The above example lacks certain pertinent info such as:
- What is the Total Equity capital of the company
- What is the Total Debt of the company prior to taking on more Debt
- What is the interest rate for the company original debt and the
incremental debt
- How is the Debt being structured
- What is the debt rating for that company

Please do not under-estimate Mr Market as Mr Market is very wise to value the market price of a company. Mr Market will look into Total Debt vs Equity , ascertain whether the Total Debt/Equity mix is within comfortable confidence level or within comfortable margin of safety for the market where the incremental debt and the consequent incremental interest rate expense will not result in significant detrimental effect onto its operational earnings and increase significantly the financial risk of significant impairment to the company earnings or otherwise.

If the company continues to take on additional but significant incremental debt to obtain diminishing marginal returns to boost its EPS, Mr Market will know that the overall riskiness to the company financial health had been increased beyond normal confidence level and Mr Market will deploy its resources accordingly to value a new price for the Company appropriately in relation the potentiality of the additional but significant risk of impairing the financial health of that particular company.

Mr Market will always have its way to downgrade the earnings quality and this consequently will affect the share price value of the company even if EPS for the company increases marginally.

Boleh Export BRAIN POWER
TAK BOLEH EXPORT PROTON BIG BIG!!

Which country receives BIG LOVE from Rich & Poor Countries at same time?

Why u never complain all these while?
why u never complain, protest for past 30 odd years?
Why u keep silent, never protest?
Your Silence is agreeing that PROTON is the Cheapest car in Malaysia
Why u complain now?

Cheap car cannot make
Now want to make QUALITY CAR
QUALITY Car is Expensive
But Good for You Malaysian Car consumer
Buy Expensive means Buy Good Quality
Good Quality PROTON is GOOD FOR YOU

Malaysia can successfully export Brain power
Ketaunan PROTON cannot successfully export PROTON OVERSEAS
Malaysia boleh Export brain power Overseas
PROTON Tak Boleh Export Overseas with Success!!

Ketuanan PROTON is Good for your pocket lah
Ketuanan PROTON is to help u relax your brain power lah
No need to kelam kabut in deciding lah
No need to complain so much on Ketuanan PROTON lah
PROTON is your one and only one choice lah
Buying PROTON is good for you lah.

Protection for PROTON is very Good for Malaysian Car Consumer
You don't need many choices my dear Malaysian car consumer
One choice is good enough for you
No need to kelam kabut in deciding
Better use your brain power to other more important matters
Malaysia needs your brain power in more important matters
Malaysian still need your brain power to achieve wawasan 2020 lah

PROTON saves you valuable time in deciding with too many choices
PROTON is also good for your pocket
Your Only one Choice
Your one and only PROTON
Buying PROTON is Good for you lah
Just BUY PROTON lah No need to think too much lah
Buying PROTON is good for you lah

Malaysia became Independent 57 years already
Malaysia still going Strong
PROTON was conceived by Tun Dr Mahathir in 1979
Now he becomes Chairman
PROTON was born on 7 May 1983
PROTON is now 31 years old
Why is PROTON still not independent but Malaysia already independent?
Why PROTON still require PROTECTION in Malaysia?
Why PROTON still need Tax Payers Money & Govt protection to barely survive?

Malaysia sells very well Petroleum Oil, Palm Oil, electrical & electronic goods etc to international markets but NOT PROTON
KIA, HYUNDAI are successful brands in USA
PROTON still not successful brand in USA
Why PROTON sell reasonably well in Malaysia but not to international markets?

Question 1:Why is PROTON not successful in the major international car markets?

Question 2:What are the root causal factors that PROTON is not successful in international car markets?

Question 3: What are the root causal factors that PROTON is selling more in Malaysia but not Overseas?

Question 4:What are the root causal factors that PROTON still require Taxpayers money for supports?

FINAL QUESTION:Is PROTON economically COMPETENT or economically INCOMPETENT?

In a few months time O& G theme play will become "NOT SO HOT" whereas GST Theme play will become "HOT HOT HOT"
Censoft will transform to CenStrong
Time now to get into Bapok GST counter while u can still get its "Bapokness"
Before Bapok GST counters transform to Hercules HAHAHAHA

That is precisely correct sir, UNDOUBTEDLY!! HAHAHAHA

Don't worry too much stockoperator..I am having hell of a jolly good time interacting here with the forumers and learning & understanding their thoughts/ideas on value investment! It is a great sharing experience!!

Stockoperator,

I am merely quoting "understand value investing in 5 min" from Panlai investor lah as she really panlai to understand value investing in 5 mins lah. HAHAHAHA

In estimating the Intrinsic Value, it is better to be more or less correct rather than 100% precisely wrong.

The conclusion from the above statement is that the determination of Intrinsic Value of a stock is just an Artful Estimate of the Intrinsic Value as there are several methodologies to determine intrinsic value with each methodology giving different values.

Besides developing competency in the artful estimate of the Intrinsic Value one must also develop high competency in EQ and diligently assess whether the controlling shareholders want to prosper himself/herself ONLY or also want to prosper the MINORITY Shareholders too.

So don't be too hasty in buying heavily or "SAPU" an intrinsically valued stock with high margin of safety without checking first about "the generosity and care of the controlling shareholders towards the Minority Shareholders."

This is second lesson in Value Investing for Dummies. HAHAHAHA

Value investing also mean Taking profit before it reaches its "ESTIMATED INTRINSIC VALUE" and investing into another Stock that offers relatively higher margin of safety.

The valuation of INTRINSIC VALUE is at best an ARTFUL ESTIMATE ONLY OF THE INTRINSIC VALUE.

There is a big material difference between "Understanding Value Investing in 3 minutes" and "Trusting the Value" HAHAHAHA

Having Trusted the Value, the next question is "Does the controlling shareholder want to prosper himself/herself ONLY or prosper the minority shareholder too"

If controlling shareholder wants to prosper himself/herself ONLY, then how to make Profit after "understand value investing in 5 minutes and having trusted the Value?" HAHAHAHA

This is "Basic Value Investing lesson for Dummies". Don't worry its free of charge. HAHAHAHA

If one really want to understand the basics in "Untrustworthy Accounts ala fraudulent Accounts", CSL is an excellent case study material for the anyone who is interested.

Starters can begin to ask :
Why is Share price @ 12 cents but "CASH AT BANK" is 75 cents?
Where is evidence of CASH AT BANK?
Why borrow at higher interest rate when got huge CASH AT BANK?
Why Factory got burnt down after appointment of New External Auditor?

Fund Managers look for BIG CAPS but due to policy reasons do not look at Mid to Small caps. So there is opportunity at Mid to small caps stocks for retail investors but not necessarily big cap stocks unless the business structure changes like Tenaga for instance.

If you want to look for breakup value investing, you got to wait and hope. In that case better take pro-active steps to form alliances to take over company then break it up.

Go set up predator company and get investors to come in to join u to take over company and strip its assets!! Well I would commend you on your pro-active bias rather than wait , wait and hope .

High NTA with "Neither Dead nor Alive owners & company management"- AVOID
Reasonable or High NTA with "Pro-active owner and Company management"- BUY

Is not Growth in EPS, ROCE considered Value Investment? What drives up share price value is growth, Right?

Companies with high NTA, inconsistent EPS & ROCE growth or uncertain or negative growth, ably supported by poor/weak management, untrustworthy management, management with no idea how to create value, crooked management, lepak lepak management...what is the point of investing in these companies?

Stockraider,
I do not look at high NTA or Dividend payout. I look at Equity Capital vs Total debt first. Then go for increasing EPS growth, increasing ROCE growth where Earnings comes directly from BUSINESS Operations...

OK fraud accounting for dummies
- Tons of Cash at Bank but zero authentic proof
- Borrow money at high interest cost when got tons of money in FD earning low interest rate
- Fictitious invoices
- Fictitious claims
- Fictitious stocks
- Recycled inventories
- Inflated stock values
- Fictitious Receivables
- Receivables days increasing
- Fictitious payable
- Fictitious Expenses
- Fictitious short and long term investments
- Fictitious capital investment

What else have been missed out?? Any ideas?? This sitting down shaking legs can do lah. Why not?

I will be wary of companies with excessive gearing which exceed equity capital by 2.5 X.

Besides EPS growth , increasing ROCE is also a critical info to monitor to factor in the returns from the use of debt financing.

stockoperator,
Is Public Bank Malaysia connected in any way connected with the Public Financial Group that is listed on the HKSE?

stockraider,
FD is not inflation hedge lah. Real inflation of 8% will over time eat up your FD purchasing power lah. So the discount rate must be much higher or at least be equal to the real inflation rate lah.

huh..Why use a discount rate of 3% when the real inflation rate is already hitting 7% to 8%??

I will focus on companies that generate increasing EPS from its core business operations.

I will buy in when the share price is at the bottom or just coming off the bottom. I depend on TA for a confirmation on when to buy in. No, I shall not chase the share price of any company no matter how good the perception is.

Wow I am really impressed with the length and depth of your thoughts on Value investment but I will keep it short and sweet!!

My sole objective in investment is I want Good capital Gains over a certain period of time but certainly not eternity.

The most important criteria to realize capital gain is to look for companies which has the Prospect of INCREASING EPS Growth over a time period.

If EPS keep on increasing, I hold.
If EPS plateaus, I sell 50%
If EPS dips, I sell out completely.

Why? It is very simple. As EPS grows so will its share price. If EPS drops, its share price will also drop.

Wow I am really impressed with the length and depth of your thoughts on Value investment.

My sole objective in investment is I want Good capital Gains over a certain period of time but certainly not eternity.

The most important criteria to realize capital gain is to look for companies which has the Prospect of INCREASING EPS Growth over a time period.

Why? It is very simple. As EPS grows so will its share price.

What we need to do now as Malaysians is to rise above the current mental mindsets ,personal trivialities and suspicions, put aside the long ingrained perceived differences, feelings of hatred amongst the people arising from the practice of the Divide and Rule policies and steadfastly work together to build a better wholesome Malaysian society for everyone, our fellow citizens, our colleagues, our friends, our families, our children and our loved ones and live in a Malaysian society where we can one day truly stand tall amongst our global peers as the Malaysian society, its standard of living, its living culture, its social standing and its plentiful economic opportunities is second to none in this globalized society.

kk123,
It had been reported that Bumitama Agri has the highest potential for Revenue and Profit growth in many years ahead. Moreover Tan Sri Lee of IOI Corp owns 30% stake in Bumitama Agri. Have you considered Bumitama Agri?

After almost 30 years of existence and protection, What has PROTON got to show to all Malaysians about its real achievement in Malaysia and overseas market?

PROTON had achieved nothing to date that merits commendation and it still want more protection to survive??

Does Dr Mahathir still think that Malaysians can still be fooled by more protection for PROTON is good for you, the Malaysian consumer??

Good luck to u too wt222.

wt222,
GP is committed to sustainable forest management on 129,143 hectares of forest under its management under selective cutting approach whilst maintaining continuous forest cover and species diversity.

The valuation per hectare will most likely be based on the Net Profit per hectare. Based on recent Q1 results, GP made a net Profit of 19.96 million per 2000 hectares of timber concessions.

Assuming no change to status quo on company business operations the potential net profit for the entire concession = 129,143 hectares X 19.96 million/2000 hectares= RM 1,288 million.

Market Capitalization for GP based on last Friday's closing price = RM 107 million

Does this infer that GP Market cap for forest concession of 129,143 hectares could potentially be valued at RM 1,288 million or 12X 0.795= RM 9.54 per share??

If you do not concur with this estimate of value, please do advise and share with fellow i3 members on a more realistic approach to value 129,143 hectares of GP timber concessions.

Does anyone in this thread has the experience or network of friends who can assist in estimating a value for the 129,143 hectares of forest concessions?

wt222,
The basis of high or very low expectation of any stock in BURSA including GP is dependent on a host of factors including one's personal experience with the stock as well. Did you have any past negative experience with GP? I don't.

However as an investor I am keen to learn from you or any one here who is willing to share his/her knowledge in estimating a valuation of timber concessions on RM per hectare basis. What is the methodology that one goes about in determining an estimated value of 129,143 hectares of Timber concessions?

wt222,
As you are a very accomplished and experienced investor in investment valuation, please advise how would you value 129,143 hectares of timber concessions on RM per hectare basis?

Ben Gan,
GP subsidiaries had obtained Forest Stewardship Council ("FSC") endorsed certification on 21 April 2008 by Scientific Certification Systems ("SCS") for 108,900 hectares and another subsidiary had obtained FSC endorsed certification for its 20,243 hectares Cherul Forest Concession on 10 December 2012 that was certified by SCS Global Services.

Total forest hectares under its management = 108,900 + 20,243 = 129,143 hectares

Could you or any one here put a market value on $$$$$$$$$ per hectare basis?

Hot.T,
i3 is a great place for learning cum check and balance or rather baptism of fire and angst!! Have a good weekend too.

Hot. T, Thanks for the clarification as a gross miscalculation had been made and it had been taken off.

wt222, Appreciate your timely and incisive feedback! wow it hurts!!!

sklyte, Thanks and your point is noted.

Imemwe,
There are 1.1 billion Africans and 50% are young at or below 19 years. As Africa develops economically and become more urbanized so will the consumption of palm oil. There is the potential switch to more usage of Palm Oil as biodiesel as oil price escalates further in the future as the growing urbanized African communities will need biodiesel for their daily commuting besides using palm oil as food as well.

It is difficult to forecast the future price trends due to the multiple usage of palm oil as food and bio diesel fuel as the world population kept on urbanizing further.

Refer to note 19 in page 78 of AR 2013. The Group has unutilized tax losses of RM RM 177 million available to offset against future taxable profits and this is positive for future cashflow

Refer to note 19 in page 78 of AR 2013. The Group has unutilized tax losses of RM RM 177 million available to offset against future taxable profits and this is positive for future cashflow

Daily volume transaction had thinned down considerably since end Feb 2014 indicating selling exhaustion and very low risk of price downside. Based on govt investment plans in the offing and the consequent prospect of improving company fundamentals and Divergence of TA indicators where MACD is gradually trending upwards with price trending downward, the Reward of Investment now is higher than Risk of Investment.

Ben Gan, Concur with your investment decision. Based on the latest Q1 2014 results, I have taken a position during recent price weakness . Further position sizing will be dependent on the forthcoming Q2 report.

Looks like the GST theme play is slowly but surely gaining traction

Wow..it surged above the Ichimoku Kinko Hyo cloud!! Congrats to those who had entered below the cloud prices

Stockoperator,
Ha ha ha, I try to summarize
- Be flexible on your Intrinsic value as you are not God
- Be prepared to realize profit when there is exuberance which gives you opportunity to cash out.
- Cash out, Look for better opportunity, Go to sideline and reenter when macro conditions turn bullish again

Ha Ha Stockoperator, I m not in biz to compile a book. I m in to make good returns on my invested capital and not having to wait years to achieve that!!

Hi Stockoperator,
This is an excellent forum for exchange of ideas and ones investment philosophy or rather one's investment strategy. Every one is free to exchange their investment views whether with passion or in a subdued manner but nevertheless this does not detract us from the ultimate objective of a better understanding and a learning process for each person's investment strategy.

We must all rise above personal trivialities and look forward towards the greater benefit arising from a healthy exchange of investment ideas that will eventually lead to better returns on invested capital for everyone.