What do you get in SPG and how to use it?
The guide contains critical investment information for all stocks listed on the Main Board of the BMS.
SPG is designed for investors who believe in buying stocks based on their
fundamentals. If an investor wants to buy a share based on fundamentals, what type of information would he need?
- Essentially, he would need the most up to date information on the quality, performance and pricing (valuation) of the stock.
- He needs information on the quality of the stock so that he will not overpay for stocks for poor quality.
- He needs data on performance so that the stock he buys will perform well in the future and give him good return.
- Lastly, he needs information on the pricing of the stocks so that he knows at what level to buy the share.
Since the typical fundamental investor is usually a
long term investor, he would also need to have a
good idea of the future condition and it is of course
very difficult to look into the future.- If an investor is very knowledgeable and is prepared to do a lot of research work, it may be possible to determine the future condition and prospect of a company.
- We are believers of the saying that: "The past is a good indication of the future". Hence the SPG provides you with 12 years of earnings and dividend records as well as three years of financial data and ratios.
- A company with a good track record is likely to continue to do well in the future unless there is a complete change in management.
SPG contains two main types of information:
- Descriptive and
- Statistical.
Descriptive information comprises information on:
- Ownership,
- Activities,
- Corporate Structure,
- Past & Future Performance and
- Capital of the company.
This section is mainly designed to give the readers an idea of the
performance and quality of the company in terms of its
strategy, earnings and assets management.SPG briefly discusses qualitatively the
immediate past, current and future earnings prospects of the company. SPG does not discuss the historical earnings trend apart from that of the previous year as this data is available in another part of the report.
The descriptive part of the report, seeks to provide you with some fo the answers to the
"WHAT stock am I buying?" questions.
Stastistical information is made up of two parts:
(1) Critical stock market information, for 12 years or from the year of listing, comprising of the
- Annual Price Range,
- EPS,
- DPS,
- DY Range and
- PER Range.
(2) Financial information comprising of Summary Statistics from
- the Balance Sheet and
- Profit & Loss Statement of the company as well as
- a collection of Critical Financial Ratios.
This is probably the most improtant and unique part of this publication. The information provided is in the form of data for each year. The annual stock performance figures, be they price, EPS or DPS, may not be enough in themselves.
Serious investors may like to take a longer view by seeing how the figures may have changed over the years. That is, what are the
historical growth rates of the price, EPS and DPS of a stock from the past.Furthermore, owing to the fact that the performance for a particular year may be very good or very bad, the DY and PER figures would be seriously distorted. It is sometimes more useful to look at the average figures rather then the individual year's figures.
The Statistical part of the report is used more for answering to the
"WHICH stock to buy?" and the
"WHEN to buy a stock?" questions.
Ref:
How to use the Stock Performance Guide (SPG)
Stock Performance Guide by Dynaquest Sdn. Bhd.
