Keppel Limited

[owq]

OWQ personally I would never fire a manager who has done well. 8% yield is a decent rate of return.

M1 has decades of consumer growth factored into their customer share of the market. Singapore's population will only get bigger together with the global population. 

I can easily point out to you companies giving even dividend payouts of 13%. Personally I would never trade stable long term returns for get rich quick schemes.

As my mentor the great value investor once said, "Buying a great company at a good price sure beats buying a good company at a great price."

Sure, let's suppose 8% is a decent rate of return. But as a holding in Keppel, is it good enough? Considering the cost of capital, (from their 2014 report, WACC was 6.45%), the net return may not be that great. I could just buy M1 myself. I don't need Keppel to hold it unless it has some sort of synergy with their core businesses. Is Keppel a Berkshire Hathaway...? But personally I don't see their diversification strategy in a good light.

Comparing apple to apple.

ROE wise, Keppel (14%) is much worst than M1 (43%). Historical earning yield wise, Keppel (PE 6) is better than M1 (12), but forward earning yield is telling different story. Furthermore, we should consider cash earning yield. Quality of earning for M1 is 1.3, while Keppel is negative.

(not vested)

That is from outside investor point of view. From Keppel point of view, holding M1 only gives them 8% earnings yield (being conservative here and assuming no growth). Also have to consider their cost of capital. It is a drag on their ROE, if they can find better investments.

Hope I didn't make any wrong assumptions. Still learning about valuation. Please correct me if I'm wrong.