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.

Showing posts with label Parkson. Show all posts

Friday 12 October 2012

Parkson (27.8.2012)

Date announced 27-Aug-2012
Quarter 30/6/2012
Qtr 4 FYE 30/6/2012
STOCK Parkson
C0DE 5657

Price $ 4.7
Curr. ttm-PE 13.60
Curr. DY 3.40%

Dividends		% chg
Curr. FY0	16.00	6.7%
Prev FY1	15.00	150.0%
Prev FY2	6.00
Curr. DY	3.40%


Risk vs Returns
Upside	1.54	61%
Downside	1.00	39%

Returns
One Yr Apprec Pot.		7%
Avg Yield		5%
Avg Tot. Ann Return		12%
(for next 5 years)

INPUT VARIABLES
Today's Share Pr $		4.70
EPS GR %		7%
Avg H. PE		13.0
Avg. L. PE		10.0
Rec. Severe Low Pr		3.66

Current PE		13.60
Signature PE		11.50
RV		118%
Rational Price		3.97


Dividends
Present Dividend		16.00
Avg % DPO		46%

Present Div Yield		3.40%
Present High Yield		4.37%

EPS G. RATE		7%
Present Market Pr.		4.70

Stock Performance Chart for Parkson Holdings Berhad

http://biz.thestar.com.my/marketwatch/charts/chartlist.asp?charttype=17&days=365&submit1=submit&stock_code=5657%2CPARKSON&p1=4.72&p2=4.71&p3=4.78&p4=4.71&p5=4.75&p6=0.03&p7=0.64&p8=14054&p9=17.44&comurl=

Saturday 23 June 2012

Investor's Checklist: Consumer Services

Most consumer services concepts fail in the long run, so any investment in a company in the speculative or aggressive growth stage of the business life cycle needs to be monitored more closely than the average stock investment.

Beware of stocks that have already priced in lofty growth expectations. You can make money if you get in early enough, but you can also lose your shirt on the stock's rapid downslide.

The sector is rife with low switching costs. Companies that establish store loyalty or store dependence are very attractive. Tiffany's is a good example; it faces limited competition in the retail jewelery market.

Make sure to compare inventory and payables turns to determine which retailers are superior operators. Companies that know what their customers want and how to exploit their negotiating power are more likely to make solid bets in the sector.

Keep an eye on those off-balance sheet obligations. Many retailers have little or no debt on the books, but their overall financial health might not be that good.

Look for a buying opportunity when a solid company releases poor monthly or quarterly sales numbers. Many investors overreact to one month's worth of bad same-store sales results, and the reason might just be bad weather or an overly difficult comparison to the prior-year period. Focus on the fundamentals of the business and not the emotion of the stock.

Companies also tend to move in tandem when news comes out about the economy. Look for a chance to pick up shares of a great retailer when the entire sector falls - keep that watch list handy.

Ref: The Five Rules for Successful Stock Investing by Pat Dorsey

Read also:
Investor's Checklist: A Guided Tour of the Market...

Monday 24 October 2011

Parkson said to list retail arm in S$200 m S'pore

Posted on 19 October 2011 - 11:21am

Last updated on 19 October 2011 - 04:38pm

SINGAPORE (Oct 19, 2011): The Asian retail arm of Malaysia's Parkson Holdings is planning to raise up to S$200 illion ((RM494.6 million) in a Singapore initial public offering (IPO), a source told Reuters on Wednesday.

Parkson Retail Asia, a department-store operator with operations in Malaysia, Vietnam and Indonesia, is looking to sell shares at an indicative price of S$0.935-S$1.07 each, the source with direct knowledge of the deal said.

The source could not be named as he was not authorised to speak to the media. A spokesperson for Parkson Holdings could not immediately be reached for comment.

Parkson Retail, 90% owned by Parkson Holdings, on Wednesday filed a preliminary prospectus with the Singapore regulator. Indonesia's PT Mitra Samaya owns the remaining 10% in the company.

The global offering comprises 80 million primary shares and 67 million secondary shares offered by Parkson Holdings' subsidiary East Crest International and Mitra Samaya, with an over-allotment option of 22.05 million secondary shares, IFR Asia reported.

The indicative price range is 12.4-14.2 times the expected earnings for calendar year 2012.

Its parent Parkson Holdings has a 12-month forward price-to-earnings ratio of 20.3 times, compared with a sector median of 19.9, according to Starmine data.

In August, Parkson Holdings said Parkson Retail had net assets of S$140.3 million as of June 30.

HSBC has been appointed the sole global coordinator and issue manager for the offering. CIMB and HSBC are the joint bookrunners and underwriters, while CLSA is the co-lead manager.

At 0413 GMT, shares of Parkson Holdings were down 1.95% at RM5.54. – Reuters

Thursday 17 March 2011

Parkson Holdings to expand into Indonesia retail market

Parkson Holdings to expand into Indonesia retail market
Written by Joseph Chin of theedgemalaysia.com
Thursday, 17 March 2011 19:23

KUALA LUMPUR: PARKSON HOLDINGS BHD [] is teaming up with PT Tozy Bintang Sentosa (TBS) to expand its Parkson department stores in Indonesia.

Parkson said on Thursday, March 17 it signed an exclusivity agreement with TBS Group for the proposed collaboration.

The TBS Group operates six retail stores under the brand names of Centro Lifestyle Department Store and Kem Chicks in Indonesia and it planned to add another two more stores.

The eight stores were expected to generate more than US$100 million in sales turnover in 2011.

“The proposed collaboration provides Parkson with an opportunity to establish a presence in Indonesia and extend its international network into Indonesia which has a large domestic retail market given its population base of over 240 million people,” it said.

Parkson operates 89 department stores in Malaysia, China and Vietnam.

Thursday 24 February 2011

Parkson 2Q net profit up 16.8% to RM93.8m, to speed up expansion

Parkson 2Q net profit up 16.8% to RM93.8m, to speed up expansion
Written by Surin Murugiah of theedgemalaysia.com
Tuesday, 22 February 2011 20:47

KUALA LUMPUR: PARKSON HOLDINGS BHD [], which reported RM93.8 million in earnings in the second quarter, plans to accelerate its expansion plan in the countries which operates and targets to add on average 20% new operating area to its portfolio.

It said on Tuesday, Feb 22 the 2Q earnings in the quarter ended Dec 31, 2010 was a 16.8% increase from RM80.31 million a year ago, driven by year end festivities and the holiday season.

Parkson, which operates in Malaysia, China and Vietnam, said revenue rose 6.7% to RM756.38 million from RM709.32 million a year ago. Earnings per share were 8.67 sen while net assets per share was RM1.89.

Commenting on its prospects, Parkson said its retail operations were expected to continue to record satisfactory results in the next quarter in view of the expected higher spending during the Chinese New Year festivities.

For the six months ended Dec 31, Parkson said gross sales proceeds rose 7.9% to RM4.554 billion from a year ago backed by improved same store sales growth in all three countries (Malaysia 10%, China 11% & Vietnam 23%).

“Operating profit increased by 9.0% to RM410.8 million and net profit attributable to the Group improved by 17.2% to RM170.0 million. Basic earnings per share were RM0.16, which grew by 11.9% over the same period of last year.

“As a result of the appreciation of ringgit against Chinese renminbi and Vietnamese dong, lower operating results were consolidated into the group,” it said.

Parkson said excluding the impact of the currency translation, on a comparable basis, the group's gross sales proceeds increased by 15.7% to RM4.884 billion as compared to the preceding year’s corresponding period.

Accordingly, on comparable basis, operating profit increased by 17.4% to RM442.6 million and net profit attributable to the group increased by 25.4% to RM181.8 million.

“In line with the improving macro economic outlook, the group believes domestic consumption will underpin the economic growth in all the countries it operates in.

“On the back of such expectations, the group is accelerating its expansion plan and is targeting to add on average 20% new operating area to its portfolio,” it added.

Parkson said it would focus on improving its market share in existing markets or entering into nearby markets by leveraging on the strength of its flagship store in cities or markets in which the group has established a strong presence with strong brand equity.

It added that attention would also be given to relatively affluent cities or new markets in order to further expand the group’s network and brand image.

Friday 14 January 2011

A Brief Look at Parkson Holdings Berhad

Parkson Holdings Berhad

Business Description:
Parkson Holdings Berhad is a Malaysia-based investment holding company. The Company, along with its subsidiaries, is principally engaged in the operations of the Parkson brand department stores. The businesses are located in the People's Republic of China, Malaysia and Vietnam. The Company has a chain of 85 Parkson department stores, with 35 in Malaysia, 44 in China and 6 in Vietnam. The Company's subsidiaries include East Crest International Limited, Parkson Vietnam Investment Holdings Co Ltd, Parkson Properties Holdings Co Ltd, Prime Yield Holdings Limited, PRG Corporation Limited, Parkson Venture Pte Ltd, Serbadagang Holdings Sdn Bhd and Sea Coral Limited.

Year DPS EPS

2003 0.4 -50.6

2004 0.4 42.6

2005 2.8 79.7

2006 0.4 -94.5

2007 0.0 -8.9

2008 14.9 25.3

2009 5.0 25.4

2010 6.0 27.89

1Q11 10.0 7.28 NTA 1.97

Recent Financial Results

Announcement Date	Financial Yr. End	Qtr	Period End	Revenue RM '000	Profit/Lost RM'000	EPS	Amended
15-Nov-10	30-Jun-11	1	30-Sep-10	656,485	130,350	7.28	-
24-Aug-10	30-Jun-10	4	30-Jun-10	620,370	113,823	5.46	-
24-May-10	30-Jun-10	3	31-Mar-10	753,897	154,795	8.15	-
23-Feb-10	30-Jun-10	2	31-Dec-09	709,319	145,847	7.90	-

Current Price (1/7/2011): 5.90
2010 Sales 2,722,256,000
Employees: 6,700
Market Cap: 6,517,000,760
Shares Outstanding: 1,104,576,400
Closely Held Shares: 851,255,339

Estimated EPS for 2011 = ttm-EPS = 28.79 sen
At Current Price of 5.90, its projected PE for 2011 = 5.90 / 0.2879 = 20.5 x

Historical
5 Yr
PE range 13.3 - 28.2
DY range 1.8% - 0.7%

10 Yr
PE range 8.3 - 18.5
DY range 1.2% -0.5%

Capital changes

2007 4 to 1 Capital Reduction

2009 1/100 Treasury Share Distribution

Monday 3 January 2011

One Year Performance of Selected Stocks in KLSE (2)

Tuesday 16 November 2010

OSK Research maintains Buy on Parkson, TP RM6.64

OSK Research maintains Buy on Parkson, TP RM6.64
Written by The Edge FinancialDaily
Tuesday, 16 November 2010 08:33

KUALA LUMPUR: OSK Research is maintaining its Buy call and target price of RM6.64 for PARKSON HOLDINGS BHD [].

Parkson reported a 1QFY11 revenue of RM656.5 million (+2.3% y-o-y) and net profit of RM76.2 million (+17.7% y-o-y). If not for the stronger RM against RMB and VND, net profit would have surged 28.4% y-o-y.

OSK Research said on Tuesday, Nov 16 the robust numbers were attributed to the impressive same store sales growth in all the countries under its umbrella, as well as new openings. Despite the higher expenses incurred for new openings, commission rates, direct sales and EBITDA margins were flat y-o-y.

“As the results were within our forecast, we maintain our FY11 and FY12 earnings estimates at RM373.6m and RM444.3m. Parkson has declared a 10 sen tax exempt dividend per share. Maintain BUY,” it said.

Monday 15 November 2010

Parkson

Date announced 15/11/2010
Quarter 30/09/2010 Qtr 1 FYE 30/06/2011

STOCK Parkson C0DE 5657
Price $ 5.76 Curr. ttm-PE 20.01 Curr. DY 1.04%
LFY Div 6.00 DPO ratio 22%
ROE 14.6% PBT Margin 25.6% PAT Margin 11.6%

Rec. qRev 656485 q-q % chg 6% y-y% chq 2%
Rec qPbt 168360 q-q % chg 12% y-y% chq 9%
Rec. qEps 7.28 q-q % chg 33% y-y% chq 14%
ttm-Eps 28.79 q-q % chg 3% y-y% chq -3%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 20.00 Avg. L PE 17.00
Forecast High Pr 7.35 Forecast Low Pr 4.64 Recent Severe Low Pr 4.64
Current price is at Middle 1/3 of valuation zone.

RISK: Upside 59% Downside 41%
One Year Appreciation Potential 6% Avg. yield 1%
Avg. Total Annual Potential Return (over next 5 years) 7%

CPE/SPE 1.08 P/NTA 2.92 NTA 1.97 SPE 18.50 Rational Pr 5.33

Decision:
Already Owned: Buy, Hold, Sell, Filed; Review (future acq): Filed; Discard: Filed.
Guide: Valuation zones - Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell.

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr

Wednesday 3 November 2010

Parkson

Date announced 24/08/2010
Quarter 30/06/2010 Qtr 4
FYE 30/06/2010

STOCK Parkson
C0DE 5657

Price $ 5.95 Curr. PE (ttm-Eps) 21.33 Curr. DY 1.01%
LFY Div 6.00 DPO ratio 22%
ROE 15.2% PBT Margin 24.2% PAT Margin 9.0%

Rec. qRev 620370 q-q % chg -18% y-y% chq 8%
Rec qPbt 150129 q-q % chg -27% y-y% chq -2%
Rec. qEps 5.46 q-q % chg -33% y-y% chq -1%
ttm-Eps 27.89 q-q % chg 0% y-y% chq -4%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 20.00 Avg. L PE 17.00
Forecast High Pr 7.12 Forecast Low Pr 4.74 Recent Severe Low Pr 4.74
Current price is at Middle 1/3 of valuation zone.

RISK: Upside 49% Downside 51%
One Year Appreciation Potential 4% Avg. yield 1%
Avg. Total Annual Potential Return (over next 5 years) 5%

CPE/SPE 1.15 P/NTA 3.25 NTA 1.83 SPE 18.50 Rational Pr 5.16

Decision: Already Owned: Buy Hold Sell Filed; Review (future acq): Filed; Discard: Filed
Guide: Valuation zones Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr

Monday 7 June 2010

Historical Investment Data for Parkson (7.6.2010)

Historical Investment Data for Parkson (7.6.2010)
http://spreadsheets.google.com/pub?key=to3QELB1TK3GBvszqFfJBdw&output=html

Tuesday 25 May 2010

A quick look at Parkson (25.5.2010)

A quick look at Parkson (25.5.2010)
http://spreadsheets.google.com/pub?key=tXVsOu0LzdXykg2thm_IQrA&output=html

Friday 30 April 2010

A quick look at Parkson (30.4.2010)

Parkson Holdings Berhad Company

Business Description:
Parkson Holdings Berhad. The Group's principal activity is operating department stores. It also operates as an investment holding. As 30-06-2009, the Group has 42 stores in China, 33 stores in Malaysia and five stores in Vietnam. Operations are carried out in Malaysia, the People's Republic of China, Vietnam and other countries.

Wright Quality Rating: CCNN Rating Explanations
Stock Performance Chart for Parkson Holdings Berhad

A quick look at Parkson (30.4.2010)
http://spreadsheets.google.com/pub?key=t89GdOvB0Z7c0P09gMecXmg&output=html

Monday 22 March 2010

William Cheng buys 33.5m Lion Industries shares

William Cheng buys 33.5m Lion Industries shares

Written by Joseph Chin
Monday, 22 March 2010 19:36

KUALA LUMPUR: Tan Sri William Cheng acquired 33.5 million shares of Lion Industries Corp Bhd at the exercise price of RM1.29 per share from Megasteel Sdn Bhd.

Lion Industries said on Monday, March 22 the acquisition of the shares was the remaining stake he was to acquire from Megasteel under a put option of 51 million shares.

He had on Dec 23, 2009 acquired 17.5 million shares also at RM1.29.

Under the terms of the proposed disposal, Cheng was required to complete the acquisition of 51 million shares, representing 50% of the 102 million shares under the put option, by March 31.

http://www.theedgemalaysia.com/business-news/162060-william-cheng-buys-335m-lion-industries-shares.html

Comment: Maybe a reason why Mr. Cheng has been selling so many shares in Parkson.

Thursday 28 January 2010

HDBSVR: Buy Parkson on share price weakness

HDBSVR: Buy Parkson on share price weakness

Tags: Hwang DBS Vickers Research | Parkson Holdings | Parkson Retail Group

Written by Hwang DBS Vickers Research
Thursday, 28 January 2010 09:17

KUALA LUMPUR: Hwang DBS Vickers Research says PARKSON HOLDINGS BHD []’s share price weakness is a buying opportunity. Its share price has fallen from its recent high of RM6.20 to RM5.51 currently.

“Maintain Buy and RM6.30 TP (RNAV -derived),” it said on Thursday, Jan 28.

Its said the sell-down – which might be due to China’s credit tightening initiatives – is excessive as there is still strong growth potential in China’s huge retail sector.

The December 2009 monthly data showed a 17.5% jump y-o-y (vs Nov 2009’s 15.8%) in retail sales.

Hwang DBS Vickers Research said an added positive is Parkson’s strong balance sheet (RM226 million net cash at end-September 2009) and healthy free cash flow (RM370 million in FY11F).

Foreign interest is returning with 25.4% foreign shareholding in Nov 2009 (versus a low of 20% in early 2009).

“Separately, the discount of Parkson’s market cap to its share of HK-listed Parkson Retail Group’s market cap has narrowed to 30% from a one-year high of 40.5%, but is still above its historical average of 25%. This suggests Parkson may continue to outperform Parkson Retail Group,” it said.

Monday 26 October 2009

Business model of Parkson Retail Group

PRG operates the Lion group's department store business in China.

The Hong Kong-listed PRG is sitting on cash reserves of RMB 3 billion (RM 1.49 billion). The retailer is a 51.6% owned subsidiary of Parkson Holdings Bhd, in which Lion group boss Tan Sri William Cheng holds a 21.9% direct equity stake and 32.5% indirect stake.

After stripping out debts of RMB 2.3 billion, PRG is in a net cash position of RMB 667.5 million.

The retail giant is in a cash-generating business and its department stores are ringing up good sales.

Business model of Parkson Retail Group

PRG's growing cash pile is also due to its asset-light strategy. It does not own many properties while its business model of letting out space to branded names does not tie up its cash with unsold inventories.

For instance, if John Master or Bonia has an outlet in Parkson, the inventory is held by the manufacturers themselves. Parkson lets out the space and gets a commission from sales. This way, it keeps its balance sheet light.

Lingering Concerns

Local fund managers do buy into PRG's growth story. It certainly does not take rocket science to figure out that China's robust growth augurs well for retailers such as PRG. However, there is always a lingering concern because of the state of other companies within the Lion group.

The concerns of investors are not entirely unjustified, going by the track record of other companies within the Lion group stable. For instance, Lion Corp Bhd and Lion Industries are in net debt positions. Further, Amsteel Corp Bhd, once the flagship of the Lion group, and Silverstone Corp Bhd were removed from Bursa Malaysia for failing to regularise their financial positions due to debt problems.

That explains why Parkson Holdings' share price on Bursa Malaysia has been lagging that of PRG's in Hong Kong. The stock does not command the premium it deserves despite its exposure to the sizeable consumer market in China plus Vietnam - another booming emerging economy.

PRG does not have a dividend policy

According to its managing director Alfred Cheng, PRG doesn't have a dividend policy. However, the group has been paying out almost half of its earnings as dividends since it was listed in November 2005. In the last financial year ended Dec 31, 2008, PRG paid out total dividends of RMB 405 million versus RMB 332.5 million in FY2207.

Paying regular dividends isn't a norm among the companies in the Lion group; PRG is probably the first to do so. And PRG needs to keep it up to maintain its status as the group's cash-generating jewel.

Ref: The Edge

Parkson's venture into Vietnam and Indochina

Revenues of Parkson at present are generated as shown:
75% from China
20% from Malaysia
6% from Vietnam

Parkson Holdings' total revenue for FY 2008 ended June 30 was RM 2.35 billion.
RM 1.55 billion from China
RM 718.9 million from Malaysia
RM 80 million from Vietnam

The growth in China is impressive.

It is equally exciting in Vietnam too. While small compared with the operations in China and Malaysia, Vietnam's contribution has nearly doubled from RM 41.9 million in FY 2007.

Vietnam is the stepping stone for Parkson Holdings to capture the market in Indochina, consisting of Vietnam, Cambodia and Laos. Parkson plans to open its first store in Phnom Penh in 1H2011.

Whether Parkson's success in China can be repeated in Vietnam and greater Indochina will depend to a large extent on how it utilises its first-mover advantage to fend off competitors.

Vietnam: Total retail sales in the first 8 months of this year rose 18.4% y-o-y to US$41.67 billion (RM 141 billion), according to the country's General Statistics Office. The growth was recorded in a year that the global economy was in turmoil and the dong (the Vietnamese currency) devalued.

Ref: The Edge

Parkson 26.10.2009

Valuation
http://spreadsheets.google.com/pub?key=tDwhvs3JG3I9fvO-aI9Z5Gg&output=html

Tuesday 11 August 2009

AmResearch sees exciting times ahead for Parkson

AmResearch sees exciting times ahead for Parkson

Tags: AmResearch | Brokers Call | Parkson

Written by Financial Daily
Tuesday, 28 July 2009 11:57

AMRESEARCH has initiated coverage on PARKSON HOLDINGS BHD [ PARKSON 5.400 -0.130 (-2.351%) ] (PHB) with a buy recommendation and a sum-of-parts (SOP) fair value of RM6.60 per share.

The valuation was derived by pegging the group’s core Hong Kong-listed Parkson Retail Group (PRG) at 22 times forecast earnings for CY10, Parkson Malaysia at nine times CY10 earnings and Parkson Vietnam at eight times CY10 earnings.

Being the retail gem of Lion Group, Parkson’s key driver of growth over the past few years had been its operations in Hong Kong and China, which contributed 69% to Parkson’s earnings, while Malaysia and Vietnam contributed 27% and 4%, respectively (FY08), said the research house.

It noted that Parkson was on firm ground post-restructuring and re-branding exercises, with FY09F earnings expected to grow 24% year-on-year (y-o-y) to RM250 million, on the back of a 3%-8% blended same-store sales (SSS) growth in FY09F.

“More importantly, we see better prospects going forward, with earnings growth of 30% and 34% y-o-y for FY10F-11F underpinned by increased spending on a consumer sentiment uptrend along with China’s economic recovery,” AmReserach said.

The research house added that there was tremendous scope for seven to 10 new stores per annum on average — two to three in Malaysia, four to five in China and one or two in Vietnam — potentially increasing Parkson’s total lettable area by 10%-12% to 750,000 sq m by end-2010.

Under management’s plans, the group planned to venture into other untapped markets, notably neighbouring Cambodia and Indochina at large.

“We expect a successful replication of its concessionaire model to power the group’s earnings in the future, with increased earnings from Vietnam to match that of Malaysia’s in three years.

“We see PHB as a cheaper proxy to PRG for exposure to China’s retail industry. We believe Parkson’s share price would continue to attract support given the current discount of 16%-18% to Parkson — due to the latter’s strong earnings composition in Parkson,” it noted.

AmResearch added that despite its expansion plans, the group was expected to remain on a net cash position on a growing cash pile going into FY09-11F, with cash flow per share increasing 31% to 77 sen/share for FY10F from 59 sen/share.

Parkson rose 15 sen to close at RM5.50 yesterday.

This article appeared in The Edge Financial Daily, July 28, 2009.

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?