Top 100 Companies of KLSE 3.1.2014 (Sorted by P/E)

Top 100 Companies of KLSE 3.1.2014 (Sorted according to P/E)

Rank		Company		Price		PE		DY
68		BJLand		0.82		124.2		1.2
87		Shang		6.78		44.3		1.5
15		SKPetro		4.57		43.6		0
41		Dialog		3.4		42.1		1
13		PetDag		30.4		36.1		3.5
12		IHH		3.91		34.1		0
9		PetGas		23.6		33.2		2.1
28		Nestle		67.96		31.5		3.1
91		TSH		2.92		31.4		0.9
10		DiGi		4.85		31.3		5.4
61		GasMsia		3.95		31.2		3.2
32		Armada		4.08		31		0.7
84		Dayang		5.66		30.5		1.8
97		BJCorp		0.56		29.6		1.8
8		Maxis		7.13		28.9		5.6
96		Kseng		6.73		28.7		1.5
67		Bursa		8.13		28.5		3.3
18		KLK		24.12		28		2.1
69		IGBReit		1.2		26.6		1.5
33		Airport		8.8		26.5		1.5
95		HLCap		10		26.1		0
81		QL		4.1		25.9		1.1
47		F&N		18.4		25.7		3.3
42		GENP		10.98		25.5		1.1
92		Kossan		4.1		25.1		1.4
71		Tchong		5.98		24.7		2
73		KPJ		3.87		24.7		2
85		Dlady		47.3		24.5		5.5
53		MHB		3.61		23.9		2.8
90		IJMPlnt		3.48		23.3		2
75		LPI		17.46		23		3.7
24		BAT		63.88		22.9		4.3
4		Axiata		6.8		22.7		5.1
57		Harta		7.23		22.5		2
63		Aeon		13.64		22.5		1.8
23		PPB		15.92		22.4		1.3
36		UEMS		2.32		22.4		1.3
60		Orient		8.39		22.1		1
62		GAB		15.9		22.1		4.3
70		IGB		2.72		21.8		2.8
88		SOP		6.65		21.5		0.9
46		LAFMSIA		8.41		20.5		4.4
80		Bintulu Port		7.5		20.5		4
86		Pos		5.57		19.7		3.1
49		BIMB		4.38		19.5		2.6
76		Carlsbg		12.24		19.5		5.1
100		Zhulian		4.93		19.4		3.1
43		IJM		5.85		19.2		2.2
35		Gamuda		4.61		18.2		2.6
79		Top Glove		5.73		18.1		2.8
17		GENM		4.38		17.7		2
78		MSM		5.1		17.7		3.7
2		PBBank		18.9		17.1		2.6
39		Bkawan		19.6		16.8		2.8
45		SPSetia		2.95		16.5		3.7
74		IJMLand		2.52		16.4		2
99		CMSB		6.78		16		2.5
26		FGV		4.53		15.9		3.1
55		Utd Plant		26.18		15.9		4.8
7		Pchem		6.84		15.5		3.2
22		TM		5.39		15.3		4.1
6		Sime		9.39		15.2		3.6
30		UMW		12.28		15.1		4.1
50		HapSeng		2.95		15.1		3.6
14		IOICorp		4.58		14.9		3.4
52		Bstead		5.6		13.9		5.8
56		BJToto		4.01		13.8		7
1		Maybank		9.91		13.6		6.6
44		AFG		4.8		13.6		3.5
16		HLBank		14.24		13.5		3.2
89		Media		2.62		13.5		5
20		AMBank		7.29		13.4		3
29		Astro		2.98		13.4		1.3
3		Tenaga		11		13.3		2.3
65		Magnum		3.15		13.3		5.1
5		CIMB		7.51		12.9		3.1
83		Parkson		2.86		12.9		6.3
31		YTLPowr		1.85		12.5		0.5
25		YTL		1.6		12.4		1.6
27		HLFG		15.5		10.9		2.3
21		RHBCap		7.97		10.1		2.8
51		Affin		4.26		10.1		3.5
82		Mah Sing		2.27		9.9		2.7
94		CMMT		1.4		9.9		6
37		MMCCorp		2.85		9.4		1.6
11		Genting		10.08		9.3		0.8
59		DRBHCOM		2.72		9.1		2.2
77		SunReit		1.25		8.9		6.6
64		Sunway		2.75		7.7		1.9
93		UOADev		1.87		7.6		6.4
54		MBSB		2.17		6.8		13.3
72		PavReit		1.32		6.3		5.2
98		WCT		2.14		5.5		1.8
66		Kulim		3.38		5		29.1
48		AirAsia		2.37		3.5		10.1
19		MISC		5.51		0		0
34		KLCC		5.94		0		0
38		WPRTS		2.53		0		0
40		UMWOG		3.91		0		0
58		MAS		0.32		0		0

# Rank is based on market capitalization

Top 100 Companies of KLSE 3.1.2014 (Market P/E is 17.1 and DY is 3.2%)

Top 100 Companies of KLSE 3.1.2014 (Market P/E is 17.1 and DY is 3.2%)

TOP 100 COMPANIES (Market Price on January 3 (RM)
Rank	Company	Shares(m)		Mkt price		Mkt Cap(m)		PE	DY	PAT(m)		Div(m)
1	Maybank	8862.30		9.91		87825.4		13.6	6.6	6457.8		5796.5
2	PBBank	3531.93		18.90		66753.4		17.1	2.6	3903.7		1735.6
3	Tenaga	5643.61		11.00		62079.7		13.3	2.3	4667.6		1427.8
4	Axiata	8540.63		6.80		58076.5		22.7	5.1	2558.4		2961.9
5	CIMB	7729.35		7.51		58047.4		12.9	3.1	4499.8		1799.5
6	Sime	6009.46		9.39		56428.9		15.2	3.6	3712.4		2031.4
7	Pchem	8000.00		6.84		54720.0		15.5	3.2	3530.3		1751.0
8	Maxis	7503.40		7.13		53499.2		28.9	5.6	1851.2		2996.0
9	PetGas	1978.73		23.60		46698.1		33.2	2.1	1406.6		980.7
10	DiGi	7775.00		4.85		37708.8		31.3	5.4	1204.8		2036.3
11	Genting	3719.48		10.08		37492.4		9.3	0.8	4031.4		299.9
12	IHH	8134.97		3.91		31807.7		34.1	0.0	932.8		0.0
13	PetDag	993.45		30.40		30201.0		36.1	3.5	836.6		1057.0
14	IOICorp	6444.29		4.58		29514.8		14.9	3.4	1980.9		1003.5
15	SKPetro	5992.16		4.57		27384.1		43.6	0.0	628.1		0.0
16	HLBank	1879.91		14.24		26769.9		13.5	3.2	1983.0		856.6
17	GENM	5937.48		4.38		26006.2		17.7	2.0	1469.3		520.1
18	KLK	1067.50		24.12		25748.2		28.0	2.1	919.6		540.7
19	MISC	4463.79		5.51		24595.5		0.0	0.0			0.0
20	AMBank	3014.18		7.29		21973.4		13.4	3.0	1639.8		659.2
21	RHBCap	2546.91		7.97		20298.9		10.1	2.8	2009.8		568.4
22	TM	3577.40		5.39		19282.2		15.3	4.1	1260.3		790.6
23	PPB	1185.50		15.92		18873.2		22.4	1.3	842.6		245.4
24	BAT	285.53		63.88		18239.7		22.9	4.3	796.5		784.3
25	YTL	10738.93		1.60		17182.3		12.4	1.6	1385.7		274.9
26	FGV	3648.15		4.53		16526.1		15.9	3.1	1039.4		512.3
27	HLFG	1052.77		15.50		16317.9		10.9	2.3	1497.1		375.3
28	Nestle	234.50		67.96		15936.6		31.5	3.1	505.9		494.0
29	Astro	5198.30		2.98		15490.9		13.4	1.3	1156.0		201.4
30	UMW	1168.29		12.28		14346.6		15.1	4.1	950.1		588.2
31	YTLPowr	7176.08		1.85		13275.7		12.5	0.5	1062.1		66.4
32	Armada	2931.59		4.08		11960.9		31.0	0.7	385.8		83.7
33	Airport	1232.44		8.80		10845.5		26.5	1.5	409.3		162.7
34	KLCC	1805.33		5.94		10723.7		0.0	0.0			0.0
35	Gamuda	2292.32		4.61		10567.6		18.2	2.6	580.6		274.8
36	UEMS	4537.44		2.32		10526.8		22.4	1.3	469.9		136.8
37	MMCCorp	3045.06		2.85		8678.4		9.4	1.6	923.2		138.9
38	WPRTS	3410.00		2.53		8627.3		0.0	0.0			0.0
39	Bkawan	435.95		19.60		8544.6		16.8	2.8	508.6		239.2
40	UMWOG	2162.00		3.91		8453.4		0.0	0.0			0.0
41	Dialog	2451.67		3.40		8335.7		42.1	1.0	198.0		83.4
42	GENP	758.85		10.98		8332.1		25.5	1.1	326.7		91.7
43	IJM	1413.59		5.85		8269.5		19.2	2.2	430.7		181.9
44	AFG	1548.10		4.80		7430.9		13.6	3.5	546.4		260.1
45	SPSetia	2458.71		2.95		7253.2		16.5	3.7	439.6		268.4
46	LAFMSIA	849.70		8.41		7145.9		20.5	4.4	348.6		314.4
47	F&N	365.16		18.40		6718.9		25.7	3.3	261.4		221.7
48	AirAsia	2781.03		2.37		6591.1		3.5	10.1	1883.2		665.7
49	BIMB	1493.51		4.38		6541.6		19.5	2.6	335.5		170.1
50	HapSeng	2205.00		2.95		6504.8		15.1	3.6	430.8		234.2
51	Affin	1494.58		4.26		6366.9		10.1	3.5	630.4		222.8
52	Bstead	1034.18		5.60		5791.4		13.9	5.8	416.6		335.9
53	MHB	1600.00		3.61		5776.0		23.9	2.8	241.7		161.7
54	MBSB	2621.80		2.17		5689.3		6.8	13.3	836.7		756.7
55	Utd Plant	208.13		26.18		5448.9		15.9	4.8	342.7		261.5
56	BJToto	1351.03		4.01		5417.6		13.8	7.0	392.6		379.2
57	Harta	745.64		7.23		5391.0		22.5	2.0	239.6		107.8
58	MAS	16710.78		0.32		5347.4		0.0	0.0			0.0
59	DRBHCOM	1933.24		2.72		5258.4		9.1	2.2	577.8		115.7
60	Orient	620.39		8.39		5205.1		22.1	1.0	235.5		52.1
61	GasMsia	1284.00		3.95		5071.8		31.2	3.2	162.6		162.3
62	GAB	302.10		15.90		4803.4		22.1	4.3	217.3		206.5
63	Aeon	351.00		13.64		4787.6		22.5	1.8	212.8		86.2
64	Sunway	1723.52		2.75		4739.7		7.7	1.9	615.5		90.1
65	Magnum	1437.75		3.15		4528.9		13.3	5.1	340.5		231.0
66	Kulim	1294.05		3.38		4373.9		5.0	29.1	874.8		1272.8
67	Bursa	532.61		8.13		4330.1		28.5	3.3	151.9		142.9
68	BJLand	5024.37		0.82		4120.0		124.2	1.2	33.2		49.4
69	IGBReit	3422.62		1.20		4107.1		26.6	1.5	154.4		61.6
70	IGB	1490.30		2.72		4053.6		21.8	2.8	185.9		113.5
71	Tchong	672.00		5.98		4018.6		24.7	2.0	162.7		80.4
72	PavReit	3009.68		1.32		3972.8		6.3	5.2	630.6		206.6
73	KPJ	1025.59		3.87		3969.0		24.7	2.0	160.7		79.4
74	IJMLand	1558.85		2.52		3928.3		16.4	2.0	239.5		78.6
75	LPI	221.32		17.46		3864.3		23.0	3.7	168.0		143.0
76	Carlsbg	308.08		12.24		3770.9		19.5	5.1	193.4		192.3
77	SunReit	2923.69		1.25		3654.6		8.9	6.6	410.6		241.2
78	MSM	702.98		5.10		3585.2		17.7	3.7	202.6		132.7
79	Top Glove	620.53		5.73		3555.6		18.1	2.8	196.4		99.6
80	Bintulu Port	460.00		7.50		3450.0		20.5	4.0	168.3		138.0
81	QL	832.02		4.10		3411.3		25.9	1.1	131.7		37.5
82	Mah Sing	1413.61		2.27		3208.9		9.9	2.7	324.1		86.6
83	Parkson	1093.90		2.86		3128.6		12.9	6.3	242.5		197.1
84	Dayang	550.00		5.66		3113.0		30.5	1.8	102.1		56.0
85	Dlady	64.00		47.30		3027.2		24.5	5.5	123.6		166.5
86	Pos	537.03		5.57		2991.2		19.7	3.1	151.8		92.7
87	Shang	440.00		6.78		2983.2		44.3	1.5	67.3		44.7
88	SOP	438.20		6.65		2914.1		21.5	0.9	135.5		26.2
89	Media	1100.46		2.62		2883.2		13.5	5.0	213.6		144.2
90	IJMPlnt	802.23		3.48		2791.8		23.3	2.0	119.8		55.8
91	TSH	903.83		2.92		2639.2		31.4	0.9	84.1		23.8
92	Kossan	639.47		4.10		2621.8		25.1	1.4	104.5		36.7
93	UOADev	1339.78		1.87		2505.4		7.6	6.4	329.7		160.3
94	CMMT	1772.82		1.40		2481.9		9.9	6.0	250.7		148.9
95	HLCap	246.90		10.00		2469.0		26.1	0.0	94.6		0.0
96	Kseng	362.09		6.73		2436.9		28.7	1.5	84.9		36.6
97	BJCorp	4299.56		0.56		2407.8		29.6	1.8	81.3		43.3
98	WCT	1092.46		2.14		2337.9		5.5	1.8	425.1		42.1
99	CMSB	339.70		6.78		2303.2		16.0	2.5	144.0		57.6
100	Zhulian	460.00		4.93		2267.8		19.4	3.1	116.9		70.3

1 billion = 1000m Total Market Cap (RM m) 1,404,453.40 1,404.5  billion Total Market Earnings (m) 81,920.85 81.9 billion Total Market Dividends (m) 44,611.00 44.6 billion Market PE 17.1 Market DY 3.2% Market Earnings Yield 5.8% My thanks to Amy for the hard work.

Asking the ONE most important question: How much cash can be generated from the business?

Asking the ONE most important question: How much cash can be generated from the business?

If a businessperson is asked about what goes into consideration when purchasing a business, the number one answer should be:

How much cash can be generated from the business?


Other answers, though important, are of secondary importance, such as:

What is the business worth?
Who is the biggest competitor?
What is motivating the seller of the business?


Therefore, the businessperson when purchasing a business should examine the business aspects of his investments.  This involves looking at:

1.  the income statements
2.  the capital reinvestment requirements, and
3.  the cash generating capabilities of the business or investments.

The only 2 classes that an investment student needs to take

Buffett believes that investment students need only two well-taught classes:

1.  How to Value a Business?

2.  How to Think about Market Prices?

Return on Equity (ROE) - the financial metric that investors should use to judge a company's annual performance

Buffett considers earning per share a smoke screen.

Most companies will retain a portion of their previous year's earnings as a way to increase their equity base.

Warren Buffett believes there is nothing spectacular about a company that increases earning per share by 10% if, at the same time, the company is growing its equity base by 10%.

He says this is no different than putting money in a savings account and letting the interest accumulate and compound.

Buffett prefers return on equity to earnings per share when analyzing a company.

He will make appropriate adjustments to the reported earnings to give a clear picture of how returns were generated as a return on business operations.

Buffett believes a business should achieve good return on equity while employing little or no debt.

Most investors judge annual performance by focusing on earnings per share.

According to Buffett, the proper way to judge a company's performance is though focusing on return on equity.

Return on equity is a better measure of annual performance because it takes into consideration a company's growing capital base.

Buffett uses ROE as his preferred financial metric to judge a company's annual performance; investors should do likewise.

The question of how to allocate profits is linked to where a company is in its life cycle

One of the most important decisions management makes is how to allocate profits.

The decision of what to do with earnings is linked to where a company is in its life cycle.

The question of how to allocate profits is linked to where a company is in its life cycle.

1.  Development Stage

In the development stage, a company loses money as it develops products and establishes markets.

2.  Rapid Growth Stage.

The next stage would be rapid growth, in which a company is profitable but growing so fast that it may need to retain all earnings and also borrow funds or issue equity to finance this growth.

3.  Maturity and Decline

In later stages, maturity and decline, a company will continue to generate excess cash, and the best use of this cash may be allocating it to shareholders.

My equity bond (Nestle)

Nestle Malaysia

Latest after-tax ttm-EPS is $2.39 per share

Nestle's underlying earnings are so consistent.

And Nestle is growing its earnings at about 8% per year.

A company with a durable competitive advantage, over time, the stock market will price the company's equity bonds or shares at a level that reflects the value of its earnings relative to the yield on long-term risk free interest rate.

Capitalized at the risk free interest rate of 3.5%, Nestle's after-tax earning of $2.39 per share is worth approximately $68.30 per equity bond/share.  ($2.39/3.5% = $68.30).


Here is a difference worth noting. 

Nestle is worth $68.30 per share  and it is trading today at around $68.00.  Therefore, for the Graham-based value investors, who wants to buy only at $40 per share, Nestle is not "undervalued"

But for those who are willing to apply their reasoning or thinking cap, just take a look at this scenario.

1.  You are being offered a relatively risk-free initial after-tax rate of return of 3.5% today when you buy at $68.30 sen per share.

2.  This after-tax rate of return is expected to increase over the next 20 years at an annual rate of approximately 8% per year.

3.  Then ask this question:  Is this an attractive investment given the rate of risk and return on other investments?

4.  What other attractive investment give the rate of risk and return of this nature?




I bought a long time ago at $10.20 per share

Thus, Nestle is my equity bond or share that is currently giving an after-tax yield of 23.4% ($2.39 / $10.20 = 23.4%) that is relatively risk-free and which is expected to increase over the next 20 years at an annual rate of approximately 8%. 

The Great, Good and Gruesome Businesses of Buffett

Buy good quality companies with durable competitive advantage and trustworthy managers and holding them for the long term. Just buy them at fair or bargain prices and never at high prices.

"It is better to own the great companies at good prices, than the good companies at great prices."

Here is a nice table summarizing the great, good and gruesome companies according to Buffett.

Let me give you some pointers:

1. Select a small cap stock.

2. The one that you have the confidence that it will grow its revenues and earnings for many many years to come.

3. The one with some durable competitive advantage (it can be difficult in early years to notice or identify this).

4. Get into this early.

5. Continue to monitor its performance.










Yes, you can hold for the long term too.

For this you need to assess its quality (both qualitative and quantitative, and the management).

Don't be too focus on the price of the shares (the least important in your assessment).

The Magic of Compounding - Buffett's story

Wealth takes time.

Charlie Munger, Warren Buffett's investing partner, put it best: "You don't have to be brilliant, only a little bit wiser than the other guys, on average, for a long, long time."
 
Warren Buffett is a great investor, but what makes him rich is that he's been a great investor for seven decades. Of his current $60 billion net worth, $59.7 billion was added after his 50th birthday, and $57 billion came after his 60th. If Buffett started saving in his 30s and retired in his 60s, you would have never heard of him. His skill is investing, but his secret is time.
 
Understanding the value of time is the most important lesson in all of finance. The single best thing we can do to improve the financial state of Americans is encourage people to save from as early an age as possible.




Buffett's wealth

For this discussion:  1 billion = 1,000 million.

He was born on 30th August 1930.

2014  Age 83  - $60 billion net worth

1990  Age 60 -  $ 3 billion net worth.

1980  Age 50 -  $0.3 billion or $300 million net worth



1980 - 1990
CAGR 25.89% over 10 years


1990 - 2014
CAGR 13.29% over 24 years

A billion is equal to how many million?

Answer:

In the 'short scale' a billion is 1000 million. The short scale is the system officially used in the USA, the UK and most English-speaking countries. 

In the 'long scale' it is a million million. More or less the rest of the world supposedly uses this terminology.

One million (1,000,000) or one thousand thousand.
One billion (1,000,000,000) or one million thousand.    

1. The cardinal number equal to 10⁹.
2. Chiefly British The cardinal number equal to 10¹²

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