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.

Tuesday 23 February 2010

TM posts higher 4Q net profit

TM posts higher 4Q net profit

Written by Joseph Chin & Siti Sakinah Abdul Latif
Monday, 22 February 2010 18:17

KUALA LUMPUR: TELEKOM MALAYSIA BHD [] (TM) posted a net profit of RM170.25 million in the fourth quarter ended Dec 31, 2009 (4Q09) compared with RM164.81 million a year ago, despite lower revenue.

TM said today that for the current quarter, group revenue fell 9% to RM2.27 billion from RM2.49 billion a year ago, mainly due to lower revenue from the special project, MERS 999 (the unified emergency contact number system for the Malaysian Emergency Rescue Services). Earnings per share were 4.80 sen.

The company proposed a final gross dividend of 13 sen per share less tax at 25% (2008: a final gross dividend at 14.25 sen per share less tax at 25%) amounting to RM348 million subject to shareholders' approval in the next meeting. This is on top of the interim dividend of 10 sen amounting to RM357.7 million distributed in September last year.

"With the proposed total dividend payout of RM706 million, that brings our 12-month total return to shareholders to 38.5%, the highest among all fixed peers in the region," said CEO Datuk Zamzamzairani Mohd Isa at the briefing of the company's financial result today.

TM said excluding revenue from MERS 999, the current quarter revenue was only 1.5% lower as compared to the preceding year quarter.

Internet and multimedia revenue registered a 2.6% growth at RM402.0 million in 4Q09 from RM391.8 million recorded in 4Q08 due to growth in broadband customers (excluding Hotspot customers) to 1.43 million in 4Q09 from 1.28 million in 4Q08.

"Group profit after tax and minority interests (Patami) increased by 2.5% to RM170.2 million as compared to RM166.0 million (excluding the results of the demerged Axiata Group) in the corresponding quarter in 2008. This was mainly attributed to unrealised exchange gain on translation of foreign currency borrowings of RM47.3 million as compared to a loss of RM18.2 million in the same quarter in 2008," it said.

For FY09, group revenue dipped 0.8% to RM8.608 billion versus RM8.675 billion in FY08 mainly due to lower revenue from MERS 999 in the current financial year.

Excluding revenue from MERS 999, the current year revenue would have increased by 0.9% as compared to preceding financial year.

Operating profit before finance cost increased 46.0% to RM1.06 billion due to lower operating costs recorded in the current financial year and the absence of loss on disposal of equity investment.

For FY09, the voice segment contributed RM4 billion or 46.5% of total revenue, a decline from RM4.4 billion or 50.9% in FY08. Meanwhile, the non-voice segment is increasing its contribution to 53.5% in FY09 to RM4.6 billion from 49.1% or RM4.26 billion in FY08.

Asked on the decline of the voice segment to revenue, Zamzamzairani said that the situation is not unique, as all operators would face decline in the voice segment, adding that TM planned to offer bundle packages of data/Internet and voice to its customers for "value proposition".

"Besides fix-to-fix call, we also look at enhancing fix-to-mobile call," he added.

As for its non-voice segment, Zamzamzairani said TM would be working on upgrading its Internet service for higher speed, having more simplified bundling and enhancing its market strategy to make its service available to "as many people as possible".

"We also saw aggressive push by the mobile and WiMAX players who came onto the market with their products and services. Despite the fierce competition, TM continued to attract new customers and maintained leadership position in the broadband segment with 1.43 million customers as at the end of 2008," he added.

On the high-speed broadband (HSBB) project, Zamzamzairani said that TM has already achieved 152,000 premises, surpassing the target of 150,000 premises, adding that it is on track to commercially launch the retail service in four areas — Taman Tun Dr Ismail, Bangsar, Subang Jaya and Shah Alam — by the end of the first quarter this year.

He added that TM was looking at a total of 750,000 premises this year.

TM had spent RM516 million on the HSBB project in FY08 as the contract was signed in Sept 2008. In FY09, TM spent RM1.3 billion and expects to spend another RM2 billion for FY10.

To recap, the HSBB project is a private-public project worth RM11.3 billion, with the government pledging to finance a total of RM2.4 billion, targeting 1.3 million premises by end-2012 with network access speed from 10Mbps while for businesses, it can go up to 1Gbps.

As for the company's prospect, Zamzamzairani said TM's performance improvement programme (PIP) 2.0 would be continued to enhance customer experience.

Meanwhile, Bloomberg reported that TM is targeting revenue growth of 2% in FY10 and a further 3% in FY12. TM's stock rose to its 52-week high today, closing nine sen higher at RM3.35.

http://www.theedgemalaysia.com/business-news/160111-telekom-malaysia-4q-net-profit-rm17025m-vs-rm16481m-yr-ago.html

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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)

Tuesday 23 February 2010

TM posts higher 4Q 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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