I didn't buy a lot because I'm fairly new to this company. there are others who are here longer and understand the company better that should take the credit
strong brand, strong free cashflow, good dividend, what not to like about this company? now only if they can keep their profit more consistent then sky is the limit
Free Cash Flow for FY2016 is $302.6 millions, work out to be $1.12 per share, total debts as at 31/12/2016 around $308 millions, cash on hand $171 millions. There might be some surprise for future dividend.
Share price movement is very hard to predict. Let say if Petronm earning be stable downed with yearly EPS around $0.80, then re-rating to PE around 10 is likely. However short term share price movement is unpredictable.
If you put aside external uncontrollable factor like oil price, exchange rate and refinery margin, the company is continuing growth in sale volume, keep generating cash, and most important their willing to share the profit with small shareholders
next quarter likely to remain good since retail petrol price still on strong uptrend.
I think once petron's earnings can stay consistent and clear their borrowings, market could re-rate it to around 15 times PE, slight discount to Petdag considering the size and branding
I read sumato88's comments on three major factors with interest and true enough, it translated to a great quarter for Petron so congrats to all the investors.
I wonder if we can apply the same crack spread analysis to Shell which is a strict refinery, and expect an equally explosive q4 too. And also potentially the next quarter as this spread is apparently holding and has widened since. Would appreciate if sumato88 can comment since Shell has yet to announce its results. Thanks in advance.
I think Shell will probably have good results too, but I prefer Petronm as Shell has much higher USD loan which will eat into its expanding margin when USD appreciate. Secondly, Shell only owns refinery which has a volatile earnings. What I like Petronm most is market value the co like an oil refinery even though it owns its petrol station network which is very profitable and stable biz where market gives a generous valuation, just like Petdag.
Thanks again sumato88, appreciate your valued comments. I agree that Petronm has far greater potential vs Shell. Was looking at a quick trading opportunity on Shell.
Valuation gap between Petronm and Petronas Dagang is too wide to be logical. Either one is under valued or the other over valued. Conservative case scenario is mid way and it will still be very positive for Petronm. Just have to monitor that Petronm grows into its full potential over time with increasing dividend payouts. It wasnt that long ago that Petronas Dagang was trading below RM10. Good luck.
shell is just refining. closest to Petron is PetDag. I think the difference in PE is
1. PetDag has cleared all the borrowings 2. PetDag has more petrol stations and stronger branding in Malaysia 3. PetDag has more consistent earnings
Point 1 can be solved in no time. Point 2 Petron is still working hard on it and Point 3 I hope they can achieve it. then 15-20 times PE is not a dream
Jay, agreed, point 3 is crucial...if the coming few qtr company can maintain earning, the only worry is the volatility of crude oil...I strongly believe this is a gem, matter of time other investors unearth it
and may I say last few days was the battle of informed investors and sharks who tried to press the price down and informed investors won handsomely. kudos to those who stood firm and kept everyone informed
yup...sometime you need someone support your points, in the market not all people agree with you, I also why price sudden drop, but I believe more in the business than the market price..cheer for those who hold on
Watching this sticks for a month and finally got it two days ago ..: marvelous profit by Petron ... Yee , the masses still have opinion that Petronas and shell is better fuel, branding ... so this factor can be won using the Petron loyalty cards ... but expansion still will be tough . First being a net cash company ...
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moneySIFU
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Posted by moneySIFU > 2017-02-22 17:57 | Report Abuse
Wow