Graham had become well known during the 1920's. At a time when the rest of the world was approaching the investment arena as a giant game of roulette, he searched for stocks that were so inexpensive they were almost completely devoid of risk.
One of his best known calls was the Northern Pipe Line, an oil transportation company managed by the Rockefellers. The stock was trading at $65 a share, but after studying the balance sheet, Graham realized that the company had bond holdings worth $95 for every share. The value investor tried to convince management to sell the portfolio off, but they refused. Shortly thereafter, he waged a proxy war and secured a spot on the Board of Directors. The company sold its bonds off and paid a dividend in the amount of $70 per share.
When he was 40 years old, Graham published "Security Analysis", one of the greatest works ever penned on the stock market. At the time, it was risky; investing in equities had become a joke [the Dow Jones had fallen from 381.17 to 41.22 over the course of three to four short years following the crash of 1929]. It was around this time that Graham came up with the principle of "intrinsic" business value - a measure of a businesses' true worth that was completely and totally independent of the stock price. Using this 'intrinsic value', investors could decide what a company was worth paying for - and make investment decisions accordingly. His subsequent book, "The Intelligent Investor" [which Warren celebrates as "the greatest book on investing ever written"] introduced the world to Mr. Market - the greatest investment analogy in history.
Through his simple yet profound investment principles, Graham became an idyllic figure to the twenty-one year old Buffett.
http://beginnersinvest.about.com/library/titans/nwarrenbio.htm
Tuesday, 19 February 2013
For Buffett, the Long Run Still Trumps the Quick Return
Donald Bowers/Getty Images for FortuneWarren Buffett at a New York book party for “Tap Dancing to Work,” by Carol Loomis.
“If somebody bought Berkshire Hathaway in 1965 and they held it, they made a great investment — and their broker would have starved to death.”
Warren E. Buffett was sitting across from me over lunch at a private club in Midtown Manhattan last week, lamenting the current state of Wall Street, which promotes a trading culture over an investing culture and offers incentives for brokers and traders to generate fees and fast profits.
“The emphasis on trading has increased. Just look at the turnover in all of the stocks,” he said, adding with a smile: “Sales people have forever gotten paid by selling people something. Generally, you pay a doctor for how often he gets you to change prescriptions.”
“You can’t buy 10 percent of the farmland in Nebraska in three years if you set out to do it,” he said. Yet, he pointed out, he was able to buy the equivalent of 10 percent of I.B.M. in six to eight months as a result of the market’s liquidity. “The idea that people look at their holdings in such a way that that kind of volume exists means that to a great extent, it’s a casino game,” he said. Of course, unlike many investors, he plans to hold his stake in I.B.M. for years.Mr. Buffett, 82, is famous for investing in companies that he sees as solid operations and essential to the economy, like railroads, utilities and financial companies, and holds his stakes for the long run. The argument that the markets are better off today because of the enormous amount of liquidity in the stock market, a function of quick flipping and electronic trading, is a fallacy, he said.
Mr. Buffett was in a reminiscing mood about a bygone era, in part because he was in New York to make the rounds on television to discuss a new book chronicling his 61-year career, which began in 1951 at Buffett-Falk & Company in Omaha. (After lunch, he was going to visit “The Daily Show With Jon Stewart.”)
The book, “Tap Dancing to Work,” by a longtime journalist and good friend of his, Carol Loomis of Fortune magazine, is a compendium of articles that she and others wrote in Fortune that creates a series of narratives spanning the arc of his career.
Ms. Loomis, who first met Mr. Buffett in 1967 — and whose long career is a story unto itself — also came to our lunch. Ms. Loomis may know more about Mr. Buffett than he knows about himself. (“There’s nothing here you’re going to like,” she said, after surveying the various pies when the dessert cart came around. She was right: he took a quick look and asked if they served ice cream. They did.)
As we talked about the “good old days” — he spoke of some of his early friends who were successful hedge fund investors, like Julian Robertson, who founded Tiger Management — it became clear that he was less enamored of the investor class of the next generation.
When I asked, for example, if there were any private equity investors that he admired, he flatly replied: “No.”
When I asked if he followed any hedge fund managers, he struggled to name any, before saying that he liked Seth Klarman, a low-key value investor who runs the Baupost Group, based in Boston.
“They’re not as good as the old ones generally. The field has gotten swamped, so there’s so much money playing and people have been able to raise money by just saying ‘hedge fund,’” he said. “That was not the case earlier on; you really had to have some performance for some time before people would put money with you. It’s a marketing thing.”
For a moment, he paused, and then posited that if he started a hedge fund today, “I’d probably grow faster, because a record now would attract money a lot faster,” speculating that his record of returns would attract billions of dollars from pension funds and others. But he then acknowledged a truism of investing that he knows all too well, as the manager of an enterprise that is now worth some $220 billion: “Then money starts getting self-defeating at a point, too.”
Until 1969, Mr. Buffett operated a private partnership that was akin in some ways to a modern hedge fund, except the fee structure was decidedly different. Instead of charging “2 and 20” — a 2 percent management fee and 20 percent of profits — Mr. Buffett’s investors “keep all of the annual gains up to 6 percent; above that level Buffett takes a one-quarter cut,” Ms. Loomis wrote. However, in 1969, he announced he would shutter his partnership. “This is a market I don’t understand,” he said, according to Ms. Loomis.
He believed that the stock market of 1968 had become wildly overpriced — and he was right. By the end of 1974, the market took a tumble. Instead, he remained the chief executive of Berkshire Hathaway, one of his early investments.
“If you want to make a lot of money and you own a hedge fund or a private equity fund, there’s nothing like 2 and 20 and a lot of leverage,” he said over a lunch of Cobb salad. “If I kept my partnership and owned Berkshire through that, I would have made even more money.”
Mr. Buffett says he now considered himself as much a business manager as an investor. “The main thing I’m doing is trying to build a business, and now we built one. Investing is part of it but it is not the main thing.”
Today, Mr. Buffett is particularly circumspect about the investment strategies that hedge funds employ, like shorting, or betting against, a company’s stock. He used to short companies as part of a hedging strategy when he ran his partnership, but now he says that he and Charlie Munger, his longtime friend and vice chairman of Berkshire, see it as too hard.
“Charlie and I both have talked about it, we probably had a hundred ideas of things that would be good short sales. Probably 95 percent of them at least turned out to be, and I don’t think we would have made a dime out of it if we had been engaged in the activity. It’s too difficult,” he explained, suggesting that the timing of short investments is crucial. “The whole thing about ‘longs’ is, if you know you’re right, you can just keep buying, and the lower it goes, the better you like it, and you can’t do that with shorts.”
One of his big worries these days is about what’s going to happen to all the pension money that is being invested in the markets, often with little success, in part because investors are constantly buying and selling securities on the advice of brokers and advisers, rather than holding them for the long term. “Most institutional investors, whoever is in charge — whether it’s the college treasurer or the trustees of the pension fund of some state — they’re buying what they’re sold.”
Most pension funds probably didn’t buy Berkshire in 1965 and hold it, but if they had, they would have far fewer problems today. At the end of her book, Ms. Loomis notes that when she mentioned Mr. Buffett’s name for the first time in Fortune magazine in 1966 — accidentally spelling Buffett with only one “t” — Berkshire was trading at $22 a share. Today it is almost $133,000 a share.
http://dealbook.nytimes.com/2012/12/03/for-buffett-the-long-run-still-trumps-the-quick-return/
Friday, 8 February 2013
Thursday, 7 February 2013
Bruce Greenwald on Value Investing
Do not miss his comments @ 9 minutes on Buffett's buying of Washington Post in Summer of 1972. The share price of Washington Post dropped 45% after he bought; and it was still a great investment.
If you behave the way such as Graham and Dodds prescribe, there are no bad days in the market. When the market is down, you got bargains and it is lovely to think of what you are buying at low prices. When the market is up, the bargains are gone, but you are rich.
What Do Investors Do in Volatile Stock Market?
What Do Investors Do in Volatile Stock Market?
Volatile Markets Increase Risk for Long-Term Investors
The stock market is volatile.
Sometimes it is more volatile than others. I think it is safe to assume the stock market will be more volatile in the future than it has been in the past.
What does this mean for long-term investors?
It means, among other things, that you should be careful about when you buy and when you sell.
If that seems simplistic, it is still the best advice for long-term investors.
On the sell side, plan on reducing your exposure in stocks at least five years before you need the money.
If the stock market zooms up, don’t be afraid to sell sooner than you planned.
The reason is in volatile markets the danger of a horrendous fall is greater now than it probably ever has been.
High frequency trading and other automated buy/sell systems can turn a small decline into to a free-fall (or light a fire under a small push up).
There’s no way to predict when prices will return after a dramatic rise or fall – they could come back quickly or not.
Likewise, if you are still more than five years away from needing the cash (typically at retirement) and the market does a nose-dive, don’t be afraid to pickup some bargains.
As market volatility increases, long-term investors must ask themselves if they have the risk tolerance to see five, even ten percent daily losses or gains.
Volatility simply makes investing in stocks more risky. If you have time to wait out extreme dips, you will probably be OK.
Traders may (or more likely, may not) make money in volatile markets, however long-term investors face disaster if they wait until the last moment to cash out of stocks.
Don’t put yourself in the position of needing the cash out of your investments in the near term (less than five years).
http://stocks.about.com/od/advancedtrading/a/051010volatilestocks.htm
If the stock market is so volatile, why would I want to put my money into it?
Question: If the stock market is so volatile, why would I want to put my money into it?
In this question, volatility refers to the upward and downward movement of price. The more prices fluctuate, the more volatile the market is, and vice versa. Now, to answer this question, we must ask another one: is the stock market really volatile?
The answer is, "Yes, it is … sometimes." The market is volatile, but the degree of its volatility adjusts over time. Over the short term, stock prices tend not to climb in nice straight lines. A chart of day-to-day stock prices looks like a mountain range with plenty of peaks and valleys, formed by the daily highs and lows. However, over months and years, the mountain range flattens into more of a gradual slope. What this implies is that if you are planning to hold a stock for the long term (more than a few years), the market instantly becomes less volatile for you than for someone who is trading stocks on a daily basis.
And in some cases, short-term volatility is seen as a good thing, especially for active traders. The reason for this is that active traders look to profit from short term movements in the market and individual securites, the greater the movement or volatility the greater the potential for quick gains. Of course, there is the real possibility of the quick losses, but active traders are willing to take on this risk of loss to make quick gains.
A long-term investor, on the other hand, doesn't have to worry about this day-to-day volatility of the market. As long as the market continues to climb over time, as it has historically, your good investments will appreciate and you'll have nothing to worry about. Because of this long-term appreciation, many choose to invest in the stock market.
Read more: http://www.investopedia.com/ask/answers/03/070403.asp#ixzz2KBrWomXz
In this question, volatility refers to the upward and downward movement of price. The more prices fluctuate, the more volatile the market is, and vice versa. Now, to answer this question, we must ask another one: is the stock market really volatile?
The answer is, "Yes, it is … sometimes." The market is volatile, but the degree of its volatility adjusts over time. Over the short term, stock prices tend not to climb in nice straight lines. A chart of day-to-day stock prices looks like a mountain range with plenty of peaks and valleys, formed by the daily highs and lows. However, over months and years, the mountain range flattens into more of a gradual slope. What this implies is that if you are planning to hold a stock for the long term (more than a few years), the market instantly becomes less volatile for you than for someone who is trading stocks on a daily basis.
And in some cases, short-term volatility is seen as a good thing, especially for active traders. The reason for this is that active traders look to profit from short term movements in the market and individual securites, the greater the movement or volatility the greater the potential for quick gains. Of course, there is the real possibility of the quick losses, but active traders are willing to take on this risk of loss to make quick gains.
A long-term investor, on the other hand, doesn't have to worry about this day-to-day volatility of the market. As long as the market continues to climb over time, as it has historically, your good investments will appreciate and you'll have nothing to worry about. Because of this long-term appreciation, many choose to invest in the stock market.
Read more: http://www.investopedia.com/ask/answers/03/070403.asp#ixzz2KBrWomXz
Volatility and the Stock Market
Is market volatility running high or is it running low (maybe too low)?
I've read several news articles just this week saying the market is increasingly volatile. I've also seen analyses expressing surprise that volatility hasn't jumped higher as the S&P has slid 7.2% from its September high.
The answer is that volatility-as measured by the CBOE Volatility Index (VIX)-is right now on the borderline between historical "high" and "low."
The VIX is based on S&P options, where option pricing reflects traders' volatility expectations. When options are expensive (relative to stock price, etc.), it means traders are betting on high volatility; when options are cheap, it means traders are betting on low stock volatility. The VIX index quantifies what volatility traders "must be" expecting.
Analysts generally use the VIX as a measure of investor sentiment. High VIX reflects high uncertainty. And because markets are usually more volatile when prices are falling, a high VIX can also suggest high expectations for falling prices.
A low VIX means low expected volatility, which is more associated with expectations of rising prices.
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What's high and what's low depends on the time span you consider. The 20-year chart below shows four alternating VIX eras; low from 1993 to 1996, then high from 1997 to 2003, then low again from 2003 to 2007, and back to high from 2007 on. The dividing line between high and low is in the area of .14 to .18. The VIX is currently at .16, right in that boundary zone.
Relative to the "high" VIX era that started in 2007 (ranging all the way from .14 to .80), current volatility is very low. Even setting aside that astonishing VIX spike up to .80 in late 2008 (the height of the financial crisis), current readings are at about one-third the levels posted in short bursts in 2010 and 2011.
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The second chart takes a closer look at the last three years. It shows four occasions when VIX dipped down to (and a little below) the current level.
The first low was in April 2010, followed by a sharp spike as the market corrected for three months. The second low was in April-May 2011, again followed by a VIX spike as the market corrected for five months. The third occasion was in March 2012, followed by a less dramatic VIX rise as the market corrected for two months. The final VIX low of these three years was in September 2012, and the market has pulled back for the two months since.
The VIX has been rising as the market retreated over these last two months. But it hasn't risen very much, and it's still in that borderline zone between high-eras and low-eras. For now (until proven otherwise), the presumption has to be that volatility is still low in a continuing high-VIX era, rather than (potentially) high in a new low-VIX era.
What does it all mean? Simply that additional market weakness is unlikely unless/until either (a) VIX spikes higher again, or (b) the market enters a new low-VIX era by sliding down below the boundary zone to about .14 to .16.
http://www.nasdaq.com/article/volatility-and-the-stock-market-cm191664#.URNAFB11_wM
Venturing Into Early-Stage Growth Stocks
For investors, young growth stocks can trigger dreams of wealth - and nightmares of poverty. These companies are often early-stage ventures that offer rapid revenue growth, but have yet to deliver earnings growth or much of a business track record. As such, the potential returns can be enormous, but investing in these stocks can also be risky. There are several points investors should consider when analyzing early-stage growth stocks.
Overview
The key features of early-stage growth stocks are rapid revenue growth but no earnings. Spending heavily to gain a market foothold, many growth companies - even those with strong sales revenue growth - can lose a lot of money in their early years. At the same time, these companies normally have a limited operating history, making it even more difficult for investors to judge the companies' current performance and value.
To stay on the safest side, many investors prefer to steer clear of companies with these risky characteristics. On the other hand, the next biggest and most rewarding stocks may be found among these kinds of stocks. The trick is to size up the risk.
To demonstrate how to evaluate an early-stage growth company's risk, let's consider Nasdaq-listed XM Satellite Radio Holdings (XMSR), a company that has been striving to become an established player in the fast-growing global satellite radio broadcasting market. Turning to XM's 2004 Form 10-K Annual Report, let's go over some key points for assessing the risk of an emerging growth stock.
Sales Growth
For starters, consider this growth trend. XM Satellite Radio delivered staggering sales growth in 2004. Scroll down to Selected Consolidated Financial Data (p.28, or Item 6 on the Table of Contents), and you will see that revenues grew from $0 in 2000, when XM Satellite Radio became publicly-listed, to more than $244 million in 2004. With sales growth of 168% in 2004, XM appears to have successfully taken advantage of growth opportunities. Importantly, the pace of sales growth was steadily upward - absent of unexpected swings - giving investors some reason to be confident that successful sales growth would continue.
Still, investors should take care: while the company's sales-growth record over the five-year period was certainly impressive, there is no guarantee that the company will be able to maintain that rate of growth into the future. In fact, the pace of growth could very well decline as the company satisfies demand for its products.
Profitability
You need to determine whether revenue growth is profitable. Look further down at XM's Consolidated Statement of Operations (p. F-5). The net loss shows us that in 2004, XM lost a lot of money - more than $642 million. That's no surprise: the company spent heavily on sales and marketing and invested in new radio programming content to attract subscribers. If those investments pay off, earnings could materialize.
But savvy investors want a clearer indication that one day the company will produce earnings. A good place to look is the company's profit margins. There should be signs that profit margins are steadily getting better - even if that means the margins are simply getting less negative.
Net Profit Margins = Net Profits after Taxes / Sales
Investors should be somewhat reassured. Although the company's losses accelerated between 2002 and 2004, its net margins saw a dramatic improvement, moving from a whopping -2,174.3% to -188.6% over the time period. Judging by its margin performance trend, XM offered heartening signs that it is moving towards profitability.
Cash Generation or Cash Burn?
Cash flow is another serious issue for newer, unprofitable companies in rapidly growing industries. As it can take time for early-stage companies to generate cash from operations, their survival depends on effective cash management so that they have an adequate cash supply to meet expenses. Emerging growth companies can face years of living on their bank balances. If a company eats through cash too fast, it runs the risk of going out of business.
So, it is good practice to look at the company's cash flow from operation.You will find that figure on XM's Consolidated Statement of Cash Flows (p. F-6). Investors may be discouraged to learn that XM's payments exceeded its cash receipts by more than $85.6 million in 2004 (see "net cash used in operating activities"). On the other hand, that number is significantly less than the $245 million of cash consumed the year before. That could signal a move towards cash flow breakeven.
When analyzing companies like XM that are cash flow negative, it's also worthwhile checking their burn rate, the rate at which a company currently uses up its supply of cash over time.
You will see on XM's Consolidated Balance Sheet (p. F-4) that at end-2004 the company had more than $717 million in cash in the bank. Assuming that annual net cash used in operating activities of $85.6 million and investing activities of $36.3 million (found lower on the Consolidated Statement of Cash Flows) stay at the same level, then XM has nearly six years before it will run out of cash. In other words, XM has a comfortable cushion of cash that will tie it over until it starts to generate cash internally. Investors need not worry about XM being forced to seek additional funds to finance day-to-day operations.
Fair Value
The best way to curb risk is to invest in companies at a fair value. Because a lot of emerging growth stocks like XM have no earnings, investors have to cast aside the traditional price-to-earnings (P/E) ratio for coming up with a fair valuation. In the absence of a P/E ratio, you can calculate the price-to-sales ratio and compare that figure with other, similar companies.
To find XM' price-to-sales ratio, we look at its stock price on the day it filed its 2004 Form 10-K Annual Report, which was on Mar 4, 2005. On that day, the stock closed at $33.11 (see XM's trading quote that day on Investopedia's stock research resource). With 29.11 million shares outstanding, XM's market value was about $7 billion.
So, at the end of 2004, XM traded for more than 28 times its current sales ($7 billion market value divided by 2004 sales of $244 million). At first glance, that appears to be an awfully rich valuation - normally investors look for companies with price-to-sales ratios in the single digits or even lower. However, priced at 28 times sales, XM is still less expensive than its closest peer Sirius Satellite Radio (SIRI), which traded for more than 80 times sales at year-end 2004. New-media technology stocks are typically very pricey - so some investors might argue that the company's rapid rate of growth combined with its steady progress towards profitability justify the high price-to-sales ratio. Then again, a lot of others would steer clear of the stock at that price.
Another way to evaluate fair value is discounted cash flow analysis. It offers a more rigorous approach to valuing emerging growth stocks. The starting point is forecasting the company's free cash flows available to shareholders. These are earnings adjusted for expenses and income that are not in cash (such as depreciation) and adjusted for required investments and changes in working capital. The series of forecasted free cash flows is then brought to current values by discounting with the company's cost of equity or overall cost of capital.
The Bottom Line
Investing in early-stage growth stocks can be a bit of guessing game. These companies are offering new services and products, and in many cases they are creating new markets. It can be awfully difficult to know their prospects with much certainty. That said, there are ways to identify their risks. Analysis of sales revenues, profitability and cash generation can help distinguish winners from losers.
Read more: http://www.investopedia.com/articles/stocks/05/earlygrowth.asp#ixzz2KA9GZFz4
Overview
The key features of early-stage growth stocks are rapid revenue growth but no earnings. Spending heavily to gain a market foothold, many growth companies - even those with strong sales revenue growth - can lose a lot of money in their early years. At the same time, these companies normally have a limited operating history, making it even more difficult for investors to judge the companies' current performance and value.
To stay on the safest side, many investors prefer to steer clear of companies with these risky characteristics. On the other hand, the next biggest and most rewarding stocks may be found among these kinds of stocks. The trick is to size up the risk.
To demonstrate how to evaluate an early-stage growth company's risk, let's consider Nasdaq-listed XM Satellite Radio Holdings (XMSR), a company that has been striving to become an established player in the fast-growing global satellite radio broadcasting market. Turning to XM's 2004 Form 10-K Annual Report, let's go over some key points for assessing the risk of an emerging growth stock.
Sales Growth
For starters, consider this growth trend. XM Satellite Radio delivered staggering sales growth in 2004. Scroll down to Selected Consolidated Financial Data (p.28, or Item 6 on the Table of Contents), and you will see that revenues grew from $0 in 2000, when XM Satellite Radio became publicly-listed, to more than $244 million in 2004. With sales growth of 168% in 2004, XM appears to have successfully taken advantage of growth opportunities. Importantly, the pace of sales growth was steadily upward - absent of unexpected swings - giving investors some reason to be confident that successful sales growth would continue.
Still, investors should take care: while the company's sales-growth record over the five-year period was certainly impressive, there is no guarantee that the company will be able to maintain that rate of growth into the future. In fact, the pace of growth could very well decline as the company satisfies demand for its products.
Profitability
You need to determine whether revenue growth is profitable. Look further down at XM's Consolidated Statement of Operations (p. F-5). The net loss shows us that in 2004, XM lost a lot of money - more than $642 million. That's no surprise: the company spent heavily on sales and marketing and invested in new radio programming content to attract subscribers. If those investments pay off, earnings could materialize.
But savvy investors want a clearer indication that one day the company will produce earnings. A good place to look is the company's profit margins. There should be signs that profit margins are steadily getting better - even if that means the margins are simply getting less negative.
Net Profit Margins = Net Profits after Taxes / Sales
Investors should be somewhat reassured. Although the company's losses accelerated between 2002 and 2004, its net margins saw a dramatic improvement, moving from a whopping -2,174.3% to -188.6% over the time period. Judging by its margin performance trend, XM offered heartening signs that it is moving towards profitability.
Cash Generation or Cash Burn?
Cash flow is another serious issue for newer, unprofitable companies in rapidly growing industries. As it can take time for early-stage companies to generate cash from operations, their survival depends on effective cash management so that they have an adequate cash supply to meet expenses. Emerging growth companies can face years of living on their bank balances. If a company eats through cash too fast, it runs the risk of going out of business.
So, it is good practice to look at the company's cash flow from operation.You will find that figure on XM's Consolidated Statement of Cash Flows (p. F-6). Investors may be discouraged to learn that XM's payments exceeded its cash receipts by more than $85.6 million in 2004 (see "net cash used in operating activities"). On the other hand, that number is significantly less than the $245 million of cash consumed the year before. That could signal a move towards cash flow breakeven.
When analyzing companies like XM that are cash flow negative, it's also worthwhile checking their burn rate, the rate at which a company currently uses up its supply of cash over time.
You will see on XM's Consolidated Balance Sheet (p. F-4) that at end-2004 the company had more than $717 million in cash in the bank. Assuming that annual net cash used in operating activities of $85.6 million and investing activities of $36.3 million (found lower on the Consolidated Statement of Cash Flows) stay at the same level, then XM has nearly six years before it will run out of cash. In other words, XM has a comfortable cushion of cash that will tie it over until it starts to generate cash internally. Investors need not worry about XM being forced to seek additional funds to finance day-to-day operations.
Fair Value
The best way to curb risk is to invest in companies at a fair value. Because a lot of emerging growth stocks like XM have no earnings, investors have to cast aside the traditional price-to-earnings (P/E) ratio for coming up with a fair valuation. In the absence of a P/E ratio, you can calculate the price-to-sales ratio and compare that figure with other, similar companies.
To find XM' price-to-sales ratio, we look at its stock price on the day it filed its 2004 Form 10-K Annual Report, which was on Mar 4, 2005. On that day, the stock closed at $33.11 (see XM's trading quote that day on Investopedia's stock research resource). With 29.11 million shares outstanding, XM's market value was about $7 billion.
So, at the end of 2004, XM traded for more than 28 times its current sales ($7 billion market value divided by 2004 sales of $244 million). At first glance, that appears to be an awfully rich valuation - normally investors look for companies with price-to-sales ratios in the single digits or even lower. However, priced at 28 times sales, XM is still less expensive than its closest peer Sirius Satellite Radio (SIRI), which traded for more than 80 times sales at year-end 2004. New-media technology stocks are typically very pricey - so some investors might argue that the company's rapid rate of growth combined with its steady progress towards profitability justify the high price-to-sales ratio. Then again, a lot of others would steer clear of the stock at that price.
Another way to evaluate fair value is discounted cash flow analysis. It offers a more rigorous approach to valuing emerging growth stocks. The starting point is forecasting the company's free cash flows available to shareholders. These are earnings adjusted for expenses and income that are not in cash (such as depreciation) and adjusted for required investments and changes in working capital. The series of forecasted free cash flows is then brought to current values by discounting with the company's cost of equity or overall cost of capital.
The Bottom Line
Investing in early-stage growth stocks can be a bit of guessing game. These companies are offering new services and products, and in many cases they are creating new markets. It can be awfully difficult to know their prospects with much certainty. That said, there are ways to identify their risks. Analysis of sales revenues, profitability and cash generation can help distinguish winners from losers.
Read more: http://www.investopedia.com/articles/stocks/05/earlygrowth.asp#ixzz2KA9GZFz4
Is Growth Always A Good Thing?
Rapid growth in revenue and earnings may be top priorities in corporate boardrooms, but these priorities are not always best for shareholders. We are often tempted to invest large amounts in risky or even mature companies that are beating the drum for fast growth, but investors should check that a company's growth ambitions are realistic and sustainable.
Growth's Attraction
Let's face it, it's hard not to be thrilled by the prospect of growth. We invest in growth stocks because we believe that these companies are able to take shareholder money and reinvest it for a return that is higher than what we can get elsewhere.
Besides, in traditional investing wisdom, growth in sales earnings and stock performance are inexorably linked. In his book "One Up on Wall Street," investment guru Peter Lynch preaches that stock prices follow corporate earnings over time. The idea has stuck because many investors look far and wide for the fastest-growing companies that will produce the greatest share-price appreciation.
Is Growth a Sure Thing?
That said, there is room to debate this rule of thumb. In a 2002 study of more than 2,000 public companies, California State University finance professor Cyrus Ramezani analyzed the relationship between growth and shareholder value. His surprising conclusion was that the companies with the fastest revenue growth (average annual sales growth of 167% over a 10-year period) showed, over the period studied, worse share price performance than slower growing firms (average growth of 26%). In other words, the hotshot companies could not maintain their growth rates, and their stocks suffered.
The Risks
Fast growth looks good, but companies can get into trouble when they grow too fast. Are they able to keep pace with their expansion, fill orders, hire and train enough qualified employees? The rush to boost sales can leave growing companies with a deepening difficulty to obtain their cash needs from operations. Risky, fast-growing startups can burn money for years before generating a positive cash flow. The higher the rate of spending money for growth, the greater the company's odds of later being forced to seek more capital. When extra capital is not available, big trouble is brewing for these companies and their investors.
Companies often try increasingly big - and risky - deals to push up growth rates. Consider the serial acquirer WorldCom. In the 1990s, the company racked up growth rates of more than 20% by buying up little-known telecom companies. It later required larger and larger acquisitions to show impressive revenue percentages and earnings growth. In hopes of sustaining growth momentum, WorldCom CEO Bernie Ebbers agreed to pay a whopping $115 billion for Sprint Corp. However, federal regulators blocked the deal on antitrust grounds. WorldCom's prospects for growth collapsed, along with the company's value. The lesson here is that investors need to consider carefully the sustainability of deal-driven growth strategies.
Being Realistic About Growth
Eventually every fast-growth industry becomes a slow-growth industry. Some companies, however, still pursue expansion long after growth opportunities have dried up. When managers ignore the option of offering investors dividends and stubbornly continue to pour earnings into expansions that generate returns lower than those of the market, bad news is on the horizon for investors.
For example, take McDonald's - as it experienced its first-ever losses in 2003, and its share price neared a 10-year low, the company finally began to admit that it was no longer a growth stock. But for several years beforehand, McDonald's had shrugged off shrinking profits and analysts' arguments that the world's biggest fast-food chain had saturated its market. Unwilling to give up on growth, McDonald's accelerated its rate of restaurant openings and advertising spending. Expansion not only eroded profits but ate up a huge chunk of the company's cash flow, which could have gone to investors as large dividends.
CEOs and managers have a duty to put the brakes on growth when it is unsustainable or incapable of creating value. That can be tough since CEOs normally want to build empires rather than maintain them. At the same time, management compensation at many companies is tied to growth in revenue and earnings.
However, CEO pride doesn't explain everything: the investing system favors growth. Market analysts rate a stock according to its ability to expand; accelerating growth receives the highest rating. Furthermore, tax rules privilege growth since capital gains are taxed in a lower tax bracket while dividends face higher income-tax rates.
The Bottom Line
Justifications for fast growth can quickly pile up, even when it isn't the most prudent of priorities. Companies that pursue growth at the cost of sustaining themselves may do more harm than good. When evaluating companies with aggressive growth policies, investors need to determine carefully whether these policies have higher drawbacks than benefits.
Read more: http://www.investopedia.com/articles/fundamental/03/082003.asp#ixzz2KA5lFtVB
Growth's Attraction
Let's face it, it's hard not to be thrilled by the prospect of growth. We invest in growth stocks because we believe that these companies are able to take shareholder money and reinvest it for a return that is higher than what we can get elsewhere.
Besides, in traditional investing wisdom, growth in sales earnings and stock performance are inexorably linked. In his book "One Up on Wall Street," investment guru Peter Lynch preaches that stock prices follow corporate earnings over time. The idea has stuck because many investors look far and wide for the fastest-growing companies that will produce the greatest share-price appreciation.
Is Growth a Sure Thing?
That said, there is room to debate this rule of thumb. In a 2002 study of more than 2,000 public companies, California State University finance professor Cyrus Ramezani analyzed the relationship between growth and shareholder value. His surprising conclusion was that the companies with the fastest revenue growth (average annual sales growth of 167% over a 10-year period) showed, over the period studied, worse share price performance than slower growing firms (average growth of 26%). In other words, the hotshot companies could not maintain their growth rates, and their stocks suffered.
The Risks
Fast growth looks good, but companies can get into trouble when they grow too fast. Are they able to keep pace with their expansion, fill orders, hire and train enough qualified employees? The rush to boost sales can leave growing companies with a deepening difficulty to obtain their cash needs from operations. Risky, fast-growing startups can burn money for years before generating a positive cash flow. The higher the rate of spending money for growth, the greater the company's odds of later being forced to seek more capital. When extra capital is not available, big trouble is brewing for these companies and their investors.
Companies often try increasingly big - and risky - deals to push up growth rates. Consider the serial acquirer WorldCom. In the 1990s, the company racked up growth rates of more than 20% by buying up little-known telecom companies. It later required larger and larger acquisitions to show impressive revenue percentages and earnings growth. In hopes of sustaining growth momentum, WorldCom CEO Bernie Ebbers agreed to pay a whopping $115 billion for Sprint Corp. However, federal regulators blocked the deal on antitrust grounds. WorldCom's prospects for growth collapsed, along with the company's value. The lesson here is that investors need to consider carefully the sustainability of deal-driven growth strategies.
Being Realistic About Growth
Eventually every fast-growth industry becomes a slow-growth industry. Some companies, however, still pursue expansion long after growth opportunities have dried up. When managers ignore the option of offering investors dividends and stubbornly continue to pour earnings into expansions that generate returns lower than those of the market, bad news is on the horizon for investors.
For example, take McDonald's - as it experienced its first-ever losses in 2003, and its share price neared a 10-year low, the company finally began to admit that it was no longer a growth stock. But for several years beforehand, McDonald's had shrugged off shrinking profits and analysts' arguments that the world's biggest fast-food chain had saturated its market. Unwilling to give up on growth, McDonald's accelerated its rate of restaurant openings and advertising spending. Expansion not only eroded profits but ate up a huge chunk of the company's cash flow, which could have gone to investors as large dividends.
CEOs and managers have a duty to put the brakes on growth when it is unsustainable or incapable of creating value. That can be tough since CEOs normally want to build empires rather than maintain them. At the same time, management compensation at many companies is tied to growth in revenue and earnings.
However, CEO pride doesn't explain everything: the investing system favors growth. Market analysts rate a stock according to its ability to expand; accelerating growth receives the highest rating. Furthermore, tax rules privilege growth since capital gains are taxed in a lower tax bracket while dividends face higher income-tax rates.
The Bottom Line
Justifications for fast growth can quickly pile up, even when it isn't the most prudent of priorities. Companies that pursue growth at the cost of sustaining themselves may do more harm than good. When evaluating companies with aggressive growth policies, investors need to determine carefully whether these policies have higher drawbacks than benefits.
Read more: http://www.investopedia.com/articles/fundamental/03/082003.asp#ixzz2KA5lFtVB
Tuesday, 5 February 2013
Tuesday, 22 January 2013
WARREN BUFFETT- DON'T MAKE THIS TERRIBLE MISTAKE
Buffett: Buying and selling stocks on current news is a mistake.
How to Invest like Warren Buffett
1. High ROCE + Low Debt
2. Predictable Earnings
3. Profits generate a lot of Cash Flows
4. Uncomplicated Business (you can understand)
5. Strong Brand + Pricing Power
6. Managers are also Owners of Business
Monday, 21 January 2013
Sunday, 20 January 2013
Friday, 18 January 2013
Tuesday, 15 January 2013
Apa ini? Listen .. listen carefully ........ Shameful!
The student who spoke her mind has my respect.
Monday, 14 January 2013
KLSE Market PE is 16.6 (11.1.2013)
| KLCI | 11.1.2013 | ||||||||
| Index Stock | Price | Mkt. Cap | Earnings | Dividends | Equity | ||||
| Stock Name | RM | RM (m) | RM (m) | RM (m) | RM (m) | ||||
| AMMB | 6.64 | 20014.2 | 1527.8 | 600.4 | 11152.5 | ||||
| CIMB | 7.66 | 56935 | 4037.9 | 1651.1 | 25940.4 | ||||
| RHB | 7.9 | 19704.2 | 1713.4 | 630.5 | 12944.9 | ||||
| HLFG | 14.42 | 15180.9 | 1167.8 | 258.1 | 8495.8 | ||||
| MBB | 9 | 75960.7 | 5798.5 | 3038.4 | 36967.5 | ||||
| PBB | 16.2 | 57217.2 | 3510.3 | 1716.5 | 14975.4 | ||||
| IOI | 5.05 | 32475.5 | 1794.2 | 1006.7 | 12668.7 | ||||
| MMC | 2.63 | 8008.5 | 333.7 | 120.1 | 6211.9 | ||||
| KLK | 22.48 | 23997.5 | 1212.0 | 695.9 | 7130.9 | ||||
| GENTING | 9.51 | 35372.3 | 2875.8 | 283.0 | 17741.9 | ||||
| PPB | 13 | 15411.5 | 981.6 | 277.4 | 14060.0 | ||||
| BAT | 60.9 | 17388.8 | 718.5 | 782.5 | 431.2 | ||||
| SIME | 9.59 | 57630.8 | 4146.1 | 2074.7 | 26021.0 | ||||
| UMW | 12.4 | 14486.8 | 503.0 | 362.2 | 4264.3 | ||||
| YTL | 1.81 | 19395 | 1259.4 | 213.3 | 13394.3 | ||||
| GENM | 3.61 | 21434.3 | 1498.9 | 514.4 | 12528.1 | ||||
| TM | 5.82 | 20820.5 | 1189.7 | 707.9 | 6975.9 | ||||
| AIRASIA | 2.89 | 8033.9 | 565.8 | 136.6 | 4058.6 | ||||
| UEMLAND | 2.15 | 9307.1 | 313.4 | 0.0 | 4848.3 | ||||
| PETCHEM | 13 | 49840 | 2637.0 | 1295.8 | 9623.0 | ||||
| MHB | 4.4 | 7040 | 206.5 | 161.9 | 2432.0 | ||||
| ARMADA | 3.82 | 11189.4 | 428.7 | 78.3 | 3544.3 | ||||
| TENAGA | 6.92 | 38349.9 | 4261.1 | 1112.1 | 36410.2 | ||||
| PETDAG | 22.96 | 22809.7 | 655.5 | 798.3 | 4778.5 | ||||
| HLBANK | 14.98 | 49128.8 | 2532.4 | 2996.9 | 3542.0 | ||||
| MAXIS | 6.55 | 49128.8 | 2532.4 | 2996.9 | 8100.6 | ||||
| PETGAS | 18.98 | 37556.3 | 1082.3 | 788.7 | 8884.5 | ||||
| YTLPOWER | 1.6 | 11740.7 | 1249.0 | 340.5 | 9539.3 | ||||
| AXIATA | 6.69 | 56920.8 | 2381.6 | 1593.8 | 19399.0 | ||||
| DIGI | 5.17 | 40196.8 | 1252.2 | 1366.7 | 1399.5 | ||||
| 902675.9 | 54366.7 | 28599.8 | 348464.7 | ||||||
| Market PE | 16.60 | ||||||||
| DY | 3.17% | ||||||||
| DPO | 0.53 | ||||||||
| Mkt cap/BV | 2.6 | ||||||||
| ROE | 15.6% | ||||||||
| EY | 6.02% | ||||||||
| Risk free int. | 3.40% | ||||||||
| ERP | 2.62% | (Fairly valued) | |||||||
| KLCI | |||||||||
| 11.1.2013 | 1682.7 | ||||||||
Related:
KLSE Market PE is 17.7 (19.10.12)
Sunday, 13 January 2013
Arithmetic vs logarithmic: Difference between charts plotted using these two scales
Narendra Nathan, ET Bureau Aug 27, 2012,
When data is plotted as a chart, it can be done using two types of scales—arithmetic or semi-logarithmic. The difference in scale can completely alter the shape of the chart even though it is plotted using the same set of data. Consider the three charts given below, which use theSensex data since its inception in 1979 till now. But why does one need to use the semi-logarithmic scale when arithmetic scale is commonly used for plotting charts. This is in order to overcome the inherent weakness of the arithmetic charts.
When data is plotted as a chart, it can be done using two types of scales—arithmetic or semi-logarithmic. The difference in scale can completely alter the shape of the chart even though it is plotted using the same set of data. Consider the three charts given below, which use theSensex data since its inception in 1979 till now. But why does one need to use the semi-logarithmic scale when arithmetic scale is commonly used for plotting charts. This is in order to overcome the inherent weakness of the arithmetic charts.
Arithmetic charts
In arithmetic or linear charts, both X and Y axes scales are plotted at an equal distance. For instance, the Sensex movement from 15,000 to 16,000, that is, an increase of 1,000 points, is treated as equal to the Sensex movement from 16,000 to 17,000, which is another 1,000 points.
In arithmetic or linear charts, both X and Y axes scales are plotted at an equal distance. For instance, the Sensex movement from 15,000 to 16,000, that is, an increase of 1,000 points, is treated as equal to the Sensex movement from 16,000 to 17,000, which is another 1,000 points.
This works fine when the data range is small, but will distort the picture when the range is big. Consider the Sensex movement from 20,000 to 21,000, which was a mere 5% increase, but the movement of the first 1,000 points in the Sensex, that is, from 100 to 1,100, was a whopping 1,000% increase. By treating them as equal, the arithmetic chart distorts the picture. This explains why it seems as if the Sensex was almost flat for the first 10 years of its existence in the arithmetic chart.
Logarithmic charts
Logarithmic charts are commonly used in science and engineering when you need the data to be displayed accurately. This is also a necessity when the data that needs to be plotted varies widely. In such charts, the logarithm of the data value (Sensex in the given example) is used as a base to fix the gaps between each data points on the Y axis. This process makes sure that the percentage increase between two data values is depicted clearly. To understand this in a better manner, consider the logarithmic charts given below. Note that the gap between 100 and 200 (100% increase) is equal to the gap between 200 and 400 (next 100% increase). The same gap is maintained for the Sensex increase from 1,000 to 2,000 or from 10,000 to 20,000. Semi-logarithmic charts
In logarithmic charts, both the X and Y axes are plotted using the logarithmic scale. Since there is no possibility of distortion in the X axis (where the date range is plotted), we can continue to use the arithmetic scale while plotting the share price data. In other words, the logarithmic scale is used only along one axis, that is, the Y axis, and therefore, these charts are called semi-log charts.
Advantages
The semi-logarithmic charts can be of immense help while plotting long-term charts, or when the price points show significant volatility even while plotting short-term charts. This is because the chart patterns will appear as more clear in semi-logarithmic scale charts. For example, the very long-term uptrend line in the Sensex is clearly visible in the semi-logarithmic chart (see Semi-logarithmic scale with trendline), not in the arithmetic chart. Similarly, the Sensex was constrained in a slightly upward moving channel for 13 years in the middle, that is, between 1992 and 2005, and this is clearly visible only in the semi-logarithmic chart (see Semi-logarithmic scale with channel). One can plot the charts in the semi-logarithmic scale to easily identify several other chart patterns, some of which we shall explain in the coming weeks.
http://articles.economictimes.indiatimes.com/2012-08-27/news/33425208_1_charts-sensex-arithmetic
Semilogarithmic-scale line graphs
If we use a logarithmic scale on the y-axis and if the x-axis remains the same (arithmetic scale), we create a semi-logarithmic scale line graph. With a logarithmic scale on the y-axis we represent the relative change of y over time rather than its absolute change over time. Semi-logarithmic scale line graphs are used to present and interpret rates of change over time rather than magnitude of change. They also allow showing very different magnitudes and ranges of rates between two lines (e.g. high incidence and low mortality rates for the same disease).
Semi-logarithmic scale paper:
- On the y-axis, intervals are logarithmic and no longer arithmetic.
- There are several cycles of tick marks on the y-axis. Each corresponds to an equal distance on the y-axis.
- The values of one cycle are 10 times greater than the values of the previous cycle.
- Within a cycle the 10 tick marks are not equally distant (distance from 2 to 3 is different than distance from 3 to 4). Their progression is geometric, not arithmetic.
- The y axis can cover a large range of y values.
The following characteristics are noteworthy:
- The slope of the line indicates the rate of change (the relative change) of y over time.
- A horizontal straight line indicates no change.
- An upward or downward straight line slope indicates a constant rate of increase or decrease in the measured indicator (e.g. rate) over time.
- Two parallel lines indicate similar rate of change over time.
Friday, 11 January 2013
Tesco’s UK sales growth highest in three years
Tesco’s UK sales growth highest in three years
Published: 2013/01/11
LONDON: Britain’s Tesco plc said its £1 billion (RM4.86 billion) turnaround plan for its home market was starting to work as it posted its highest sales growth in three years over the Christmas period.
Tesco, the world’s third-largest retailer, beat forecasts for underlying sales growth, regaining an edge after a dismal Christmas in 2011 prompted the group’s first profit warning in 20 years and a strategic rethink.
Sales at British stores open more than a year, excluding fuel and VAT sales tax, grew 1.8 per cent in the six weeks to January 5, part of Tesco’s fiscal fourth quarter, compared with analysts’ forecasts in a range of up 0.5 to 1.5 per cent and with a third-quarter fall of 0.6 per cent. Reuters
http://www.fool.com/investing/international/2013/01/09/whats-in-store-for-tescos-shareholders.aspx
Published: 2013/01/11
LONDON: Britain’s Tesco plc said its £1 billion (RM4.86 billion) turnaround plan for its home market was starting to work as it posted its highest sales growth in three years over the Christmas period.
Tesco, the world’s third-largest retailer, beat forecasts for underlying sales growth, regaining an edge after a dismal Christmas in 2011 prompted the group’s first profit warning in 20 years and a strategic rethink.
Sales at British stores open more than a year, excluding fuel and VAT sales tax, grew 1.8 per cent in the six weeks to January 5, part of Tesco’s fiscal fourth quarter, compared with analysts’ forecasts in a range of up 0.5 to 1.5 per cent and with a third-quarter fall of 0.6 per cent. Reuters
http://www.fool.com/investing/international/2013/01/09/whats-in-store-for-tescos-shareholders.aspx
Thursday, 10 January 2013
Wednesday, 9 January 2013
MALAYSIA'S first Islamic bond (sukuk) for retail investors
Minimum profit rate of 3.7pc
Published: 2013/01/09
MALAYSIA'S first Islamic bond (sukuk) for retail investors, launched yesterday and expected to be listed on February 8, will have a minimum profit rate of 3.7 per cent a year.
The RM300 million sukuk with a 10-year tenure was issued by DanaInfra Nasional Bhd, a unit under the Ministry of Finance, to fund the Mass Rapid Transit (MRT) project that will run between Kajang and Sungai Buloh in the Klang Valley. It was launched by Prime Minister Datuk Seri Najib Razak.
The issue is part of a larger RM1.5 billion sukuk that's being sold by DanaInfra, of which RM1.2 billion is for institutional investors.
"It will be better than the fixed deposit (FD) return and better than the MGS (Malaysian Government Securities, or government bonds)," Treasury secretary-general Datuk Seri Mohd Irwan Serigar Abdullah told reporters after the launch yesterday.
Bankers said the actual profit rate for the retail sukuk, which will depend on investor demand and the prevailing market interest rate, will be determined at the close of the book building exercise of the institutional offering.
Datuk Lee Kok Kwan of CIMB Investment Bank, one of four banks that are the joint lead arrangers for the issue, said he was confident that there would be strong demand for the retail sukuk.
He pointed out that unlike fixed deposit, income that investors derive from sukuk is not subject to tax.
"And the main assurance is that, post-listing, the liquidity will be there as the four banks are obligated to market them," he remarked.
Bursa Malaysia chief executive officer Datuk Tajuddin Atan said the retail sukuk, which opens up a new asset class for people to invest in, cements Malaysia's role as a top sukuk marketplace.
Previously, bonds or sukuk were accessible only to high-net worth and institutional investors.
"To make this sustainable, we need a pipeline, and this is being worked on. DanaInfra has a big pipeline of sukuk, but we're also looking at other issuers," he said.
The sukuk is meant for investors who want to diversify their portfolio. The minimum subscription amount for an ETBS is RM1,000, which will get an investor one board lot which comprises 10 units with a principal price of RM100 each.
Read more: Minimum profit rate of 3.7pc http://www.btimes.com.my/Current_News/BTIMES/articles/sukuk/Article/#ixzz2HQbadqdL
Friday, 4 January 2013
Indonesia: An industry-led growth economy
Cyrillus Harinowo Hadiwerdoyo, Jakarta | Opinion | Fri, January 04 2013, 9:10 AM
Malaysia's main market index ends year at all time high; advances 10.34% in 2012.
Tuesday January 1, 2013
Malaysia's main market index ends year at all time high
By TEE LIN SAY
linsay@thestar.com.my
Local bourse advances 10.34% in 2012
PETALING JAYA: The FBM KLCI finished 2012 with a 10.34% gain to close at an all-time high of 1,688.95 as election concerns, defensive trading and high cash holding continued to dominate the equity scene in Malaysia. For the day, the local bourse was up 7.62 points on volume of RM1.31bil shares.
The KLCI's gains were mostly done in the last 15 minutes of trading on selected key blue chip stocks.
Kuala Lumpur Kepong Bhd was the biggest gainer of the day, closing RM2.06 to RM24, pushing up the KLCI by 3.39 points while Malayan Banking Bhd rose 12 sen to RM9.02 and nudged the index by 2.25 points. AEON Co (M) Bhd was on the gainers list, up RM1.42 to close at RM14.12.
Nonetheless, the KLCI is still one of the underperformers when compared with its regional peers. It is only ahead of the Shanghai Composite Index, Taiwan and South Korea, which recorded year to date gains of 3.17%, 8.87% and 9.38%, respectively.
Not surprisingly, it was the smaller Ace market counters that hogged the gainers list for the year.
These included Microlink Solutions Bhd with a 308% gain to 51 sen andBorneo Aqua Harvest Bhd with a 118.18% gain to 72 sen.
Among the bigger stocks that did well included KLCC Property Holdings Bhd which gained 99.37% to RM6.28 on plans to form a stapled real estate investment trust (REIT).
KLCC Property's restructuring exercise will involve the company acquiring the remaining 49.5% stake in Midciti Resources Sdn Bhdwhich owns the Petronas Twin Towers from KLCC Holdings Bhd for RM2.86bil. Following that, KLCC Property will inject three properties into KLCC REIT.
The properties are the Twin Towers, Menara ExxonMobile and Menara 3 Petronas. Thus once the restructuring is completed, KLCC Property shareholders will own shares and units in both KLCC Property and KLCC REIT.
The best performing stock on the Main Market for the year was Bright Packaging Industry Bhd, which was up 230.58% on a year to date basis.
It closed at RM2, which is also its 10-year high, on news that the company may see a change in its board and management.
Bright manufactures aluminium foil packaging materials which are mainly supplied to the tobacco industry. Last week, the company told Bursa Malaysia that four substantial shareholders with a collective stake of 31.2% had requested an EGM to remove existing directors and appoint new ones.
Over in the Ace market, the best performing stock and overall best performing stock for whole of Bursa Malaysia for 2012 was Green Ocean Corp Bhd.
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