five-habits-of-highly-successful_6.html

you can study the link I put on the blog or join Mr Chong's online class if you wish to learn more on the value investing.

Mr Chong, thanks for the input.

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

hi emperor, all credit goes to kcchongnz. I am following his lecture to produce this writeup.

Graham original version of NNWC is NNWC = Cash and short-term investments + (0.75 x accounts receivable) + (0.5 x inventory) - total liabilities

You may refer to http://intelligentinvestor8.blogspot.com/2014/05/valuation-graham-net-net-negative.html for details.

For INSAS, I have taken some investment fron non current assets because I think it is liquid and shall able to convert to >= 100% of equivalent cash.

Refer to Mr Chong reply on the above, "I just like to add that the value of its associate companies is taken as the book value of just 134m as its balance sheet as at 31st March 2014. At RM2.77 on 6th June 2014 and its 36.44% holding in Inari alone is worth a market value of 500m, or a difference in value of 54 sen per Insas share. What about its 20% stake in Gleneagles Medical Center SB and 43.4% Melium Group. What are their market value?"

I believe it is very conservative for us to take in 100% of the investment value. Based on the market price, it should worth more than what it record on the book and this provide us a huge margin of safety.

But, bear in mind that valuation is more an art than science. And, there is no right or wrong. We have to do our own judgement and make the call.

hi emperor, total investment is derrived from below figure

Investment Properties = 157,638
Associate Companies = 134,186
Investment 116,092 + 29,980 = 146,072
Total Investment = 157,638 + 134,186 + 146,072 = 437,896

All the figure was picked up from the latest quarter result - http://www.klse.my/financial/quarterResult/154014.jsp

hi sephiroth, the link should be http://www.klse.my/financial/quarterResult/153271.jsp

hi sephiroth, why not you give a try and share your result with us?

You can refer to http://intelligentinvestor8.blogspot.com/2014/05/valuation-graham-net-net-negative.html or this article for the methods.

And, you need one more thing - the latest result from BRIGHT. And, here you go http://www.klse.my/stock/quarterResult/9938.jsp#stockDetailDiv

Which companies in bursa can append 1 more 0 on the cost of goods? It will translate to a gross porfit margin of 90%+. If a company able to append 2 more 0 on COGS, the profit margin will be come 99%+.

This companies should be a franchise with strong moat.

Hi Heng611,

To make my idea more precise, the main purpose is "Buy companies with strong histories of profitability and with a dominant business franchise in a relative cheap price (at a discount to intrinsic value). "

Yes. It is not based on latest quarter but it is based on FY end. I will only go in to more detail later.

Please take note that "This is not the final list yet as a thorough analysis need to be carried out to further examine the companies in the list."

Hi Heng611,

Please don't get me wrong. I am saying to buy a good companies in a relative cheap price. But not a ordinary company.

And, I think your analogy is not right. Maybe you can think that to buy a shop in klcc with good business in a relative cheap price. This should be what a value investor target for.

Hi Foresight123 , thanks for highlighthing.

Yes. I aware of that. NOBY did highlight to me on his earlier comment. Some of the companies might change NOSH due to corporate exercise and it is not tally with the NOSH on Financial Year End.

I will take note on this and will collect the latest data from quarter report when perform thorough analysis.

P/E = Price / EPS

"Growth creates value only when it takes place within the limits of a strong and sustainable company franchise, and these are rare. Second, not all growth - even growth that is worth something - can be appraised with enough precision to permit an accurate valuation." - Bruce Greenwald