(27-03-2020, 11:23 AM)jaco Wrote:(11-08-2019, 03:12 PM)jaco Wrote: CK Hutchison is a well-run conglomerate that holds subsidiaries with moats around their business. I will keep it on my watch list and might buy the share when it's so obviously cheap in terms of dividend yield, PEG, EV/EBITDA, etc that you don't need a precise SOTP calculation for a confident decision.
The recent market turmoil did not leave CK Hutchison unaffected and I decided to buy tuesday at 49.50 HKD per share. As stated earlier, I will not pretend that I am able to value this complicated conglomerate in all details, but as Ben Graham said: “You don’t have to know a man’s exact weight to know that he’s fat.”
The stock is quoted with a P/E around 5. This seems ridiculously low to me. Note that the E here, is not inflated by any non-recurring income. CK Hutchison had a presentation of it's FY 2019 results last week and those results were overall pretty similar to 2018.
All subsidiaries performed decent in 2019, except for Energy. This concerns the Canadian oil company Husky, which is a disaster. However, Husky is only a few percent of the overall conglomerate in any way you want to measure.
CKH's borrowings are high, but the maturities are staggered over the next 10 years. Interest and repayments seem well covered by the free cash flows. With assets such as toll roads, harbours, waste processors, water and electricity suppliers any default seems unlikely. These are also the type of assets that I expect to weather the current crisis, even if it takes longer as we expected.
I bought CK Hutchison as a cornerstone for my portfolio with the intention to hold it for the long term.
Some more background from external source:
https://valueinvestasia.com/here-is-what...dings-ltd/
haha i was also thinking along these lines a week ago, i.e " . As stated earlier, I will not pretend that I am able to value this complicated conglomerate in all details"
But it does look cheap statistically
But eventually i decide that if i were to choose between CKH or BRK, i would go for berkshire