Posted by Desa20201956 > 2016-01-03 17:39 | Report Abuse

all sounds nice ....
but do they say one thing do another thing.

investments by who knows who?

Posted by livingston > 2016-01-03 17:52 | Report Abuse

Desa,

Agree on your point. Some owners do not honor/mismanage their company. When they want your monies, presentation will be done very well. When they get your monies, the table turned.

Generally I will use a mixture of 3 elements before deciding:
i. Fundamentals Analysis (health and pricing analysis).
ii. The Listed Company's Management Team (background, success stories and trustworthiness)
ii. Theme Play (are they on the right rotational play & Fund Manager's Radar)

If the Management have bad track record/cook their books and share price/inconsistent with their promises, I will avoid them irregardless on how good their Fundamentals to me.

Thank you for pointing out.

Posted by JT Yeo > 2016-01-03 18:59 | Report Abuse

Hi Livingston, just seeking your advise.

As you are aware companies listed in bursa isnt like those on NYSE or Nasdaq, the disclosure is crap. You can add the information on quarter and annual report up and all you have is probably 2-3 pages of useful information.

All the solid information lies in the income statement, balance sheet and cash flow statement. Besides that if you really wants to get deeper like how do they win tender, target customers etc, it gets messy from there. Any advice how you dig those info?

Posted by livingston > 2016-01-03 20:39 | Report Abuse

Hi Yeo,

There is no way retailers can know how the company submit the tender, price, margin etc. Even you are a staff with the company you may not be aware on the tender details. Only a handful of Senior Management Staffs have the information. If you are talking about Research Analyst having more information, this argument is valid . The information given to analyst is from Analysts Briefing or Company Visitation. Those info given also on the surface manner and Analysts have to come out with their own models to forecast the P&L.

Posted by livingston > 2016-01-03 20:54 | Report Abuse

To add on on your details stated, from the Annual Report we see few more details to gauge the efficiency of the Management Team. Just to share some ideas you may use to screen through the companies you are following:

1. Chairman / MD's statement - If the statement is in contrast of what he says (year after year, he has no ability and sincerity to honor his words - RED FLAG)

2. Remuneration to the Directors - If the remunerations goes up much faster than the company's P&L, he is more interested to rewards himself than the shareholders -RED FLAG

3. ESOS & Placement of Shares - a lopsided ESOS quantity and exercise price. The Management rewarding themselves more than their effort given - RED FLAG

4. A higher profit recorded but worse of off cash flow / free cash flow and higher account receivable. Know how to do business but don't know how to collect money and later will appear as write off - RED FLAG

5. Active Right Issues with Free Warrants and Placement of Shares - Always raise but EPS, ROI, ROE does not move up in tandem - RED FLAG

6. Management appointed involved in unhealthy activities before; Bad track record ,Cook the share price, Cook the book, Problems with Authorities and Solicitors and Regulators - RED FLAG


There are many others to look at in the Annual Report but those are the serious one. In a nut shell, look at the Management Team and their track record before proceeding further. If they are tainted before for bad reasons there will be a chance they will do it again.

Posted by JT Yeo > 2016-01-04 04:55 | Report Abuse

yea make sense, we can only try to make full use with the information we've got on hand and make decisions. Thanks for that.

Posted by livingston > 2016-01-06 23:52 | Report Abuse

I believe as long as one is willing to learn the right way to analyze stocks and market, he or she should be able to earn some decent monies in the stock market.