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random
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Posting #11: Thu Nov 1st, 2007 15:22 |
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Yeah I guess that would be a better way to look at it..
See? By asking stupid question I learned something new..
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random
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Posting #12: Thu Nov 1st, 2007 15:24 |
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Seriously though.. Can you show us how ah? Just this one time..
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stockraider1
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Posting #13: Thu Nov 1st, 2007 15:38 |
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Moral of this story is that it is extremely difficult to establish the potential growth rate of the company as an outsider !
Even insider have same difficulty although having a slightly more advantage.
Therefore valuing Growth company for investment is extremely hazard !
Hence growth company is difficult to value accurately,and the growth value is derived more towards gut feel and speculations !?
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random
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Posting #14: Thu Nov 1st, 2007 15:54 |
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I am sorry dearest stockraider1 but I do not share your view. As an outsider, we can only do so much ; growth stock or not..
If this method cannot be used to appraise a growth stock, then it cannot be used for ANY stock; i.e. undervalued stock, big cap stock, bla bla etc etc
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stockraider1
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Posting #15: Thu Nov 1st, 2007 16:30 |
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An undervalue stock is easy to identify ie) what u see is what u get ?
U can examine the balance sheet,its assets,its reported P&L and value accordingly.No need to make unnecessary judgement on Growth Rate !
Lets compare Green Packet at PE 24 and NTA per share of Rm 0.94 if we use this as a criteria of investment to support the mkt price Rm 3.38 is it acceptable ?
Of course it is not ! Then what is the acceptable Growth rate to support the higher current PE for Green Packet ?
The issue of gut feeling and forecasting need to put into action !
Even if the growth rate is established it is subject, to too much controversy !
Now look at NCB at PE 12 is it acceptable based on share price of Rm 2.97 ?
Yes at this level it is already an investable stocks.In addition it has net cash of Rm 1.30 per share and NTA per share of Rm 3.60.
This information can be easily establish without much controversy !
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stockraider1
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Posting #16: Thu Nov 1st, 2007 16:46 |
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Lets try this simplified experiment;
Sales PAT EPS
2007 76m 6.7m 0.16
2006 63m 5.8m 0.14
2005 58m 4.8m 0.12
2004 43m 1.6m 0.04
Without looking at the name of the company,ie if the company has net cash per share of Rm 0.60 and NTA of Rm 1.50 :
Q1 Is this a growth stocks ?
Q2 How u value the company ?
Q3 If u want to takeover what is a fair price per share ?
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ultraman_taro
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Posting #17: Thu Nov 1st, 2007 16:53 |
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| Hi all, want to point out an error in my posting. The current price of RM3.38 is not the lowest this year, it closed at RM3.16 on 17th August, but was immediately chased up to RM3.50 on the following day.
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random
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Posting #18: Thu Nov 1st, 2007 17:04 |
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stockraider1 wrote: Lets try this simplified experiment;
Sales PAT EPS
2007 76m 6.7m 0.16
2006 63m 5.8m 0.14
2005 58m 4.8m 0.12
2004 43m 1.6m 0.04
Without looking at the name of the company,ie if the company has net cash per share of Rm 0.60 and NTA of Rm 1.50 :
Q1 Is this a growth stocks ?
Q2 How u value the company ?
Q3 If u want to takeover what is a fair price per share ?
Dearest stockraider1,
I look at every possible info I can find when appraising a stock.. Not just figures.. I try to consider everything.. what business they are doing? who is the management? etc etc all the way down to price movement and current market views..
I would consider stock picking as more of an art than a scientific approach
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ultraman_taro
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Posting #19: Thu Nov 1st, 2007 17:07 |
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stockraider1 wrote: Ultraman,
Tks for the info and assuming this position is correct the projected profit for 2007 will be as follows;
Rm 55.3m multiply by 23.2m (half yr 2007) divide by 18m (half year 2006)=71m.This gives EPS Rm 21.4.
Growth rates
2005-166%
2006-74%
2007-29%
2008-12%(forecast based on 40% of previous year)
2009-5%(forecast based on 40% of previous year)
Thus the Eps in 2009 will be 21.4 x 1.12 x 1.05 = Rm 0.25.
Share price Rm 3.38 hence Prospective PE 13.5 time.(based on 2009 earnings)
Current stalwart like Maybank and Plus trade at around PE 14.
Could it be the mkt is factoring the growth converting Green Packet into a Blue Chip stalwart and hence value it accordingly ?
The growth rate % is indeed shrinking, but I guess it's not possible for any company to keep growing at a rate of more than 50%. If they can do that for more than 5-10 years, they would become of of the most profitable companies on the KLCI! What I don't agree with you is assuming that the following year's profits growth would reduce by 40%. The developments on Green Packet all point towards an excellent 2008.
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ultraman_taro
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Posting #20: Thu Nov 1st, 2007 17:16 |
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random wrote: Dearest ultraman_taro,
Hope you don't mind, I will play the part of the villain and point out some things..
Curi your table abit..
Earnings
2004 2005 2006
Revenues (RM) 18.1M 39.4M 98.9M
Profits (RM) 11.9M 31.7M 55.3M
Looking at it GP has like been approx doubling both revenue and profits yoy. Margin is a very enviable 60+%
Now I know that profit is calculated by the following:
Profit = Revenue - Expenses
So the table then becomes like this.. ( I took the shortcut way :D)
Earnings
2004 2005 2006
Revenues (RM) 18.1M 39.4M 98.9M
Expenses 6.2M 7.7M 43.6M
Profits (RM) 11.9M 31.7M 55.3M
But but.. lets say I want to recognise my profit only when the cash is in the piggy bank...
So I minus off the receivables from the revenue (kira write off la worst cash scenario... ass-u-ming la)
Revenue Receivables %Receivable from revenue
2004 - 18.1M 12.4M 68.5%
2005 - 39.4M 24.4M 62%
2006 - 98.9M 62.1M 62.8%
So it becomes this..
Earnings
2004 2005 2006
Revenues (RM) 5.7M 15M 36.8M
And again ass-u-ming all the receivables has no cost-of-goods-sold (can la horr.. give chance since margin so high )
So the expenses remain the same...
Earnings
2004 2005 2006
Revenues (RM) 5.7M 15M 36.8M
Expenses 6.2M 7.7M 43.6M
Profits -0.5M 7.3M -6.8M
Now how do the earnings growth look now? 
Now before you say anything.. I know this is a little bit extreme.. but I'm just experimenting here.. hope you don't mind.. Kira this one litmus test la.. If can pass this.. sure can pass everything..
How? Can ah?
Random...i don't understand how you can just minus off the receivables from the revenue like that...Receivables are ongoing....they turn into cash when the customer pays. So far there haven't been any write-offs. They get paid roughly every 6 months.
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