ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

(21-05-2012, 09:50 PM)CityFarmer Wrote: [ -> ]IMO, the primary valuation should base on earning. Value by NAV is secondary supporting information. It is remain true for Slow/Fast growth stock, Turnover stock and Cyclical. The only exception is Asset play stock which the reason to invest is its valuable asset. So it is logical to focus on asset.

My 2 cts

Yes I agree that earnings valuation is much more appropriate in valuing most profitable businesses with steady free cash flow ... not sure how exactly to do so though ... do you know any books/websites to read that can explain more about dcf valuations?

DCF seems a little tad complicated with discount rates and projections of future free cash flow growth rates.

I think its more appropriate to value Popular using a Sum of parts valuation. The Property business can be valued using discount to book value approach. The retail, educational and publishing buisness can be valued using a DCF method. Blend the 2 values together to get a fair value.

(21-05-2012, 10:56 PM)mysterion Wrote: [ -> ]

(21-05-2012, 09:50 PM)CityFarmer Wrote: [ -> ]IMO, the primary valuation should base on earning. Value by NAV is secondary supporting information. It is remain true for Slow/Fast growth stock, Turnover stock and Cyclical. The only exception is Asset play stock which the reason to invest is its valuable asset. So it is logical to focus on asset.

My 2 cts

Yes I agree that earnings valuation is much more appropriate in valuing most profitable businesses with steady free cash flow ... not sure how exactly to do so though ... do you know any books/websites to read that can explain more about dcf valuations?

DCF seems a little tad complicated with discount rates and projections of future free cash flow growth rates.

I would like to share my experience. I started off with all methods that i can find, and put them in a excel, i.e. DCF, SOTP etc. As engineer, i am comfortable with numbers, so no issue to get all of them done. But after a while, you will find more does not mean accurate. It slowly become a number game which mean nothing if you can't get a meaning out of it.

My advice is start simple, like PE ratio. Use PE relative with historical, market/competitor or any meaningful reference. Instead of starting with a valuation of the whole company, it is more important to learn how to access financial well-being in Balance sheet, determine recurring revenue instead of one-off income etc.

After you get a hang of it, you will slowly know when you need to use SOTP method to access a company instead of just a PE. SOTP will just a natural break-down if you already know to decipher the balance sheet, and to estimate the right PE used for core biz.

DCF is useful, but most of the time, it remain as supporting info to validate my final valuation.

Hope it help.

Let me post this while Popular Hldgs share price is at a recent Hi of $0.193....

I have said before that I'm not a very sophisticated investor as there're many things I don't know for eg. I must have made a fool of myself in an earlier post as I thought NCAV is CA - CL. Haha..

I think I learnt DCF during night school loooong ago and I vaguely remembered assisting my more experienced classmates during assignments to put in the 'right' discount rate (I was in charge of generating figures since I was hopelessly inexperienced in biz stuff) to justify our conclusion to 'buy' an aerospace-related biz for a case study. That was my one and only 'experience' using DCF.

I don't even know how to do SOTP but it's always an interesting read in those analyst's reports to see how they do it (sometimes like magician plucking from the air). Still, too lazy for this old dog to learn new tricks.

Back to Popular Hldgs, I repost Pg 9 #88 ,

Q412 (Apr) is seasonally their worst Q? But, assuming they managed to maintain the same level of earnings as Q411, then EPS = 3.4ct (better than FY11 EPS = 2.83ct but worse than FY10 EPS = 4.53ct). That'd be good enough to increase DPS to 0.7ct?

What I don't quite like about Popular Hldgs is their low NPM of 3% - 6% when they're profitable. For now, I can live with that as long as they remain profitable.

What I like about Popular Hldgs is their huge cash of $129Mil ($0.1538/share or $0.1184 Net of all Debts). They also have unsold Properties @ $15.3Mil (1.82ct/share) & Development Properties @ $64.3Mil (7.64ct/share). BUT, I don't think it's likely they'll pay out the cash as a Special Dividend. Most likely, it'll be used for acquiring new land for their Property Biz + Development Expenses.

Yes, my initial analysis is as simple as that. I could identify with their biz as I'm a regular customer for my kids' school stuff (text books, stationery,... a one-stop shop for me). That's the KEY (which I'm still trying) to apply to my stocks selection - Focus on biz I can understand. What attracted me back to Popular (I was vested long ago but divested when they went into Property biz as I was fearful of companies that diworseify) was the huge cash plus low debts in their latest financials. If I were to search for a financial ratio to justify my action, it'd likely be a hybrid form of NCAV Hee...

As I posted and shared in this forum, what others posted triggered me to search further and understand more eg. why Old Man was selling his shares during the worst of GFC. I also went to check out Prologue, Epilogue, UrbanWrite and yes, I do agree those biz may close shop due to poor biz. But, this'll not be a very huge impact as Popular is not just a 1-2 shops biz but rather, a total of 60+ each in Singapore and Malaysia plus other smaller biz. With Old man switching from selling mode to buying mode, I also got more and more confident to 'follow'.

Having said that, there's a potential negative to their coming Q4 results. It's seasonally the weakest and they may slip into a loss (Q4 EPS) if they decide to do some 'Impairment' to their Properties like SC Global (but Popular Condo sells at a lower price range as compared to SC' super hi end, so, any write-down may not be as huge). Still, that's a non-cash item and will not impact their cash hoard.

Warning : My analysis is always overly simple and I'll usually react very fast (eg. suddenly sell everything and not post here) when new info becomes known to me either from SGX Annc or by some kind sharing from others here. So, don't follow me blindly, pls do your own research!

*Keep my fingers crossed*

(22-05-2012, 10:54 AM)KopiKat Wrote: [ -> ]Warning : My analysis is always overly simple...

Let me try to beat u in simplicity of analysis (in a race to the bottom?).

Every Nov for a number of years already, I receive this greeting from Popular:



Minor issue: my birthday is NOT in November or anywhere near there. Greeting is also addressed to a name that is NOT mine. But the email address is correct. The 1st time I received it, I replied to inform them of this. Nevertheless, I keep receiving the same greeting in Nov every year addressed to the same name.

A Peter Lynch type of observation/analysis?

hope i don't rain on anyone's parade

(22-05-2012, 01:18 PM)swakoo Wrote: [ -> ]

(22-05-2012, 10:54 AM)KopiKat Wrote: [ -> ]Warning : My analysis is always overly simple...

Let me try to beat u in simplicity of analysis (in a race to the bottom?).

Every Nov for a number of years already, I receive this greeting from Popular:

Minor issue: my birthday is NOT in November or anywhere near there. Greeting is also addressed to a name that is NOT mine. But the email address is correct. The 1st time I received it, I replied to inform them of this. Nevertheless, I keep receiving the same greeting in Nov every year addressed to the same name.

A Peter Lynch type of observation/analysis?

hope i don't rain on anyone's parade

you should ask them to change to your name and birthday. maybe they will send you a free 3 years membership card someday

(22-05-2012, 01:18 PM)swakoo Wrote: [ -> ]

(22-05-2012, 10:54 AM)KopiKat Wrote: [ -> ]Warning : My analysis is always overly simple...

Let me try to beat u in simplicity of analysis (in a race to the bottom?).

Every Nov for a number of years already, I receive this greeting from Popular:



Minor issue: my birthday is NOT in November or anywhere near there. Greeting is also addressed to a name that is NOT mine. But the email address is correct. The 1st time I received it, I replied to inform them of this. Nevertheless, I keep receiving the same greeting in Nov every year addressed to the same name.

A Peter Lynch type of observation/analysis?

OMG!

How come I didn't rx such Birthday Greetings despite being a member all these years! The mgmt suxx! I go complain during my birthday month if they don't send me one this year! Oops.. just remembered it's registered under my kids' name (cheaper) and I better go chk 1st before I complain.

BTW, is it clickable? I ever got a clickable (not Popular) in an email and when I clicked on it, a pop-up says my 'Flash' needs an update in order to view. When I clicked on that 'very Adobe Flash-like pop-up' fortunately my Computer security pop-up a warning asking me if I wanted to download fm xxx.com site and guess what? xxx.com looks suspiciously like a non-Adobe site (very likely a hackers' attempt to trick me to download some trojan or something!).

Quote:hope i don't rain on anyone's parade

For me, no worries. I'm at different times an investor of our TELCOs and many other cos. even tho' I'd personally experienced service that's very seriously BAD. For many of the local biz, we don't really have any serious alternative provider to switch to and that kind of becomes a 'moat'. Till the day we get serious competitors, I'll swallow my pride and get my revenge by making money out of these less than perfect service providers.

(22-05-2012, 02:02 PM)KopiKat Wrote: [ -> ]OMG!

How come I didn't rx such Birthday Greetings despite being a member all these years! The mgmt suxx! I go complain during my birthday month if they don't send me one this year!

U should. I haven't bought anything from them in years and yet they try to send me birthday greetings...

KopiKat Wrote:BTW, is it clickable?

Yes but the click just brings me to page with image above part of contents - not spammer trying to hijack popular's website.

(22-05-2012, 01:34 PM)shanrui_91 Wrote: [ -> ]you should ask them to change to your name and birthday. maybe they will send you a free 3 years membership card someday

hmm... good idea, maybe i'll get a bonus every year?

(22-05-2012, 01:18 PM)swakoo Wrote: [ -> ]

(22-05-2012, 10:54 AM)KopiKat Wrote: [ -> ]Warning : My analysis is always overly simple...

Let me try to beat u in simplicity of analysis (in a race to the bottom?).

One key difference is, you won't lose any $$ if you're wrong. Not unless you'd been shorting Popular Hldgs shares just because they'd been sending birthday greetings to you on the wrong month and to the wrong person. In that case, I admit total defeat..

(22-05-2012, 09:46 PM)KopiKat Wrote: [ -> ]One key difference is, you won't lose any $$ if you're wrong. Not unless you'd been shorting Popular Hldgs shares just because they'd been sending birthday greetings to you on the wrong month and to the wrong person. In that case, I admit total defeat..

Nope, not vested in any way. I like simplicity. So just thought I would try to outdo you with my swakoo analysis.