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ultraman_taro
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Posting #21: Thu Nov 1st, 2007 17:27 |
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Agree with Random! Stockpicking is more of an art than science! Especially with growth stocks i guess. Currently, the available info paints a bright future for Green Packet, and they've indeed show some impressive results in securing contracts with reputable companies, especially those in China.
Now, there's a safer approach to this I guess.. Wait till Green Packet's 3rd quarter results are released. If it looks on track to hit RM70M, and the price has not gone up too high, it will be a great time to enter. Personally, I've made my entry, albeit a small one.
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random
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Posting #22: Thu Nov 1st, 2007 17:40 |
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Maybe you can post up some cash flow figures for GP?
But seriously this is some good stuff.. (your postings)
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stockraider1
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Posting #23: Fri Nov 2nd, 2007 01:53 |
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Dear Ultraman,
Commenting on the issue below it is quite natural the growth proponent will protest of decline of 40%.
However if u go back and compare the actual growth rate each year it's indeed decreasing by 40% each year.
It is very difficult to forecast for growth ,perhaps like your suggestion wait for result and make judgement accordingly !
But if one adopt this approach, the investor will have a big disadvantage bcos the stock may well run way ahead of him !
So need to anticipate the growth rate in order to make profitable investment in growth stocks
'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.'
Dear Random,
'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?'
Commenting on the issue, we actually adopt the above analysis when appraising all stocks !
But then what stock is actually are growth stocks and when do u consider it is a growth stock, that u are willing to pay more ?
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Moolah
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Posting #24: Fri Nov 2nd, 2007 02:44 |
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Random,
Sales Earnings
2004 18.069 11.914
2005 38.378 31.717
2006 98.931 56.112
ttm 140.549 60.513 |
The above numbers are from klse tracker. Too lazy to check and verify its accuracy in full.
Anyway here are some simple points.
1. fy 2004 numbers is simply way to small a base. Smaller base numbers makes everything, esp growth numbers looks nice. So attempts to crunch out the annual compounded growth rate would make this stock looks super duper.
2. So if you take out 2004, what you have? Only 2 fiscal year numbers. How to make a rational decision? Isn't it pretty hard to gauge? Me for one, i cannot make too little comments on it.
3. TTM numbers giving an indication of an earnings of 60m oy nly. If the trailing numbers can be assumed correctly, then there is quite a possibility that this year, GPacket's earnings growth compared to its previous year (fy 2006) earnings of 56 million is simply not so impressive.
Last edited on Fri Nov 2nd, 2007 02:48 by Moolah
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Moolah
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Posting #25: Fri Nov 2nd, 2007 02:46 |
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Ultraman,
Regarding its Balance sheet. Go thru Gpacket's historical corporate exercises. There has been 2 private placements.
PROPOSED PRIVATE PLACEMENT OF UP TO 36,725,000 NEW ORDINARY SHARES OF RM0.10 EACH REPRESENTING UP TO TEN PERCENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL OF GREEN PACKET BERHAD ("PROPOSED PRIVATE PLACEMENT")
This was completed in June 2006.
PROPOSED PRIVATE PLACEMENT OF UP TO 40,397,500 NEW ORDINARY SHARES OF RM0.10 EACH IN GREEN PACKET BERHAD ("GPB" OR THE "COMPANY") REPRESENTING UP TO TEN PERCENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL OF GPB TO INVESTORS TO BE IDENTIFIED
That was completed in Dec 2006.
Some 76 million shares was placed out. And what these placements did was boost GPacket balance sheet by a whopping 272 million according to its fy 2006 Q4 earnings note cash flow statement.
Quarterly rpt on consolidated results for the financial period ended 31/12/2006
So what I am saying is this.
In fy 2005, Gpacket did a 10% placement. That boosted its balance sheet.
In fy 2006, Gpacket did another 10% placement.
So in terms of whether GPacket's balance sheet is truly healthy, perhaps you might want to do a little bit more exercise by discounting these cash generated by these corporate exercises. Only this way, you can have a better understanding of how healthy is GPacket's balance sheet.
As it it... GPacket price is slip sliding away. Clear as daylight. Buying to a slumping stock brings one opportunity. I do not doubt this at all.
However, I believe it is rather important that we understand why too.
Receivables was mentioned. Looking at the numbers, growth is clearly declining. Could this be the cause? I do not know for I still do not understand Gpacket's business, however, one thing is for sure. I would want to find out a really just cause in investing in this stock, which is why i believe that you should scrutnise every single thingee in great deatail.
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ultraman_taro
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Posting #26: Fri Nov 2nd, 2007 02:55 |
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Agreed on your points. Green Packet is still a young company.
Also, I've mentioned in my original post; one of the factors regarding the price drop, is failure to meet analyst expactations. Most forecasted RM100m profits and above for 2007.
I think you need to ask 2 questions before investing in Green Packet.
1. How much do you think Green Packet will make in the future?
2. Is it important for you to see immediate results?
The difference between a good and bad investment for me had always been the entry price.
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Moolah
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Posting #27: Fri Nov 2nd, 2007 03:00 |
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Continue...
[color=#0000ff NXlLb="0" Mj_Nc="1"]Quarterly rpt on consolidated results for the financial period ended 31/12/2006
The following picture is done by Vista snipping tool and loaded into a site like flikcr.
As you can see, fy 2006 cash balances was boosted some 272.5 million. The last year, it was boosted by some 39.634 million.
Which is about some 311 million or change.
Now from fy 2005 to its current half year, GPacket has earned some 110 million in total ( 31 + 56 + 230)
It's lates quartely earnings: Quarterly rpt on consolidated results for the financial period ended 30/6/2007
Cash balances only totals some 254 million or so.
Ok, some bonus was paid... but... u get the feeling right away that cash flow is not really that healthy.
Yes... there is tons of cash in GPacket's piggy bank... but i do get the shrinking feeling.
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ultraman_taro
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Posting #28: Fri Nov 2nd, 2007 03:03 |
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Moolah wrote: Ultraman,
Regarding its Balance sheet. Go thru Gpacket's historical corporate exercises. There has been 2 private placements.
PROPOSED PRIVATE PLACEMENT OF UP TO 36,725,000 NEW ORDINARY SHARES OF RM0.10 EACH REPRESENTING UP TO TEN PERCENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL OF GREEN PACKET BERHAD ("PROPOSED PRIVATE PLACEMENT")
This was completed in June 2006.
PROPOSED PRIVATE PLACEMENT OF UP TO 40,397,500 NEW ORDINARY SHARES OF RM0.10 EACH IN GREEN PACKET BERHAD ("GPB" OR THE "COMPANY") REPRESENTING UP TO TEN PERCENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL OF GPB TO INVESTORS TO BE IDENTIFIED
That was completed in Dec 2006.
Some 76 million shares was placed out. And what these placements did was boost GPacket balance sheet by a whopping 272 million according to its fy 2006 Q4 earnings note cash flow statement.
Quarterly rpt on consolidated results for the financial period ended 31/12/2006
So what I am saying is this.
In fy 2005, Gpacket did a 10% placement. That boosted its balance sheet.
In fy 2006, Gpacket did another 10% placement.
So in terms of whether GPacket's balance sheet is truly healthy, perhaps you might want to do a little bit more exercise by discounting these cash generated by these corporate exercises. Only this way, you can have a better understanding of how healthy is GPacket's balance sheet.
As it it... GPacket price is slip sliding away. Clear as daylight. Buying to a slumping stock brings one opportunity. I do not doubt this at all.
However, I believe it is rather important that we understand why too.
Receivables was mentioned. Looking at the numbers, growth is clearly declining. Could this be the cause? I do not know for I still do not understand Gpacket's business, however, one thing is for sure. I would want to find out a really just cause in investing in this stock, which is why i believe that you should scrutnise every single thingee in great deatail.
Yes, I'm aware of the placements. It was necessary for Green Packet to have a cash hoard in place in anticipation of the Wimax roll-out and its other expansion plans. Shares were diluted; but i believe it had been countered by the recent share consolidation. The placements are equivalent to roughly 11% of the current outstanding shares.
My conclusion on this; if you were a shareholder when the shares were placed out, I'm sorry, you lost out. The price was high then, and shareholders earnings were diluted.
It's a different story now after the share consolidation and price drop. Again, I would like to emphasize, the difference of a good and bad investment has always been the entry price.
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Moolah
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Posting #29: Fri Nov 2nd, 2007 03:06 |
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Ultraman,
The difference between a good and bad innvestment for me had always been the entry price
It goes a bit deeper for me.
Yes, entry price is very important. It usually dictates the chances of success or failure in our investment...
but...
the danger here is if you get too focused on the entry price, then the danger is that you might get carried away by allowing the share price dictate your investment...
err.... rather complex this thing... of couse... some surely won't agree.
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random
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Posting #30: Fri Nov 2nd, 2007 03:11 |
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Moolah wrote: Random,
Sales Earnings
2004 18.069 11.914
2005 38.378 31.717
2006 98.931 56.112
ttm 140.549 60.513 |
The above numbers are from klse tracker. Too lazy to check and verify its accuracy in full.
Anyway here are some simple points.
1. fy 2004 numbers is simply way to small a base. Smaller base numbers makes everything, esp growth numbers looks nice. So attempts to crunch out the annual compounded growth rate would make this stock looks super duper.
2. So if you take out 2004, what you have? Only 2 fiscal year numbers. How to make a rational decision? Isn't it pretty hard to gauge? Me for one, i cannot make too little comments on it.
3. TTM numbers giving an indication of an earnings of 60m oy nly. If the trailing numbers can be assumed correctly, then there is quite a possibility that this year, GPacket's earnings growth compared to its previous year (fy 2006) earnings of 56 million is simply not so impressive.
Yeah the figures are the same as what ultraman posted (both of you using klsetracker ah?)
Anyway you were saying about looking at the cash flow ?
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