Vicom remain as a promising stock in my watch list. No doubt it is a good stock with consistent growth, free cash flow, but the price is never right for me.
Base on DCF valuation, with following parameters
- discount rate of 10%
- FCF in 2011 as 19 Mils with 11% growth for next 5 years
- Terminal value at the end of the 5 years @ 15x FCF
The valuation is approx $4.5 per share, which is the current market price
There is no margin of safety...
any comments?
Why did u assuming terminal value at end of 5 yrs at 15x FCF ?
(11-08-2012, 07:16 PM)ValueFund Wrote: [ -> ]Why did u assuming terminal value at end of 5 yrs at 15x FCF ?
It is not assumption, rather an estimation
At the moment, the historical PE of Vicom is more than 15x. If Vicom continue to do well in 5 years time, it should be valued around the same PE. So it is a reasonable estimation for 15x FCF (on the optimistic side) as terminal value.
There are other estimation method of terminal value base on perpetuity rate, but i will rather take a simpler method.
IMO, you may already noticed that the DCF valuation is base the optimistic parameters, which mean the current market price of Vicom is at the upper side of its fair value.
Checked my bank account today and was very happy to note that VICOM's interim dividend of 7.5c/share has been credited in! It's a nice way to end the month of August, and this dividend shall be saved into my cash stash to be deployed when I see appropriate opportunities.
Unfortunately, it's not really a lot of money so I will not be taking my family out for a meal this time with this dividend.
This will be great for VICOM if it really becomes an industry-wide practice
新法令明天生效 零售业者接“柠檬”手法各异
（2012-08-31）
新加坡车业公会会长梁添丁受访时说：“很多二手车商目前是靠多年的修车经验来辨识汽车哪里有问题，有些是能靠经验或肉眼辨识，有些则需要仪器才能检验出来。我们鼓励会员把二手车送交维康或STA检验，以防万一，顾客买的时候也比较放心。”
据了解，目前汽车检验费是168元，若每辆二手车都送去检验，商家成本相信会加重。维康汽车检验中心已表示会给予新加坡车业公会会员10%的折扣。
http://www.zaobao.com.sg/sp/sp120831_011.shtml
(vested)
Its true. Svta has a proposed checklist but frankly a lot of car dealers will use a workshop of some sort instead of vicom because a certification provides no insurance.
Second hand cars in theory will get more expensive to factor in the lemon law loading (at least i know my dealership will charge more).
But overall prob positive news.
(31-08-2012, 04:21 PM)shanrui_91 Wrote: [ -> ]This will be great for VICOM if it really becomes an industry-wide practice
新法令明天生效 零售业者接“柠檬”手法各异
（2012-08-31）
新加坡车业公会会长梁添丁受访时说：“很多二手车商目前是靠多年的修车经验来辨识汽车哪里有问题，有些是能靠经验或肉眼辨识，有些则需要仪器才能检验出来。我们鼓励会员把二手车送交维康或STA检验，以防万一，顾客买的时候也比较放心。”
据了解，目前汽车检验费是168元，若每辆二手车都送去检验，商家成本相信会加重。维康汽车检验中心已表示会给予新加坡车业公会会员10%的折扣。
http://www.zaobao.com.sg/sp/sp120831_011.shtml
(vested)
Thanks to Google Translate that I could read this article in English!
Vicom's market price keep raising, from previous high of $4.5 to almost $5 now, with a tiny volume of 10 lots today
Vicom is a good stock but IMO at $5, it is over-value.
VICOM has always been on my radar screen since $3.50. But I have never taken the plunge as the price has not been attractive, IMO. Guess I miss the boat.
(11-09-2012, 05:01 PM)Share Investor Wrote: [ -> ]VICOM has always been on my radar screen since $3.50. But I have never taken the plunge as the price has not been attractive, IMO. Guess I miss the boat.
Same for me. VICOM is in my watch list, but the price is never right since day 1