myinvestingnotes.blogspot.my (Bullbear Buffett Stock Investing Notes)

Keep INVESTING Simple and Safe (KISS) ****Investment Philosophy, Strategy and various Valuation Methods**** The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It’s true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!****Warren Buffett: Rule No. 1 - Never lose money. Rule No. 2 - Never forget Rule No. 1.

Wednesday, 16 December 2009

Top Glove posts RM65.2m 1Q net profit

The glove sector continues to be resilient and growing strongly. Topglove is the leader in the group. Watch the others too.

Top Glove posts RM65.2m 1Q net profit
Written by Loong Tse Min
Wednesday, 16 December 2009 14:50

KUALA LUMPUR: Latex glove maker Top Glove Corp Bhd whose share price surged Dec 15 on expectations of strong quarterly financial results on Wednesday, Dec 16 posted a 90.9% jump in net profit to RM65.2 million in its first quarter ended Nov 30, 2009.

In its results filing to the stock exchange during the midday trading break, the company attributed the strong growth in earnings to cost-savings measures implemented at all its factories, improvements in product quality, productivity as well as aggressive marketing strategies.

Revenue for the quarter grew 22.3% to RM472.3 million from RM386.1 million in the same quarter a year earlier, with earnings per share rising to 21.94 sen from 11.60 sen. No dividends have been declared for the period under review.

In the notes accompanying the quarterly filing, the company added that its group continues to strengthen its balance sheet and working capital position, currently in net cash position of RM222 million, with RM237.1 million cash in bank as at Nov 30, 2009.

The group also has fully redeemed the bonds outstanding before its maturity date in view of its strong cash flow position. According to the company, its finance cost for current quarter has reduced by 85% to RM400,000 from RM2.7 million in quarter ended Nov 30, 2008.

Going forward, Top Glove said: "The group is confident of continuous growth and good profitable performance in current financial year".

It disclosed that its factory in Klang has commenced installation of 16 new and more advanced glove production lines with completion expected by February 2010.

It has also begun CONSTRUCTION [] of another factory in Klang that will house an additional 16 production lines with target completion by July 2010. It is also installing nine more "latex concentrate centrifuge machines" in Thailand to be ready by January 2010.

The Top Glove group currently has 355 production lines in 19 factories with a capacity of 31.5 billion pieces of gloves per annum. Staff strength stands at 9,100 employees.

At 2.30pm, Top Glove was trading unchanged at RM9.53 with 400,700 shares changing hands.

http://www.theedgemalaysia.com/index.php?option=com_content&task=view&id=155812&Itemid=79

Top Glove Q1 net almost doubles
Published: 2009/12/17

Top Glove Corp Bhd (7113) said its first quarter net profit almost doubled to RM66.5 million on cost saving measures and aggressive marketing strategies.

Revenue for the quarter ended November 30 2009 rose 22 per cent to RM472.3 million from RM386.1 million previously.

"Top Glove has adapted well to the challenging business environment, resulting from cost-saving measures implemented at at our factories in Malaysia, Thailand and China.

"In view of the strong profit growth for the first quarter, we're optimistic of positive outlook for the next few quarters," chairman Tan Sri Lim Wee-Chai, said in a statement.

To meet higher demand for latex concentrate, Top Glove is installing nine more latex concentrate centrifuge machines in Thailand.
"We should be able to complete this upgrading works next month," said Lim.

Currently, the company is in net cash position of RM222 million, with RM237.1 million cash in bank as at November 30 2009. It has fully redeemed outstanding bonds before the maturity date.

Its finance cost is also down by 85 per cent to RM400,000 in the first quarter.

In the last 10 years, Top Glove's profits expanded at an average rate of 36 per cent. Its performance far outweighs global rubber glove demand growth of 10 per cent per year.

With installed capacity of 31.5 billion pieces of gloves a year, the world's biggest glovemaker continues to build on its size.

Factory 20, which is located in Klang, Malaysia, has commenced the installation of 16 new and advanced glove production lines and is targeted to be completed by February 2010.

As for Factory 21, it is being built and is expected to start operation towards the end of next year.

http://www.btimes.com.my/Current_News/BTIMES/articles/16top/Article/

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My 18 points guide to Successfully compounding your money in Stocks

Be a good stock picker.
Think as a business owner.
Always look at value rather than the price. Do the homework.
Buy and hold is alright for selected stocks.
Compounding is your friend, get this to work its magic.
Mr. Market is there to be taken advantage of. Do not be the sucker instead. BFS;STS.
Always buy a lot when the price is low.
Never buy when the stock is overpriced.
It is alright to buy when the selected stock is at a fair price.
Phasing in or dollar cost averaging is safe for such stocks during a downtrend, unless the price is still obviously too high.
Do not time the market for such or any stocks.
By keeping to the above strategy, the returns will be delivered through the growth of the company's business.
So, when do you sell the stock? Almost never, as long as the fundamentals remain sound and the future prospects intact.
The downside risk is protected through only buying when the price is low or fairly priced.
Tactical dynamic asset allocation or rebalancing based on valuation can be employed but this sounds easier than is practical, except in extreme market situations.
Sell urgently when the company business fundamental has deteriorated irreversibly.
You may also wish to sell should the growth of the company has obviously slowed and you can reinvest into another company with greater growth potential of similar quality. However, unlike point 16, you can do so leisurely.
In conclusion, a critical key to successful investing is in your stock picking ability.

http://myinvestingnotes.blogspot.com/2012/07/my-18-points-guide-to-successfully.html

11 Lessons From Peter Lynch

Peter Lynch taught me:

1. Behind every stock is a company. Find out what it’s doing.
2. Never invest in any idea you can’t illustrate with a crayon.
3. Over the short term, there may be no correlation between the success of a company’s operations and the success of its stock. Over the long term, there’s a 100% correlation.
4. Buying stocks without studying the companies is the same as playing poker – and never looking at your cards.
5. Time is on your side when you own shares of superior companies.
6. Owning stock is like having children. Don’t get involved with more than you can handle.
7. When the insiders are buying, it’s a good sign.
8. Unless you’re a short seller, it never pays to be pessimistic.
9. A stock market decline is as predictable as a January blizzard in Colorado. If you’re prepared, it can’t hurt you.
10. Everyone has the brainpower to make money in stocks. Not everyone has the stomach.
11. Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what’s actually happening to the companies in which you’ve invested.

Lynch’s advice had a profound effect on my stock market approach. He taught me that investment success isn’t the result of developing the right macro-economic view or deciding when to jump in or out of the market. Success is about researching companies to identify those that are likely to report positive surprises.

Capital Expenditure

A great company with a Durable Competitive Advantage will have a ratio of Capital Expenditures to Net Income of less than 25%. Less is better.

Capital Expenditures are expenses on:
- fixed assets such as equipment, property, or industrial buildings
- fixing problems with an asset
- preparing an asset to be used in business
- restoring property
- starting new businesses

A good company will have a ratio of Capital Expenditures to Net Income of less than 50%.

A great company with a Durable Competitive Advantage will have a ratio of less than 25%.

Less is better.

Benjamin Graham's 113 Wise Words

The true investor scarcely ever is forced to sell his shares, and at all times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons' mistakes of judgement."

Philip Fisher's Wise Words

"The refusal to sell at a loss, while completely natural and normal, is probably one of the most dangerous in which we can indulge ourselves in the entire investment process.

More money has probably been lost by investors holding a stock they really did not want until they could 'at least come out even' than from any other single reason. If to these actual losses are added the profits that might have been made through the proper reinvestment of these funds if such reinvestment had been made when the mistake was first realized, the cost of self-indulgence becomes truly tremendous."

(Common Stocks and Uncommon Profits)

The Ultimate Hold-versus-Sell Test

Here is the overriding primary test, followed by observations on why it is so critically important:

Knowing all that you now know and expect about the company and its stock (not what you originally believed or hoped at time of purchase), and assuming that you had available capital, and assuming that it would not cause a portfolio imbalance to do so, would you buy this stock today, at today's price?

No equivocation. Yes or no?

Answers such as maybe or probably are not acceptable since they are ways of dodging the issue. No investor probably buys a stock; they either place an order or do not.

Here is the implication of your answer to that critical test: if you did not answer with a clear affirmative, you should sell; only if you said a strong yes, are you justified to hold.

Some thoughts on Analysing Stocks (KISS)

Ideally a stock you plan to purchase should have all of the following charateristics:

• A rising trend of earnings dividends and book value per share.
• A balance sheet with less debt than other companies in its particular industry.
• A P/E ratio no higher than average.
• A dividend yield that suits your particular needs.
• A below-average dividend pay-out ratio.
• A history of earnings and dividends not pockmarked by erratic ups and downs.
• Companies whose ROE is 15 or better.
• A ratio of price to cash flow (P/CF) that is not too high when compared to other stocks in the same industry.

Margin of Safety Concept: Stocks should be bought like groceries, not like perfume

The high CAGR in the early years of the investing period, due to buying at a discount, tended to decline and approach that of the intrinsic EPS GR of the companies over a longer investment time-frame.

Chapter 20 - “Margin of Safety” as the Central Concept of Investment

A single quote by Graham on page 516 struck me:

Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.

Basically, Graham is saying that most stock investors lose money because they invest in companies that seem good at a particular point in time, but are lacking the fundamentals of a long-lasting stable company.

This seems obvious on the surface, but it’s actually a great argument for thinking more carefully about your individual stock investments. If most of your losses come from buying companies that seem healthy but really aren’t, isn’t that a profound argument for carefully studying any company you might invest in?

myinvestingnotes.blogspot.my (Bullbear Buffett Stock Investing Notes)

Wednesday, 16 December 2009

Top Glove posts RM65.2m 1Q net profit

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All equity security investments present a risk of loss of capital

The Ultimate Hold-versus-Sell Test

Some thoughts on Analysing Stocks (KISS)

Benjamin Graham

Sell the losers, let the winners run.

Investment Style

Warren Buffett

Political and Economic News

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