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CS Tan
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Posted by duitKWSPkita > 2014-11-30 23:45 | Report Abuse
Happy investing day to everyone. I believe start from September oil and gas sector has been a hot topic and attract the spotlight from retailer, speculator, fund manager, long term value investor, rebounder as well as i3 forumers. Oil and gas sector is considered as the top ranked barriers of entry game in the industry world. High risk high gain A term that never go for HOLIDAY since couple of decades ago when the market is either BEARISH or BULL-BULLISH. Well, in today market oil and gas counters not only provide a trading opportunities but to provide us ROLLER COASTER game something like what you like from theme park. Seriously, nobody know how low the Crude oil can further dip but again in any trading world: THE BEST CURE FOR LOW PRICES IS LOW PRICES similar to "THE BEST CURE FOR HIGH PRICES IS HIGH PRICES". When oil and gas counters are trading in huge discounted price smart long term value investors and institutes start to scan and screen to figure out the best VALUE BUY counter from the market when CrudeOil price rebound. They do care about fundamental value as they invest billion to some extend trillion amount to that sector to aim for greatest(fast, stable and promising)return. Oil and gas analysts in leading Institutes start to evolve their in house fundamental analysis method as well as key ratios to more harmonized and all-rounded comparison parameters.Instead of fast screening factor such as P/E, EPS and Gearing they evolve the comparison study to ENTERPRISE VALUE(EV), ENTERPRISE VALUE over EBITDA (EV/EBITDA), PRICE over CASH FLOW(P/CF), ENTERPRISE VALUE OVER DEBT-ADJUSTED CASF FLOW(EV/DACF) and else. @@@@@@@@@@@@@@@@@@@@@WHY WHY WHY WHY need to do extra effort while some claim with PE and EPS they are more than enough to earn money? ANSWER is giant Institute looking for M&A, the value on threat of new entrants, value of vertical and horizontal competitive rivalry and most crucial is to guage that a listed company they invested will not fall down(financial disaster or bankruptcy) when commodity price plunge down dramatiscally. I have completely computed the newly introduced comparison study on Bursa's 21 counters which comprised of ALAM,ARMADA,BARAKAH,COASTAL,DAYA,DAYANG,DELEUM,Destini,DIALOG,MHB,PENERGY,PERDANA,PERISAI,SCOMIES,SKPETRO,TAS,TGOFFS,UMWOG,WASEONG,SONA,HIBISCUS. ####Special Note: 1) You may find my classification of the various streams (Upstream, Midstream, Downstream, EPCC, M&E etc) at ChrissyConn House few months ago) to have better and more efficient peer comparison. 2) Ony Top 7 of each comparison criteria will be presented 3) There are several adjustment and normalization for the financial report figures to reflect the most updated business nature There comparison study covered: 1) P/E valuation and ranking 2) Enterprise Value (at time of audited financial figures) 3) EV/EBITDA 4) P/CF 5) EV/DACF 11111111111111111111111111111111111111111111111111111111111111111111 - Quick PE comparison (Source: ASEAMBANKER) TAS 5.78 ALAM 9.35 PERISAI 10.13 TGOFFS 10.41 MHB 12.07 COASTAL 12.13 DELEUM 12.75 PERDANA 15.49 SKPETRO 16.48 DAYANG 16.66 ARMADA 17.26 SCOMIES 19.73 BARAKAH 22.46 DIALOG 33.16 UMWOG 36.27 WASEONG 38.63 Destini 45.96 PENERGY 58.03 DAYA 75.15 **Remarks: There have different business models in nature so it is quite unfair to compare all with a synchronized PE criteria. I will try to produce new PE ranking list based on their similarity in March 2015. So we can read and value these counters more effective. 22222222222222222222222222222222222222222222222222222222222222222222 - Enterprise value = Market Cap + Debt - Cash It represents the entire economic value of a company. More specifically, it is a measure of the theoretical takeover price that an investor would have to pay in order to acquire a particular firm. Enterprise value considers much more than just the value of a company's outstanding equity. To buy a company outright, an acquirer would have to assume the acquired company's debt, though it would also receive all of the acquired company's cash. Acquiring the debt increases the cost to buy the company, but acquiring the cash reduces the cost of acquiring the company. ---------Enterprise Value(RM'000) SKPETRO 33,542,487 ARMADA 11,303,716 DIALOG 8,400,977 UMWOG 7,773,393 MHB 3,054,030 DAYANG 2,701,964 WASEONG 2,386,613 SCOMIES 2,351,633 COASTAL 2,061,459 ALAM 1,493,253 PERDANA 1,277,266 PERISAI 1,221,481 BARAKAH 1,202,294 PENERGY 954,164 DELEUM 945,523 HIBISCUS 945,140 Destini 546,068 SONA 522,058 DAYA 518,826 TAS 325,002 TGOFFS 125,440 **Remarks: Note that a problematic company(finance status) with HIGH EV value will encounter BIGGER challenges to get finance assistance. In the eyes of corporate world, it's more secure to deal with high EV company(barriers of exit the answer). ---------------to be continued---------------