Posted by kcchongnz > 2013-06-18 18:02 | Report Abuse

Does Kumpulan Fima fits the Magic Formula of value investing?

The 5-year average ROIC of Kumpulan fima is 21.3%. This is double the return of its cost of capital of about 10%. This demonstrates quantitatively Kfima is a good company.

At the close of 2.10 today, the earnings yield is 24%, twice my benchmark of 12%. So Kfima is theoretically selling at a below-average price.

Hence I would say Kfima fits the Magic Formula.

Posted by Lucky88 > 2013-06-18 18:04 | Report Abuse

though all these are just theoretical. which can be easily distorted by manipulators

Even with business finance, cooperate finance, portfolio management, trading psychology, financial economics, financial mathematics, statistical model for finance, applied mathematics in finance, business accounting ... its just numbers

Posted by kcchongnz > 2013-06-19 05:53 | Report Abuse

Fat Cat, this thread aims to find good companies trading at cheap price using Greenblatt's Magic Formula, a quantitatively approach. It is not about Kfima. I used the Kfima's example because many readers here including you have a copy. Hence you may be able to try to use it to find an investment candidate and to share with us, if you wish.

I have numerous argument with you regarding Kfima. I have my views which I have expressed extensively before. I am not going to argue with you here. Thanks for your "public non-confidence" here and your points are noted, and you may also get your Davesingh to support you here. Every point of view is welcomed.

Lucky, yeah you are right. Speculating in Patimas, Benalec, Octagen, Luster, CSL etc is more lucrative in value investing. No need to know what the business the company is doing, how they are doing, what price the share is selling. Just tikam and make money. Why waste time?

Posted by POTATO > 2013-06-19 06:10 | Report Abuse

FAT CAT REAL POTATO... ASK YOU TO CHIP IN YOUR POSITIVE OPINIONS LAH AND MAKE OUR LISTED COMPANY FOLLOWS TO THAT DIRECTION YA.

Posted by kcchongnz > 2013-06-19 13:40 | Report Abuse

How come there is no contributions for this investment strategy basing om Joel Greenblatt's Magic formula?

I have read many strategies of investing, including many academic research papers. Many of those strategies such as low P/B, low P/E, January effect, high dividend stocks, high growth stocks, stable earnings, good companies, contrarian, momentum etc, existed initially but they tend to go away when more people are aware and make use of them to invest for excess return from the market. However, this Magic Formula seems to persist in the most recent time. This I believe is its plausibility; invest in good companies which are selling cheap.

So I hope we can share information and knowledge here together. For all you know, we may be able to earn some excess return from the market from this sharing. Are you game?

Posted by kcchongnz > 2013-06-19 15:57 | Report Abuse

Let us try again here:

The key driving formulas used by Greenblatt for his Magic Formula are:
• Earnings Yield = EBIT / Enterprise Value
• Return on Capital = EBIT / (Fixed Assets + Net Working Capital)

Ebit is earnings before interest and tax

Enterprise value = market cap (no. of shares*share price)+minority interest (if any)+total debts-excess cash-other non-current assets not related to the ordinary operations such as investments, properties held for non-property company etc

Fixed asset=property, plant and equipment + biological assets (for palm oil company which has consolidated its palm oil business)

Net working capital=receivables+inventories-payable

Posted by kcchongnz > 2013-06-23 07:40 | Report Abuse

Does Coastal satisfies Greenblatt’s Magic Formula?

Coastal Contracts was one of the few stocks bashed up at the close of last Friday. It dropped 62 sen, or 30% to RM1.48! Is there something fundamentally wrong about this company?

Coastal used to be one of my most favorite stocks. If you look at its financial performance of the past, it would be easy to understand why.

Year 2012 2011 2010 2009 2008 2007 2006 2005 CAGR
Revenue 764372 719133 675053 466058 348059 291757 159288 102770 33%
Net Income 118588 190637 199951 162444 96514 69317 34017 16172 33%
Profit margin 16% 27% 30% 35% 28% 24% 21% 16%

The shipbuilder’s order book rose from about 100m a year to 764m last year since 7 years ago. That is equivalent to a CAGR of 33%. The net profit rose at the exactly similar rate from just 16m to 119m last year. The net profit margin used to be in the fabulous thirties a couple of years ago. This performance of Coastal in the past definitely will qualify it as a growth stock. However, profit margin plunged to just 16% last year. This results in a drop of its profit by 38%, though its revenue still rose by just 6%. This clearly demonstrated that an exceptional margin is not sustainable in a capitalist market where competitions would come in. This is also clearly reflected in its operating efficiencies as shown below:

Year 2012 2011 2010 2009 2008 2007 2006 2005
ROE 15.4% 31.6% 43.6% 52.7% 45.0% 46.3% 29.2% 13.9%
ROIC 18.6% 40.4% 53.6% 63.9% 63.8% 53.0% 29.9% 14.9%

Coastal used to have fantastic, unmatchable by its competitors in its ROE and ROIC in the past. What happened last year? ROIC and ROE plunged by more than half last financial year to 18.6% and 15.4% respectively. Is this the reason that the market finally waken up to this reality and throw its stocks in droves? Does it still worth investing as a value stock according to Greenblatt’s magic Formula?

Yes, that is my opinion. The return of capital, ROIC is still very good at 18.6% (>12%). At RM1.48, the enterprise value worked out to be 518m and the earnings yield

Ebit/EV=117.5/518=23% is way above 12%.

I don’t think anyone can purchase Coastal share at the beaten down price of RM1.48 come Monday on 24/6/2013. Even if you buy it at the pre-beaten price of RM2.10, its enterprise value is 880m, or an earnings yield of 14%, is still a reasonable figure to invest. It also has a high cash return (FCF/IC) of 14% (>>5%), and FCF/Revenue of 12% (>>5%).

Posted by Junglestock > 2013-06-23 08:51 | Report Abuse

http://malaysiafinance.blogspot.com/2013/06/wtf-closing-was-that.html

Posted by BC475654 > 2013-06-23 09:16 | Report Abuse

Come Monday,business as usual for the affected counters.My thought and my hope.

Posted by kcchongnz > 2013-06-23 13:30 | Report Abuse

What about CBIP? Was there a problem before it plunged 82 sen from 2.75 to 1.93?

CBIP has a huge ROIC of 24% last year, ignoring its profit from sales of plantation. So this meets Greenblatt's high return of capital.

Before the plunge on last Friday, at 2.75, it has an enterprise value of 422m. With an Ebit of 89m, earnings yield

Earnings yield=Ebit/EV=89/422=21% (>>12%)

Hence CBIP meets Greenblatt's Magic Formula even before its big drop last Friday.

So I don't see any problem with CBIP as a long-term investment.

Posted by kcchongnz > 2013-06-27 17:47 | Report Abuse

Magni meets the magic formula? Absolutely.

Magni just reported its year ended 30/4/2013 financial results.

Return of invested capital is 24%, fantastic. But how much is it selling in the market?

Its market enterprise value is only 3.2 times ebit, or a earnings yield of 31.4%. Can you imagine that!

Posted by kcchongnz > 2013-06-27 19:00 | Report Abuse

Fat Cat,

An ROIC of 24% (>>>12%) and an earnings yield (Ebit/Ev) of 31%! What do you think? Can you find one with that kind of performance but selling at that cheap? I challenge you to find me one.

Posted by kcchongnz > 2013-06-27 19:43 | Report Abuse

Fat Cat, good on you. I am not that kind of person who will ask you to buy or sell a stock. I think you very well know that. That is because capital market is so unpredictable. What if I ask you to buy and the share price plunges? Or ask you to sell and the next day the share price limit up? This type of thing can happen any time because the share market is so unpredictable. The share price can remain undervalued for years; or the fundamentals and business environment, competitions of a company can change without us knowing; Or the management can play tricks on a good business; the macro-economy, interest rate, inflation rate at home and abroad can change etc. There are simply too many factors determining the business of a company and its share price.

I can nevertheless examine the company's business, looking at the rear mirrors at its financial performance and management actions to determine if a company has a moat quantitatively, and hopefully qualitatively to see if it is a good company worthy of investing. If it is so, it is a good bargain with wide margin of safety. Yeah History may not repeat itself but it rhymes.

Another thing is I don't underestimate the power of diversification; holding about say 10 stocks, rather than banging on just a few stocks. If you look at my portfolio posted by Tan KW in i3, and if I just hold say three stocks SKPRes, Kfima and ESC, I will be banging my balls just staring at other stocks which have risen so much and the three so little. SKPRes even losing money!

So whether if you top up your Magni or not, you have to gauge yourself. I know I know, another long winded reply. (but at least with separate paragraphs)

Posted by kcchongnz > 2013-06-27 20:07 | Report Abuse

With the good performance of Magni in term of ROIC, and selling that cheap at an earnings yield of 31% with the price of 2.03, I would want to make Magni a significant part of my holding. Joel Greenblatt will also definitely use his magic formula to buy this stock to form part of his portfolio.

Yeah no point spread into so many stocks if amount of investment not so much. Then you have to look "chun chun".

Posted by Wei Xin > 2013-06-27 20:21 | Report Abuse

I can see Bonia is potential. But price is too high...EPS 28.29 for 6 quarters

Posted by kcchongnz > 2013-06-28 07:39 | Report Abuse

Does Bonia meets the Magic Formula? Yes, it does.

Posted by Wei Xin > Jun 27, 2013 08:21 PM | Report Abuse
I can see Bonia is potential. But price is too high...EPS 28.29 for 6 quarters

Bonia's return of invested capital has been quite steady at about 19% (>12%) for the last few years, much hihger than its cost of capital. At the close of 2.40 yesterday, and 2012 EBIT of 73.5m, its enterprise value (after adding its total debts and less excess cash), the earnings yield (EBIT/EV) is 15.3% (>10%).

Posted by Ooi Teik Bee > 2013-06-28 08:21 |

Post removed.Why?

Posted by kcchongnz > 2013-06-28 10:59 | Report Abuse

Ooi,
This was my previous comment on magni and prolexus. After their quarterly result recently, my view remains the same.

Posted by kcchongnz > Apr 16, 2013 04:11 PM | Report Abuse X

The old fashion garment manufacturing industry seems to see some light recently when their financial performance is improving for the last couple of years.

Magni Prolexus
Revenue 43% 61%
EBIT 38% 78%
NI 40% 25%
Equity 18% 31%

Both Magni and Prolexus grow at very high rate both in terms of revenue and profit last year as shown in the table above. Prolexus appears to grow at a higher rate, mainly because of its smaller size.

Profitability Magni Prolexus
Gross Margin 14.5% 15.4%
EBIT margin 8.3% 7.5%
NI margin 6.4% 6.9%
ROE 17.1% 18.7%
ROIC 22.1% 34.0%

In terms of profitability, both companies did very well with ROIC and ROE well above 15%. Again Prolexus appear to do slightly better, mainly because of its tax credit benefits from losses some years before. What about their market valuations?

Market stats Magni Prolexus
No. of shares 108488 40000
Price 1.53 1.36
Mar Cap 165986.64 54400
MEV 87818 34471
EPS $0.322 $0.311
P/E 4.7 4.4
MEV/EBIT 1.9 2.0
DY 3.9% 2.3%
P/B 0.81 0.82

Again both companies present superb investing opportunities with their low market valuations; PE less than 5; P/B <1.0, and extremely low EV/Ebit <2. Both companies also have healthy balance sheet. So which would you prefer?

I personally prefer Magni because of its more stable return and longer history in operations. It has a higher market capitalization and has been giving higher and good dividend yield for a long time.

Posted by Najib Zamry > 2013-06-28 11:06 | Report Abuse

Hi KC ChongNZ,does Century Bond fulfill the requirements?

Can it become another HPI?

Posted by kcchongnz > 2013-06-28 11:19 | Report Abuse

Najib, Cenbond? Yes and Yes!

Posted by kcchongnz > Jun 3, 2013 10:26 AM | Report Abuse X

Cenbond, is it a good company? Is it a good investment?

By looking at how its share price jumped from 90 sen to RM1.61 at the close of the market on 31/5/2013, there must be something about this company, isn’t it?

Cenbond business includes paper packaging, plastic packaging, contract manufacturing and packing sale of household care products and adhesive products, and investment and property holding.

Revenue for fy ending March 31 2013 shows an improvement of just 3% from 182m to 187m. However its net profit jumped by 32% to 20.6m. Margin improved by 2.6% which is substantial for this type of industry which could positively affect its bottom line. This helps in its return of total capital which improved from 15% to 17%, way above its cost of capital.

Is Cenbond reasonably priced after the jump in its share price recently. Yeah of course. Below is my assessment whether Cenbond is a good company and a good investment.

Cenbond a Good company? 1.610
Good governance ?
Durable business Yes
Growth Yes
ROE Yes 13% >12%
ROTC Yes 17% >WACC
Balance sheet Yes D/E 0.03
Cash flow Yes

Screens for investing
ROTC Yes 17% >WACC
P/B Yes 1.3 <2.0
PE ratio Yes 10.1 <20

Posted by Najib Zamry > 2013-06-28 11:24 | Report Abuse

Thanks KC for the indepth analysis. We will wait for the good news then.

Posted by houseofordos > 2013-06-28 23:56 | Report Abuse

Muar Ban Lee (Based on 2012 annual report)

EBIT = 17121
Enterprise value = 65952
Fixed assets = 17800
Net Working Capital =30148

Return on Capital = 35.7%
Earnings Yield = 26% (based on share price of RM1.12)

Posted by houseofordos > 2013-06-29 00:07 | Report Abuse

Another company that meets the criteria is Willoglen MSC

EBIT = 18212
EV = 91947
Fixed assets=5193
Net working capital = 34405

Return on capital = 46%
Earnings yield = 19.8% (Based on share price of RM0.495)

Posted by houseofordos > 2013-06-29 00:39 | Report Abuse

What about EKSONS ? It looks undervalued and its mainly in the timber business (plywood) which could be see some recovery with the US housing market starting to recover.

Posted by kcchongnz > 2013-06-29 10:48 | Report Abuse

houseofordos,

You are the only one so far appear to use the excel spreadsheet. Your computation for the Magic formula for MBL and Willowglen, I will give a grade of "excellent".

Just a small comment for Willow. Your net working capital for Willow should also include "amount due from contracts" and also "Amount due to contract customers" as these are also receivables and payable respectively. I am not sure if you have done that because your ROIC differs slightly from mine.

Enterprise value should exclude or less off "investment properties" and "investment securities" in the "non-current assets" as they are not consolidated in the financial statements; or not the "ordinary business" of Willow.

So MBL and Willow meet Greenblatt's magic formula easily. If you can have a portfolio of these stocks meeting the magic formula consistently, i am very sure (seldom I express such confidence in stock investment)you can earn extra-ordinary return from the market.

Please email me if you find new stocks like that so that may be we can discuss and hopefully profit together in the long-term together.

Posted by Khek Yang > 2013-06-29 11:10 | Report Abuse

Hi kc,
I personally like the numbers on KFIMA as well, but I haven't bought into them for the time being. I am of the view that the economic horizon doesn't present a clear sky in the near - medium term future. Hence, I'm considering to wait a decent amount of time before dipping.

I'm wondering what was your price of entering KFIMA.

Thanks!

Posted by plumberii > 2013-06-29 11:46 | Report Abuse

I read Joel's book some months ago and tried out his method. Results of his 2 parameters listed in order are as below. I used the normal formula for the cals. Only realised at the end of the book that he used slightly different formula for the 2 parameters. Didn't repeat the calcs as it is quite some work to sort and group them.

My hesitation in using the results as they are based on 1 yr data (that yr could be either good or bad and thus not representative). Yes, should do this for a few years. Will see if I can automate this sorting one day.

The other problem is, there are other important parameters not directly covered in Joel's 2 parameters method. It should be used with other tools to come up with the final list of companies worthy of investment.

My 2 cents.


Tecnic group 4
Zhulian 5
Coastal contracts 5
FIMA Corp 8
Perstima 9
LUXCHEM 9
Padini 10
Hing Yiap 14
Malayan Flour 15
Hock Seng Lee 17
Harrisons Holdings 18
JT int 18
Paramount corp 19
Hai O Enterprise 22
Hartalega hold 22
PIE Industrial 22
CB Industrial 23
Apex Health 23
CCM Duopharama 23
Uchi Tech 23
Dutch Lady 24
NTPM 24
SKP Resources 25
Kumpulan Fima 26
DIGI 27
APM Automotive 28
Chuan Huat (steel) 29
New Hoong Fatt 29
LTKM (poultry) 30
Scientex 30

Posted by kcchongnz > 2013-06-29 12:22 | Report Abuse

plumberii,
Excellent list of companies you have screened using Joel Greenblatt's Magic Formula. I personally have analyzed some of the companies and commented before in other threads such as "In search of excellence", "Value growth companies", "5 yardsticks of Cold Eye", etc. I will look into some of those in the list which I have not looked into before.

I believe the two "different formulas" you mentioned are basically the same, especially for the computation of enterprise value, and if there is any difference, especially in invested capital, it is minor. for example, I sometimes use the formula for excess cash as
cash and cash equivalent - Max (0, CL-CA (excluding cash)).
Some people may include deferred tax and tax payable etc in the calculation of working capital.

Yes, may be we should look at its ROIC for a few years instead of just last year for consistency. But Joel I believe just use the last year ROIC and he re-balance his portfolio every year basing on his magic Formula.

Joel used these two parameters for simplicity. Actually he used the magic formula to screen all the stocks in the US market and invests in say the top 10% of those stocks in his annual re-balanced portfolio. Here we try to use his magic formula to choose good ROIC company and yet trading at high earnings yield.

So what other important parameters you think should be incorporated? May be we can discuss here the pros and cons of them here.

Posted by plumberii > 2013-06-29 13:38 | Report Abuse

Noted.

Not the final yardstick I am afraid. E.g. Uchi Tech came up at 23rd (out of the 100+ companies I screened through). 23rd is considered pretty good BUT when you look at the details, the final total return to shareholder (capital + dividends) has been poor (@6% last 11 yrs @-7% for last 5 yrs). Yet, it came up at 23rd position. That is because only 1 yr data was used.

I take Joel's method as initial filter and then check with other parameters to finalise the list.

Cheerio.

Posted by gark > 2013-06-29 14:15 | Report Abuse

Ha.. nice to see you here plumberly..good contribution.

Posted by kcchongnz > 2013-06-29 14:58 | Report Abuse

Yeah the magic formula is not the final yardstick to select individual stocks.

Greenblatt used it to rank stocks to invest in a portfolio. His portfolio outperformed the S&P500 by a wide margin for the 22 years from 1988 to 2009. The Magic formula outperformed S&P 17 out of the 22 years and achieved a CAGR of 23.8% as compared to the 9.6% of S&P.

I am sure in your case when you used the magic formula to rank stocks and invest in the say top 10 of your list, you would have made extra-ordinary return compared to KLSE.

Actually Uchi-tech and many stocks in certain industries like Berjaya Toto, BAT, DIGI, Zhulian, Haio, Dutch Lady, Jobstreet, etc have very high ROIC and hence they meet the first criterion of the magic formula by a wide margin. However, not many have as good metrics as the second criterion of earnings yield. In Uchitech's case, using its latest price of 1.28, its enterprise value worked out to be 370m; and earnings yield based on last year's ebit of 40.5m, is about 11%. This just misses my criterion of 12% and hence it won't be a stock in my magic formula.

As for other criteria which I may look further into is growth for discussion purpose, a minimum expected growth rate of say 4% in accordance to the growth of economy, or inflation rate may be required. Uchitech missed that for the last two years. Uchitech paid all its cash flows out as dividends every year which many people like very much. But that left nothing for capital expenses for growth and stifled its growth prospect.

Anyway, thanks for your input, especially your list based on the magic formula. Good to see feedback from people like you. Very rare indeed.

Posted by plumberii > 2013-06-29 15:09 | Report Abuse

Yes, see that Uchitech has been paying high dividends in the past, attracting dividend seeking investors, not knowing the full story. Heard about this company from a friend who wanted to invest in it and thus I studied it.

No problem in sharing. One of the things I want to practise is

Smart people learn from experience
Wise people learn from the experience of others

I want to be a wise man. Ha.

Cheerio.

Posted by kcchongnz > 2013-06-29 15:32 | Report Abuse

Posted by Fat Cat Tim Buddy > Jun 29, 2013 03:03 PM | Report Abuse
hey kcchong.. can you reveal whats the other stocks you holding other than skpres,kfima,ecs? :)

Fei Mau, why you want my stocks? Want to compare? I tell you yours would probably have done much better. Mine, ok lah, no multi-bagger but considerably better than KLSE.

It is not about yours or mine again. It is about sharing of knowledge, experience and thoughts here, and hopefully together we find some good stocks to invest. Hope you can contribute yours here. I am sure you have found some good stocks to invest with the spreadsheet. I know, you may have your own instinct or principles in your investment, not necessary to be the same as mine.

Really want my other stocks. Just go to kcchongnz portfolio (revised) posted in i3investor here. I didn't post it but Tan KW did it. For other stocks not there, if you have read my postings, you would have found some there.

Posted by plumberii > 2013-06-29 15:40 | Report Abuse

FCTB,

Noted and thanks.

No, I do not mean I will do what others do or say. My rule no 1 is, don't just listen and do what others say. I should digest and study it, and see whether I am convinced of its merit or not. Learn from the experienced gurus like KCChongNZ and gark, their successes and failures (if any).

Posted by kcchongnz > 2013-06-29 16:11 | Report Abuse

Mudajaya past performance was fantastic but share price disappoints. They have credibility problem a couple of years ago. I guess they must have problems in Indian power plant too. Few foreign companies make money in India. I have the call warrant of Mudajaya, small outlay hoping for big payoff, beauty of leverage.

Scientex performed very well, in its business as well as share price. I think the business will continue to do well for the near future. Well done for you.

NTPM, stable and durable business which would last for long time. but at 55 sen I think a bit expensive as earnings yield (ebit/ev) is only 10%, less than my required 12%. But then again because of the durability of its business, it may not be expensive according to Charlie Munger; like when they bought Coca cola at quite high price.

WCT, don't know much though I have the company warrants bought because it was cheap in relation to the underlying share. If I have Pintaras, a niche foundation company share which the business I know well and they have been doing well, and continue to do well, why need another construction company?

SOP and TDM are my two favorite plantation companies; SOP for its growth, and TDM for its value (growth seems to come soon too). No more holding them for a few months already.

You missed out my other stocks like Plenitude, Jobstreet,Pantech, Kimlun, Prestariang which I have recently disposed off.

Others good companies and at low valuation which I discovered through others in i3investors are magni, mbl, willow, cbip, Johore Tin, Haio, Cenbond, Apollo, and Lii Hen etc. This shows I didn't waste my time in i3.

Posted by houseofordos > 2013-06-29 16:27 | Report Abuse

KC, when deciding price to sell, do you rely on the intrinsic value or do you base on a certain target earnings yield based on magic formula above ?

Posted by Tipster > 2013-06-29 16:39 | Report Abuse

what about eksons (action)...

Posted by kcchongnz > 2013-06-29 16:41 | Report Abuse

house, good question. Very often i sold because of itchy fingers when I found that i have already made considerable profit. That is the problem of the ease of internet trading. And it may end up I bought back again because I find that the price is still way below the intrinsic value.

So I normally base on the price in relation to intrinsic value, and 30% margin of safety is my norm. But intrinsic value is also a moving thing, when its revenue and earnings grow each year, its intrinsic value grows too. A fast growing company may still have high margin of safety even though earnings yield is low say less than 10%. So the magic formula, like what plumberii mentioned, is more of a guide.

Posted by plumberii > 2013-06-29 16:41 | Report Abuse

KC,

Hope that you won't mind sharing on these 2:

a. SOP Govt link (the Sarawak White Hair guy)does not worry you? Or you see it as an advantage? My fear is they can pull out or change things for their own benefits.

b. Jobstreet - mind sharing why you sell this as it is on my to-buy list?

Thanks.

Posted by kcchongnz > 2013-06-29 17:14 | Report Abuse

SOP is not government link as far as I know. go read their annual report on the major shareholders. If it is related to White hair, i won't touch it myself.

sold Jobstreet? Itchy fingers again. Jobstreet share price has gone up by leaps and bounds recently. At 3.90 now, the earnings yield (Ebit/EV) is not attractive anymore at 7%, basing on last year's financial performance. It is continuing to grow but in my opinion, the market may be paying too much for this expected growth.

Posted by kcchongnz > 2013-06-29 18:13 | Report Abuse

Posted by houseofordos > Jun 29, 2013 12:39 AM | Report Abuse
What about EKSONS ? It looks undervalued and its mainly in the timber business (plywood) which could be see some recovery with the US housing market starting to recover.

Eksons doesn't impress me. Its earnings and cash flows are not stable. If using the magic formula, and based on its latest financial results ending 31/3/2013, it fail its first criterion on ROIC at about 7% only (<<12%).

Posted by Tipster > 2013-06-29 18:26 | Report Abuse

They r also into property dev but the profit doesnt seem to show...

Posted by fatinvest > 2013-06-29 18:29 | Report Abuse

Sarawak Plantation is related to white hair, not Sarawak Oil Palm

Posted by gark > 2013-06-30 00:08 | Report Abuse

Sop is related to white hair cronies and family members.....

Posted by gark > 2013-06-30 00:13 | Report Abuse

Tdm isalready fully valued after the recent bi and share split. However the new plantation and hospital will fuel further growth but needs time at least until 2014

Posted by kcchongnz > 2013-06-30 08:45 | Report Abuse

Thanks gark for the comments on SOP and TDM.

Sop related to White hair? Didn't know about it. I don't like this type of cronies kind of relationship.

TDM fully valued? Probably, haven't look at it for some time already.

See if more people contribute, we are more informed.

Posted by inwest88 > 2013-06-30 10:14 | Report Abuse

KC Chong, I really appreciate the comments and contribution on the status of the companies as many others just simply give their views that the prices of certain shares will go up or down. You deserve to make money from the market with so much time, energy and effort put in. I am sure a lot of people will learn and benefit from your observations. Keep up the good work.

Posted by kcchongnz > 2013-06-30 18:58 | Report Abuse

Posted by Khek Yang > Jun 29, 2013 11:10 AM | Report Abuse
Hi kc,
I personally like the numbers on KFIMA as well, but I haven't bought into them for the time being. I am of the view that the economic horizon doesn't present a clear sky in the near - medium term future. Hence, I'm considering to wait a decent amount of time before dipping.
I'm wondering what was your price of entering KFIMA.
Thanks!

Khek Yang, invest in the market only if you are comfortable about it. But to me there will always be uncertainties in the economy, here and all over the world. The thing is that even renounce economists can't even among themselves what the future direction of the economy will be. Half of them have completely different views. It is also proven again and again this stuff is hard to predict and there is no statistical evidence that anybody can predict this stuff consistently correctly. So how? Wait until when? Meanwhile it has been shown that the equity market returns about 10% a year.

What is the price I bought for Kfima? I started investing in this stock since about 4 years ago when it was 70-80 sen. I even bought some when it went up to 2.20+. But what price I bought should not be your benchmark.

The way I decide what price to buy is first to study if the business is durable that it is likely to last many years to come. Then I analyze if there is economic moat; that it has high return of capital, good earnings and good quality of its earnings. Is there alignment of interest among the management and shareholders? How management allocate capital and may be if there is growth in the business. If all the above is affirmative, what price am I willing to pay? That means I must have a feel of the intrinsic value of the business.

So I think maybe it is good if you can think and analyze along that line, rather than the historical prices of Kfima. Company business changes, revenue and earnings may grow, margins may have expanded/shrinked as time goes on, and hence its intrinsic value changes from time to time.

Hope I have answered your question.

Posted by cmlooi > 2013-06-30 19:29 | Report Abuse

Sometimes I wonder if those American books with lots of ideas and "proven" techniques could be applied here in Malaysia. Business and politics ways are different over there. Yeah, I have Greenblatt's little dark blue book too. Anyway it would be good to see if it works locally.

Posted by kcchongnz > 2013-06-30 19:46 | Report Abuse

The Greenblatt magic formula is simple technique, buy good company at low price. Don't you think it is plausible? Don't you think it should work everywhere? Should it be limited to US market?