ThaiBev – What really matters in a Stock

Established in 2003 (Merging of all 58 companies) | 63 Subsidiaries  | Spirits , Beer , alcoholic drinks and food |

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 4.49 (3.39 times overvalued of its actual value)
  • Price to earning ratio :  21 (Growing below industry standard – 24.465)

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity : 38.6 %  – Better than F&N (434.7%)
  • Growth Performance : 20.19% – Better than F&N (-21.96%)
  • Current Ratio : 1.527 (F&N is at 3.605)
  • Cash flow per share : 0.0473 ( You’re paying 21 Bhat)
  • Good management ability ( Constant dividend growth | Positive net income/gross profit margin | Reduced in financing | Overall a positive cash flow |)screen-shot-2016-12-25-at-3-12-37-pmscreen-shot-2016-12-25-at-3-12-31-pm

3) Technical Analysis

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Sg.Fiance – Max Chart (Pricing in SGD)

Overall market trend is on the bull(UP) side, as market clearly shows higher highs and higher lows. Current market highest high is at $1.055, if this level is broken market has a higher odds to trend higher and longer. Additionally, market is finding demand for its stocks as market heads to key level $0.75.

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Sg.Finance – 1 Year Chart ( Pricing in SGD)

Market has a short-term bear (down) trend as it continues to market lower high and lower low. It is currently testing gap level, market could either find demand at its current level $0.85 (Unlikely) or $0.75.

4) Would I be vested into it??

Yes…. as the title said. Compared to F&N, it is growing at a better rate even though current ratio is poorer. I’ll be planning to buy in two tranches, one now and another at 0.75.

Below are some reads that you might be interested.

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2016 Reflection ( Introduction to Value Structure)

This is will be a short post as I’m getting lazier for christmas and new year

The initial start of this blog was basically to track what I’ve learnt throughout the year…. Have I achieve anyone of it?

I guess so…

There were so much things that I thought I’ve could accomplish  (Learning)… for example I actually had thought of expanding my knowledge into writing, business management, arts … You would have probably read about it here.

Would I called that a failure??

NO! too optimistic??? I’ve always be a realist and never believe education is about a destination… but you never studied what you are supposed to???…. are you doing irrational justification?

Value structure

What I’ve learn about value structure recently have reshaped my understanding of “How you do something is how you do everything”.  I.E : When you’re doing what you love (trading /financials – for me), you tend to put in A GREATER amount of energy and concentration into it as compare to something you don’t love doing (sweeping the floor).

Does that mean I don’t love learning?

NO! It basically means I have to shift my choice of learning topic to what I love… Should you really learn all that it is out there or those that are applicable to you?

I have no answer to that… I believe that is a personal journey for everyone

Courts – What really matters in a Stock

Everybody knows this brand means good?

Listed on SGX 2012 | Indonesia, Malaysia & Singapore | 1.3 million Home Club members

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 0.789 (21.1% below fair value)
  • Price to earning ratio : 9.664 ( Growing below industry standard at 13.45 – but still better than Challenger)

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity : 110% ( High reliance on financing – 4,583 worst than Challenger)
  • Growth Performance : -25.13% ( Better than Challenger – growth rate is 1.8%)
  • Current Ratio : 2.664 (lower than Challenger by 0.95)
  • Cash flow per share : 0.0711 ( Challenger is at 0.56)
  • Weak management ability ( Reduction in dividend | Negative net income margin growth | reducing gross profit margin | Increased in financing | Still making losses on their investment)screen-shot-2016-12-19-at-9-58-43-amscreen-shot-2016-12-19-at-9-58-38-am

3) Technical Analysis

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Sg.finance – Max Chart

Overall Market trend looks on the bearish side as stock tries to seek greater demand in 2016. Market has been bearish for 3 years straight! It has currently broke its earlier downfall in 2015.

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Sg.finance – 1 Year Chart

Currently, on the short-term trend of this stock would be on a bull (Up) side as market is still making higher highs and higher lows. Market currently has a higher probability to continue its short-term trend if it breaks the $0.465 high, if it fails to do so, market have a greater possibility to reverse even lower.

4) Would I be vested into it?

As of now, the answer would be a strong NO. Currently, I have a better winning probability in Challenger than I would have in Courts.

Some news for you read:

“+1 knowledge point”

InvestingNote – An investor’s dream

what honestly could be better than this a social network of experts?

A social space where every individual can share and learn more about a particular stock.

So how great is it? – 3 Main features that will blow your mind

1) Event Calendar – Fully automated!! (Everything is keyed inside it)

It includes companies AGM/EGM, corporate actions and result release. These are the times where stock prices are volatile, which means, allowing you to purchase them at a cheaper price or these are the times where are trader could liquidate their positions.

2) Charts  – Drawable ( Allows you to put your preferred indicators)

Have you tried finding for a FREE stock charting software before? – if you have, like me, you will definitely love this.

What’s so special about their charting software – Its by Tradingview (One of the best I’ve used). It allows you to do Full Screen, Draw lines, write words, Place almost all the indicators out there in the world, draw risk to rewards ratios and they allow you to create a watch list. The watch list is a bonus feature for me, which I think is really helpful for many, could you imagine if you have a portfolio worth $500k? or even 100k? where you have positions in almost 10-20 stocks?

3) Investing Academy  – Learn while using the platform

The investing academy is opened for all users to learn about the different strategies (Technical & Fundamental) and Mindset….all for FREE!!!!…How i wish this platform was available to me earlier.

All in all, it is currently one of the best platform that I’ve used and I would highly recommend everyone to use it. I’ve just uploaded my first market estimate, where you can see! Currently I have 0 followers LOL. Please follow me:( – Clive Ryan

“+1 Knowledge point”

How much stocks should I buy?

When/what is sufficient for me?

Recently I’ve been asked by a Friend on how much should he be investing if he has $20,000…..

My question back to him is this… What kind of life do you truly want to live in the next 20-30 years ?

The fundamental question that everybody tends to neglect or thinks that he/she has the answered to it.

In order to know how much stocks you should buy/invest, you need to have the answers to these 3 questions.

1) What are your current spending habits? – Both fixed and variable expenses (% of your salary)

For e.g : You currently take home $2k a month and spend $1k (50%) of it on phone bill, food, transportation, housing loan and groceries.

The value in understanding how your money is being spent will allowed you to find areas where you can cut them down.

For e.g :  Knowing that you spend $200 (10%) on food, you can make a conscious effort to change a $5 per meal to a $4 -3.50 per meal.

2) What is the meaning behind investing?

The preconceived notion of investing has been about earning big money to have a super comfortable life in the future, but I believe there’s a deeper meaning to it.

For e.g : Through investing, you will tentatively allocate a % of your salary to invest or to even save for your “retirement/future” plans. This process itself forces you to not spend over a certain % yet forces you to live a certain lifestyle. To think deeper, the lifestyle that we “force” ourself to be living has a greater meaning as compared to our “lavish/ billionaire” lifestyle that we used to have (When we are not forcing/saving/investing). Hence, that is why we are still doing it or learning to create one.

3) What is diversification of asset?

As the word is, diversification, is to divide your money/assets evenly to reduce the risk of losing it all due to volatility and unforeseen circumstances. This is important as shared previous on when should we buy more shares, about how dangerous the gamber’s fallacy is.

FunFact: Do you know if you would to split half of ur money into stocks and the another half into bonds it is NOT A BALANCED PORTFOLIO?  As stocks are riskier by nature, you are actually facing a ratio of 3:1 (Meaning 3 to stocks and 1 to bond) of your total invested capital.

Ideally what we should hope to seek a balance portfolio that will make us feel less stressed yet at the same time…. rewarding!

“+1 knowledge point”

Challenger – What really matters in a Stock (It’s a buy!)

finally all the wait has paid off….

Establish in 1984 | 47 Stores | 500,000 loyal members | 12 years of paying dividend (searchable)

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 1.997 ( 99.7% above fair value)
  • Price to earning ratio : 8.99 ( Growing below Industry average at 13.45)

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity : 2.8% ( Low reliance on financing)
  • Growth Performance : 1.8% ( Better than Courts – growth rate is at -25.13%)
  • Current Ratio : 3.552 (Higher than Courts by 0.95)
  • Cash flow per share : 0.56 ( Courts is at 0.0711)
  • Average management ability ( Constant growth in dividend | Weak net income margin growth | healthy gross profit margin | Able to recover from a negative cashflow in the previous year | Still making losses on their investment)screen-shot-2016-12-11-at-2-46-56-pmscreen-shot-2016-12-11-at-2-46-51-pm

3) TECHNICAL ANALYSIS

Screen Shot 2016-12-11 at 4.51.29 pm.jpg

Sg.Finance – Max Chart

Currently market is heading to 2012 level where it is testing market support at $0.37. There are obvious two ways the market can go, which is to continue current short term trend where it is making lower highs and lower lows, or, it would be able to find stronger demand by institutional investor (probably Caledonia investment) and break to the long side.

Screen Shot 2016-12-11 at 4.51.58 pm.jpg

Sg.Finance – 1 Year chart

Market on the 1 year seems to be making higher highs and lows overall. Current market price action is consolidating (seeking demand) before heading to the right direction. Market has been respecting $0.44 very tightly as it tries breaking the area for 3 times and it failed. This add additional winning probability to this investment (Short-term).

4) Would i be vested into it?

Yes!! Currently market has a higher probability to reverse to the upside (Short-term) and the company is financially healthy for me to seek long-term growth. The next worry would be how much should I be vested in??

Here are some articles (Fundamental analysis) for your read:

 

“+1 knowledge point”

“+1 PI”

When should you buy more shares?

Apologies for the missing photos and missing post the past week as I have just came back from a holiday in Thailand

As you would have seen the increasing amount of articles on how Singapore’s stocks prices are dropping like grapes… it leaves us to two questions

1.SHOULD WE SELL OUR POSITIONS?

This question allows you to reflect on your understanding of your stock holdings (Why you purchase it initially?). Ideally (If you did not buy it through a “gambling” methodology), we will be seeking to learn more about the company and finally, having a strong financial justification on whether we should hold/sell our position.

2.SHOULD WE BE MORE VESTED INTO OUR POSITIONS?

Majority of the time after the first question is answered with a “Hold”, we would be thinking of buying more instead of holding…. is that really a right thing??….. Do we really know whether if the price of the shares will go further down? or will it actually go back up?

Some might say that this is a millionaire question

What we all need to really understand is the law of large numbers [after understanding diversification of assets]. The law of large numbers is a principle of probability according to the frequencies of events with the same likelihood.

To understand more about the law of large numbers – Click here & Here

How then should we go about utilising this knowledge? – The only thing we have to do is to increasing our winning probability, but in order to improve we first have to have a “sample” of our methodology.

What does that mean?  – it means taking record of historical trades and to average out the number of winners against the losers. After this step, you will then have a probability that tells you how “good” your methodology is.

Some pointers to note is that :

Your winners might be lesser than your losers but you can be still be profitable. This can be due to your exit strategy on your investment.

To clarify this point : you purchase the stock at $1 and have a wining exit strategy at 52 weeks high of $5, which gives you a profit of $4 and a losing exit strategy at 10 weeks low of $0.80, which gives you a loss of 20 cents.

In a “down turn” we might fall into the gambler’s fallacy where we over invest and in a “up turn” where we might over purchase (Assets being overexposed). I’ll end this post with an example of how powerful law of large number is.

John currently holds 1,000 units of smelly banana stocks ( purchased at $1.50) and he currently have $5,000 worth of cash. As stock price of smelly banana dropped to $1, he felt the intense pressured (gambler’s fallacy) where illogical justification of ” this is the best stock / time to risk it all / this stock has all the potential ” he decided to purchase $5,000 worth of shares (all his money). He ended up losing all his money (very clinche ending). [ Assuming smelly banana is a stable company ]

What if he knew about the law of large numbers? – John has kept a record of his past investment and a has strong understanding of his winning probability (60%) and the power of asset diversification. He would find 5 similar priced and strong company as smelly banana. This would give him 5 independent chances of winning each at 60%. Additionally, to top that he has a winning and losing exit strategy of $4 profit and 20 cent loss…. he would soon be a millionaire wouldn’t he???

I honestly don’t know where my china photos have went to…. but here are some photos of Thailand I recently went.