2-2.50 for vicom might happen if a deep recession happens or the company split shares
I believe that a certain level of liquidity discount is being applied to VICOM previously and i am willing to take on this discount since I will be holding on to it for the long term and it's money that's I will not be likely using for any purpose. Low liquidity implies the inelasticity of both demand and supply curve. If demand increases, price will rise faster. The contrary is true should demand falls.
The reason for their rise and rise nature is their >20% ROE and their constant profit growth. Backed with strong moat (mandatory vehicle inspection, beer and Stout, Brand's essence of chicken), their profits are rather stable and preditable. Years after years, equity will increase and so will their profit with their >20% ROE. This is why ROE can be a very important consideration for a long-term investment
Vicom, APB and Cerebos are companies that fit perfectly with the tenants of value investing, i.e. wide moat, predictable business, high margins, good free cash flow, etc. Thus, the price will be increasing as these companies are in demand among long-term investors. The only wonderful time to buy these companies undervalued will be during a major crash like during 2008-2009. Till then, those who are yet to invest in these companies, can only sit on the sidelines and watch these companies. The prices of these companies will surely drop during a recession due to market sentiments. I'm one of them who's closely watching these companies to invest in should the prices crash.
(12-02-2012, 12:20 PM)Bibi Wrote: [ -> ]2-2.50 for vicom might happen if a deep recession happens or the company split shares
I don't buy when price is not right!
Look further back than just 2008-2009. They were cheaper when being unknown and doing not as well.
I was hoping that Cerebos price will crash when they announced 30% decrease in profit the FY, but apparently it did not and is now almost at its 52 weeks high.
If Cerebos crashed, then there must be something more than 30% decrease in profit. i think it was reported due to mainly Thailand one off massive flood.
Not vested.
it was due to Taiwan's health scare and Thailand's flood. I think Thailand is their biggest market for the group. They also faced a small amount of translational loss
Vicom seems determined to stay above $4.
As I'm new here, can anyone enlighten me what is the difference between bonus issue vs stock split and how does it benefit/disadvantaged shareholders?
Thanks alot..
I'm also a follower of FFNow blog and got to discover some companies mentioned by him like OKP.
Awaiting for their results this Wednesday.
bonus issue is when a company issues bonus share like 500 bonus share for every 1000 shares. Stock split is when your shares just got multiplied like 1000 shares will become 2000 shares. Essentially you will not get extra money from it since market price will adjust accordingly to the split.
Such move usually occurs when the price of a stock is too high that the company thinks that this will not be able to attract investors of smaller sum of money. Liquidity will improve and so supposedly the price is going to increase a bit as investor will feel that they get more.
There's a analogy that goes no matter how many slices you cut a pizza into, you will still only have a pizza. I think it's the story of Yogi Berra who was asked whether he wanted to cut his pizza into 4 slices or 8 and he says he cannot eat eight.
Thus, Warren Buffett never split his Berkshire Hathaway(around 110k now) for he don't see the logic other than letting investor having a feel-good feeling and attracting "inferior" shareholder.
(12-02-2012, 12:54 PM)donmihaihai Wrote: [ -> ] (12-02-2012, 12:20 PM)Bibi Wrote: [ -> ]2-2.50 for vicom might happen if a deep recession happens or the company split shares
I don't buy when price is not right!
Look further back than just 2008-2009. They were cheaper when being unknown and doing not as well.
Yes yes, what goes up will come down. Its just a matter of time.