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 Parkway. Show all posts

Thursday, 17 June 2010

Parkway: Prize for Indian billionaire or Malaysian fund

Parkway: Prize for Indian billionaire or Malaysian fund
17 Jun 2010, 0048 hrs IST,REUTERS

NEW DELHI/SINGAPORE: India's Fortis Healthcare is locked in a battle with Malaysian sovereign wealth fund Khazanah for control of Singapore-based Parkway Holdings, Asia's biggest listed hospitals firm.

Fortis, which owns roughly 25 per cent of Parkway, was keen to build a controlling stake in the company before Khazanah made a surprise $835 million offer last month to lift its stake from 23.5 per cent to 51.5 per cent. Parkway operates 16 hospitals across Asia including Singapore, Malaysia, India and China. Its prized assets are Singapore hospitals, Gleneagles and Mount Elizabeth, whose patients include many wealthy businessmen and politicians.

By July 30, Fortis needs to say whether or not it intends to make a full offer for Parkway. Several analysts expect Fortis, controlled by billionaire brothers Malvinder and Shivinder Singh, to launch a counter bid for Parkway at a 10-15 per cent premium over Khazanah's S$3.78 a share offer.

A source linked to Fortis said the firm's preference is to make a partial offer to buy just over 50 per cent of Parkway instead of making a general offer, which would require a waiver from authorities. But bankers say this is unlikely as Singapore has never given a waiver to firms such as Fortis, which bought into Parkway less than six months ago. If it fails to get an exemption, Fortis will have to spend at least $2.5 billion to buy Parkway shares it does not already own.

Fortis plans to raise as much as $1.2 billion, preparing itself for a possible counterbid. It bought into Parkway to use it as a springboard for overseas expansion. Malvinder, Fortis' chairman, moved to Singapore with his family and took over as Parkway's chairman.

"It would be a choice between the long-term vision of Singh brothers and managing short-term financial opportunities," said Muralidharan Nair, partner for health sciences at Ernst & Young in Mumbai.

With a combined fortune estimated at $3 billion by Forbes magazine -- good for 17th place on its India rich list -- the Singh brothers have the means and access to capital to take on the Malaysian fund. A successful counterbid by Fortis may also put a question mark on Parkway's expansion into Malaysia, as most of the Singapore firm's operations in the country are carried out via Pantai, in which it holds a 40 per cent stake and the balance is held by Khazanah.

Pantai accounts for a quarter of Parkway's revenue and almost one-third of earnings before interest, tax, depreciation, amortisation and rent, according to Credit Suisse.

Making a counterbid for Parkway was originally the second choice for Fortis, said sources aware of the Indian company's game plan. The recent posturing by Fortis has kept Parkway's shares at or above Khazanah's offer price and the Malaysian firm may not be able to get enough acceptance as a result.

Should Khazanah fail, Fortis will retain control of Parkway with four seats on the board versus Khazanah's two. Khazanah cannot accept any of the shares offered if the acceptance falls short of 51.5 per cent under Singapore rules relating to partial offers, a spokeswoman for Khazanah said. But if the Malaysian wealth fund succeeds in its offer, Fortis will be stuck with a minority stake in a company it cannot control although it might be in a position to block proposals made by a Khazanah-led management.

Khazanah and Fortis may also try to reach some form of compromise whereby both parties have a say in the strategic outlook for Parkway. Fortis has been lobbying the governments of Singapore and Malaysia to reach some kind of a deal, sources said.

Fortis may decide to sell out, but only if Khazanah raises its offer price. Based on Khazanah's offer price, Fortis will make a gross profit of about 6.1 per cent on its original investment of $685 million, which valued Parkway at about S$3.56 a share. After deducting around 2 per cent for fees and commissions payable to bankers, lawyers and others associated with the deal, the Indian company is set to pocket a relatively small profit of around $30 million.

"The Singh brothers will put rationality before adrenalin push. They won't fight for ego. Expect them to exit Parkway if they get a good premium," said Jagannadham Thunuguntla, equity head at SMC Capitals in New Delhi.

http://economictimes.indiatimes.com/Parkway-Prize-for-Indian-billionaire-or-Malaysian-fund/articleshow/6058128.cms

Monday, 15 March 2010

India’s Fortis Healthcare to acquire 24% stake in Parkway Holdings for $959m

India’s Fortis Healthcare to acquire 24% stake in Parkway Holdings for $959m

WRITTEN BY THE EDGE
THURSDAY, 11 MARCH 2010 18:28

Fortis Healthcare, India’s fastest-growing healthcare company, has announced the acquisition of a 23.9% strategic stake in healthcare service provider Parkway Holdings from TPG Capital (formerly Texas Pacific Group).

Parkway has a network of 16 hospitals having 3,400 beds spread over six countries, including India. The deal size is estimated to be about US$685.3 million ($959.4 million).

Fortis has entered into a definitive agreement with TPG Capital, one of the world’s leading private investment firms, to acquire its 23.9% stake in Parkway.

Fortis intends to seek four seats on the board of directors of Parkway and also to nominate Malvinder Mohan Singh (current Chairman of Fortis Healthcare) as the Chairman of the Board of Directors of Parkway.

http://www.theedgesingapore.com/the-daily-edge/business/13410-indias-fortis-healthcare-to-acquire-24-stake-in-parkway-holdings-for-959m.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)

Thursday, 17 June 2010

Parkway: Prize for Indian billionaire or Malaysian fund

Monday, 15 March 2010

India’s Fortis Healthcare to acquire 24% stake in Parkway Holdings for $959m

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

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