Posted by kcchongnz > 2013-07-24 16:07 | Report Abuse

Hohoho, I have already listed down all the available strategies for you, and offered to help you. But you still want to ask from the ghost (oop, why I talked about the same person here?).

You are like in a golf competition with me. Every time I hit the par 4 green in two, par 5 green in 3, and you struggling from hazard to hazard, then bunker to bunker. 10 strokes also could reach the green. Still say you beat me. sigh, what to say?

Posted by kcchongnz > 2013-07-24 16:10 | Report Abuse

Some more curi curi improving your line. And have balls drop from your leaky pocket when couldn't find your golf ball.

Posted by kcchongnz > 2013-07-24 16:11 | Report Abuse

And when confronted, "I didn't i didn't. You did, you did"

Posted by kcchongnz > 2013-07-24 17:46 | Report Abuse

Hey Tan KW, where have you been? By the way, thank you many much for putting up my portfolio on 21/1/2013 in i3. At least now I have proof that investing basing on fundamentals is not bad after all as claimed by two fellows today. You know ah they have been harping and harping the whole day today.

38% total return in 6 months compared of about 10% of the broad market really not bad eh? Please don't blame me for lohso or chieng-he. You know I got to reconfirm with you here again as I was ridiculed so much about fundamental analysis that I am like lost confidence in myself already oh.

Hey Tan KW, you have a portfolio of this guy iafx or not? Just curious and I really want to compare with his lei to see if his strategy of "following the ghost" is a better strategy or not.

Posted by winman 1 > 2013-07-24 21:17 | Report Abuse

dear kcchongnz, i am winman 1 and those day without 1, now only with 1 hope change of luck happen soon with the 1, soon i think winman 1 no more appropriate simple no win lol. please advise its masteel worth holding for long term

Posted by kcchongnz > 2013-07-25 19:28 | Report Abuse

Masteel anyone? Not me.

Posted by winman 1 > Jul 24, 2013 09:17 PM | Report Abuse
dear kcchongnz, i am winman 1 and those day without 1, now only with 1 hope change of luck happen soon with the 1, soon i think winman 1 no more appropriate simple no win lol. please advise its masteel worth holding for long term

winman 1, no sure what you talk. But here is my answer to your question.

I have phobia investing in steel company. It is highly subjected to economic and construction cycle. It requires hell lot of capital outlay. Not my cup of tea. That is what I always think about steel company.

Looking at Masteel, I can't find any difference. Its net margin is very thin at 1.8% for the last two years. So even with huge leverage, having a total debt of half of its equity, it still can't show a decent return of equity. ROE is bad at only 4.5%. Do you ant to put up a capital to do a business and at the end of the year gives you 4.5%, with so much headache and risk?

Worst, though you make some profit, there is no money to withdraw from your business, because most if not all the earnings have to be dumped back to the business to upgrade plant and machinery, buy new ones etc.

So Masteel is not a good company to invest in for long term. But for trading, especially now I used to hear steel industry is on the road to recovery, I am not sure about that.

Even its price now at 1.14 is not considered as cheap for me as for a company like this, PE of 12 is too high. Price-to-book value ok lah at 0.5. But the quality of the assets mostly in PPE, inventories and receivables are not good quality stuff.

If you think of dividend, hack no. Masteel has no capacity to give good dividend as it has no free cash flow. Just give you one sen for the sake of maintaining a dividend giving record.

Posted by Ooi Teik Bee > 2013-07-25 19:50 | Report Abuse

Dear winman 1

It is not a recommendation to buy, I just show you the Intrinsic value of this stock. I prefer warrant more than the mother share. Please note that I am not here to con anyone inclusive of old woman funeral money as claimed by mentally retarded member here.

Technical chart is looking good because the price is at all time high (current). Please note that this company got the LRT project in Johore without going through tender. The price here is not inclusive of the new LRT project earning. FYI, I had bought the Warrant share this week. Final decision is yours. Please do not blame me.

Masteel IV Calculation

Total Net Profit Years 9/10

Total Positive Operating Cash flow Years 7/9

Total Dividend Payout Years 8/10

Total Positive free Cash flow Year 3/9
27/38
Growth%
10 Years Average Turn Over 686328
Latest 4 quarters 1302310 89.75%

10 Years Average Net Profit 31199
Latest 4 quarters 32311 3.56%

2011 2012 2013 Growth%
EPS (Cent) 11.56 11.51 14.82 28.76%
PER 9.69 9.73 7.56 22.33%
ROE 4.87 4.63 6.10 31.75%
NTA 2.37 2.41 2.43 0.83%
Dividend 1.0 1.5

2011 2012 2013
Net Profit 24351 24346 32311
equity 499859 525875 529427
ROE 4.87% 4.63% 6.10%

Price CAGR % (Buy and Hold)
Average Return History 1.66%
3 yrs Return 7.56%

Method 1
EPS 0.15
g 10.00
Y 7.0
IV= (EPS*(8.5+1.5g)*4.4)/Y 2.19
Current price 1.12
Margin of Safety 48.84%
Potential gain 95.46%

Method 2
Discounted Cash Flows Calculator
Discount rate 12.00%
EPS 0.15
Earning expected to grow (annually) 7.7
for the next (? Years) 3.0
before leveling off to an annual growth 3.00
Calculate Stock Value per share 2.06
Current price 1.12
Margin of Safety 45.63%
Potential gain 83.93%

Method 3
ROE 6.10%
Rr 8.00%
NTA 2.43
IV= ROE/ Rr*NTA 1.85
Current Price 1.12
Margin of Safety 39.55%
Potential gain 65.44%

Method 4
(22.5*EPS*Book value per share)^0.5
EPS 0.15
Total equity 529427
Number of shares 217979
(22.5*EPS*Total Equity/share)^0.5 2.85
Current price 1.12
Margin of Safety 60.64%
Potential gain 154.09%


Warrant


Masteel-WA
Expiration date 28/10/2015
Exercise price 0.67
Price of Mother share (Pantech) 1.12
Intrinsic value of WC 0.45
Actual price of WC 0.525
Premium or Discount 6.70
Gearing 2.1

Conclusion
If the price of Masteel is 1.85, the price of Masteel-WA should be (1.85 - 0.67) = 1.18.
If it is trading at 20% premium, the price of Masteel-WA should be (1.18*1.2) = 1.42.
Potential gain = (1.42 - 0.525)/0.525*100 = 170%.

Thank you.
Ooi

Posted by yungshen1 > 2013-07-25 20:16 | Report Abuse

Ooi how about iv knm caculations.

Posted by Ooi Teik Bee > 2013-07-25 21:57 | Report Abuse

Dear yungshen,

Please note that KNM cannot even passed my first test, no point to do IV calculation for this stock. I want to see there is a strong growth in latest quarter earning, then I will do this calculation.

Please review this link.

http://www.malaysiastock.biz/Corporate-Infomation.aspx?type=A&value=K&securityCode=7164

Thank you.
Ooi

Posted by ipomember > 2013-07-25 22:38 | Report Abuse

Dear ooi, please be noted that this method of calculation IV has its fault and drawbacks, it shouldn't be just calculated from what you have.The quality of the inputs are very important otherwise what you get is far away from what might actually be.

Posted by Ooi Teik Bee > 2013-07-25 23:09 | Report Abuse

Dear ipomember,

I use technical to enter trade, I do not use FA to enter trade. I check FA only very brief to ensure I do not buy a losing money stock. I check only on surface, I emphasize on growth. I am not in any position to do a complicated one. It is not my intention to do a detail and a complicated one. I want it to be as simple as possible.

I am very satisfied with my trading result after I implement this method of screening. I may change if I suffer a major setback. I am more interested in market trend plus a simple FA.

Thank you for your feedback.

Best regards always,
Ooi

Posted by heeroo > 2013-07-25 23:20 | Report Abuse

Dear Mr Ooi,

What about MBSB? Can share your view about this company.
Thanks.

Posted by Ooi Teik Bee > 2013-07-25 23:26 | Report Abuse

Dear heeroo,

I am very sorry, I cannot help you because this stock is not in my watchlist. It is time consuming. I do not mind share here if the stock you requested is in my watchlist.

Thank you.
Ooi

Posted by hippo > 2013-07-25 23:47 | Report Abuse

Dear Ooi, can you share your watchlist ? Appreciate your view. Thanks

Posted by kcchongnz > 2013-07-26 08:49 | Report Abuse

It is very important to understand the inputs into a formula to calculate the intrinsic value of a stock. Take for example, the Graham growth model which he used in 1974, some 40 years ago.

IV=(EPS*(8.5+2g)*4.4)/Y is the Graham growth model to estimate the intrinsic value of a stock.

IV is the intrinsic value of a stock
EPS is earnings per share. Use normalized EPS as much as possible.
8.5 is the PE ratio Graham willing to pay for a stock without growth.
2g is the weight given to a growth company, g is the growth rate.
Y is the present long-term bond rate

The input of EPS and g is very important for this formula. Graham mentioned that the EPS has to be normalized. One just can’t input last year’s EPS for accompany with volatile earnings. This is especially true for industry like construction (that includes steel ), commodities, etc. Hence an average margin, or earnings for 5-7 years should be prudently applied. Furthermore, with so much financial shenanigans, one has to really understand what ‘earnings” is used as it frequently include one-off items etc.

This formula also put too much weigh on growth rate to get the intrinsic value of a stock. Imagine a company earns 10 sen per share but with an expected growth rate of 15%, and using Y as 5% would have an IV of 3.40 compared to just 1.63 if the growth rate is 5%. It is more than double for a growth of 15% than 5%! Graham, at his time very rarely have such growth rate for companies and hence he did not foresee this problem in his formula.

So I tend to think the formula would be more useful to check whether the share price is too high, or too much expectation is built on the company, rather than using it blindly to find the intrinsic value of a stock.

Now let’s come back to Ooi’s calculation of the intrinsic value of Masteel. I append herewith its five years financial performance as extracted from its 2012 annual report.

Year 2008 2009 2010 2011 2012 Average CAGR
Revenue, 000 881224 687263 1004786 1253365 1312189 1027765 10.5%
Net profit 85730 -8542 29997 248998 24902 76217 -26.6%
EPS, sen 40.74 -4.16 13.58 11.56 11.51 14.65 -27.1%

My question is does it appear that Masteel’s earnings is likely to grow at 10% for the next 5 years?

Now in your method 3 using ROE, i.e. IV=ROE/Rr*NTA

This method is best suited for companies with their assets and liabilities marked to market, such as banks, insurance companies, closed-end funds, investment companies etc because the NTA is very closed to the realizable values. For others like steel companies, a lot of their assets are tied up in PPE, inventories which are unlikely to be closed to the realizable value, or market value.

My questions are:
1) I got a ROE of only 4.5% compared to your 6.1%, a huge difference in intrinsic value calculation if you look at the formula. I don’t know how did you obtain yours.
2) Masteel is highly geared with total debts more than half of its equity. It’s operating efficiencies are poor as evidenced from its poor ROE (4.5%) and ROIC (2.7%), way below its costs of capitals. It seldom has free cash flow. So for me I would require a minimum return of 15% investing in such a high risk company. Your 8% required return used in your formula may be a bit too liberal. Do you agree?

This post is done not with the intention of criticising your methodologies. Neither do I want to argue with you. I don’t need another enemy in i3, do I?. It is for sharing and discussion, and learning maybe. It is just to tell some others that there are limitations of using these valuation methods, many limitations indeed. In fact all valuation methods have limitations. It may also protect you from some people using the methods and lose money. Some nuts may accuse you why Maseetl still stays at 1.14 while you said it is worth 2.20? It has happen many times before, haven’t it?

Posted by Ooi Teik Bee > 2013-07-26 08:52 |

Post removed.Why?

Posted by Ooi Teik Bee > 2013-07-26 09:35 | Report Abuse

Posted by optimusrich > Jun 28, 2013 12:29 PM | Report Abuse

this one good sifu. stock make money. talk also make sense...

Posted by cheebai > Jun 27, 2013 10:16 PM | Report Abuse

if i must choose a person to learn bursa stock mkt from this forum, out of the so many sifus who conduct classes or recruit forumner into their own blog. i would anytime pick otb. bcos his approach is the most practical, less nonsense, and faster way of making huge money in bursa.
a remisier who survive 20yrs of stock mkt is rare. the experience and the market instinct is way ahead of those greenhorn. who r good at referring to text books.

Dear Alex,
Please do not contradict yourself. Leave me in peace. Alex ... Please.

Thank you.
Ooi

Posted by Ooi Teik Bee > 2013-07-26 10:59 |

Post removed.Why?

Posted by kcchongnz > 2013-07-26 11:12 | Report Abuse

Ooi,

Ok,ok at least you have clarified that you are actually using technical analysis.

And at least I have clarified the limitations to use the Graham growth model and the ROE method of finding intrinsic value of a stock. Because you did say you learn them from me.

And also others should be thankful to Ooi for sharing his tips.

Cheers

Posted by Ooi Teik Bee > 2013-07-26 11:46 |

Post removed.Why?

Posted by Steve Jub > 2013-07-26 11:55 | Report Abuse

mr ooi, since you are TA, how come you able to calculate the stock intrinsic value using fundamental like ROE, free cash flow and etc ? I tot TA is based on charting (price movement, candlestick, volume)?

one thing i don't agree with your statement is "Please note that KLSE is in bull market now, the stock price will go up even the fundamental is not that good." . If fundamental is not good, even during bull market also might be the same.

Posted by Ooi Teik Bee > 2013-07-26 12:09 |

Post removed.Why?

Posted by Steve Jub > 2013-07-26 12:17 | Report Abuse

thanks for the info mr ooi.

Posted by Ooi Teik Bee > 2013-07-26 12:20 | Report Abuse

Posted by Fat Cat Tim Buddy > Jul 20, 2013 04:47 PM | Report Abuse
SO + hai = success formula.
Old tea bag logic : as long as got sohai buy higher from me, i make money.
and he is right, but you also can make money by robbing bank, snatching handbag, con old lady funereal money...

Posted by Ooi Teik Bee > Jul 23, 2013 09:09 PM | Report Abuse X

The one made the most money in stock market is always quiet, the one talk rock or talk cock, cannot afford to buy many stocks is making the most noise because he is retarded mentally. He gets so jealous others made a lot of money.

Hello,

We bought Naim at 1.93, we sold at 3.85.
We bought Huayang at 1.65, we sold at 2.91.
We bought Alam at 0.81, we sold at 1.25.
We bought Daiboci at 2.60, we sold at 3.65.
We bought Kimlun at 1.42, we sold at 2.13.
We bought KHSB at 0.40, we sold at 0.80.

We bought Presbhd at 1.22, the stock price is at 2.14 now.
We bought Pantech-WA at 0.40, the stock price is at 0.68 now.

Do we need to con old lady funeral money ? Mentally retarded !!

Thank you.
Ooi

Posted by KC Loh > 2013-07-26 12:27 | Report Abuse

Relax Ooi, afterwards you get the "final ultimate" treatment from tubby! LoL

Posted by KC Loh > 2013-07-26 12:28 | Report Abuse

Later will expose him more if he gets carried away! He still hunting for tips only that tubby! LoL

Posted by beginer > 2013-07-26 12:43 | Report Abuse

Dear Bros.I have reading from your postings,
learning slowiy but steady about intrisic value
and so on..
Can share some so called hidden Gems.
My add. lim111@hotmail.com
TQ

Posted by Ooi Teik Bee > 2013-07-26 13:20 |

Post removed.Why?

Posted by Steve Jub > 2013-07-26 13:23 | Report Abuse

mr ooi, you still use t3system to get the buy or sell call?

Posted by inwest88 > 2013-07-26 13:46 | Report Abuse

Ooi, don't get upset by those who are jealous and envious of your capability. I am new to this forum, otherwise I would have made a lot of money from your input as well as from kcchongnz. Both of you are very competent in your stock analysis. Just that some people do not appreciate. I would like to attend one of your Wednesday talks one day.

Posted by jcck79 > 2013-07-26 14:04 | Report Abuse

To Ooi and Kcchongz i've read your thread for awhile both of you are real great investor and thanks again for all the info shared i've become a better investor and i did agree FA+TA = Success. Hope to have both of you shared more counter to us.

P/S: If i'm in Peninsular Malaysia i'll met you guys at whatever cost but i'm in Sarawak now =)

Posted by Steve Jub > 2013-07-26 14:07 | Report Abuse

thinking about it, will FA clash with TA? because FA is buy low and sell high, while TA is buy high, sell higher.

Posted by jcck79 > 2013-07-26 14:15 | Report Abuse

Yes sometimes FA clash with TA, if that happen i'll usually don't enter trade until both sync =P than go in for a KILL

Posted by yungshen1 > 2013-07-26 14:35 | Report Abuse

ooi i hope can learn from u about TA and FA. do u have your blog about
TA and FA

Posted by Ooi Teik Bee > 2013-07-26 14:36 | Report Abuse

Dear Steve,

I used SharesXPert system. Presently, I am the chief trainer of SharesXPert.com KL.

Previously, I worked as a trainer for T3B in China, HK and Malaysia for 3 years.

Thank you.
Ooi

Posted by Ooi Teik Bee > 2013-07-26 14:38 | Report Abuse

Dear yungshen1,

Please look at this link :
SharesXPert.com.

Thank you.
Ooi

Posted by inwest88 > 2013-07-26 14:48 | Report Abuse

Ooi, what is your position and role in SharesXPert.com. if I may ask ?

Posted by winman 1 > 2013-07-26 14:49 | Report Abuse

thanks dear kcchongnz and ooi, for all that has been said on masteel and will take advice wisely

Posted by winman 1 > 2013-07-26 14:55 | Report Abuse

ooi , wish u could post some comment on whether is it ok to invest in AAX , according to dali of MFB, its a under own stock, any entry price ah

Posted by yungshen1 > 2013-07-26 14:59 | Report Abuse

ooi i still dun understand 3 step

Posted by yungshen1 > 2013-07-26 15:06 | Report Abuse

ooi is it the right time to enter this tgoffs share now. according the chart is uptrend mode

Posted by Ooi Teik Bee > 2013-07-26 15:22 | Report Abuse

Dear yungshen1,

Please note that TA is ok for tgoff, FA is very bad. Hence I will not recommend.

Thank you.
Ooi

Posted by PureBULL . > 2013-07-26 16:03 | Report Abuse

yungshen1, Be honest, I know u loss tons of money in kan nee ma n taken to holand by lee baba.
u must see otb. he can help u for a small fee compares to the tons of ur losses.
many around in i3 should just do the same !
Be Happy Trading forever...

Posted by kcchongnz > 2013-07-26 16:27 | Report Abuse

Bursa is a jungle out there. You want to speculate and make money in Bursa? 说来容易做起来难

Easy said than done. Trading and speculation is a zero sum game. Think about who are you betting against?

Insiders, manipulators, experts chartists, institutional speculators, individual experts in technical analysis. So where to place yourselves against them?


“If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.”
― Warren Buffett

Posted by winman 1 > 2013-07-26 17:27 | Report Abuse

dear ooi, wow you had bought many stocks that had appreciated enomously, I just hope u recommend me a stock of mention calibre, should i enclose my email. I had some masteel wa

Posted by jcck79 > 2013-07-26 17:33 | Report Abuse

Posted by kcchongnz > Jul 26, 2013 04:27 PM | Report Abuse

Bursa is a jungle out there. You want to speculate and make money in Bursa? 说来容易做起来难

Easy said than done. Trading and speculation is a zero sum game. Think about who are you betting against?

Insiders, manipulators, experts chartists, institutional speculators, individual experts in technical analysis. So where to place yourselves against them?


“If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.”
― Warren Buffett

My comment:

"If you can't beat them join them" - Jeff Chong

Posted by Steve Jub > 2013-07-26 17:45 | Report Abuse

very true and well said, kcchong. it is not easy to profit from stock market esp those got insider news which give them unfair advantage some more.

Posted by Ooi Teik Bee > 2013-07-26 21:47 | Report Abuse

Posted by winman 1 > Jul 26, 2013 02:55 PM | Report Abuse

ooi , wish u could post some comment on whether is it ok to invest in AAX , according to dali of MFB, its a under own stock, any entry price ah

Dear winman 1,

It is a down trending stock, how good the FA is, I will not buy.

Thank you.
Ooi

Posted by yungshen1 > 2013-07-26 22:26 | Report Abuse

dear ooi
how about knm
ROE
NTA
EPS
DPS
REVENUE
NET PROFIT
DEBT RATIO
CASH FLOW

Posted by yungshen1 > 2013-07-26 22:29 | Report Abuse

dear ooi
may i ask u .knm can invest for long term.