KLCI 30 highest dividend stocks

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Stock name				ISIN	Last trade		P/E	EPS	Div PS	Ex Div Date	Payout Ratio	Div Yield
MALAYAN BANKING				MYL1155OO000	8.84		13.5	0.7	0.60	Nov 25 2011	92	6.79
MAXIS				MYL5051OO007	6.10		18.1	0.3	0.32	Mar 13 2012	95	5.25
MALAYSIA INTL SHIPPING				MYL3816OO005	5.16		0.0	-0.4	0.25	Sep 26 2011	-62	4.84
BAT MALAYSIA				MYL4162OO003	55.00		21.8	2.5	2.46	Mar 06 2012	98	4.47
DIGI.COM				MYL6947OO005	3.93		24.4	0.2	0.18	Feb 17 2012	109	4.45
TELEKOM MALAYSIA				MYL4863OO006	5.39		16.2	0.3	0.23	Sep 08 2011	69	4.25
UMW HOLDINGS				MYL4588OO009	7.51		17.4	0.4	0.30	Jan 11 2012	69	3.99
RHB CAPITAL				MYL1066OO009	7.52		10.9	0.7	0.29	Oct 12 2011	43	3.91
YTL POWER INTL				MYL6742OO000	1.79		10.0	0.2	0.07	Mar 13 2012	37	3.66
KUALA LUMPUR KEPONG				MYL2445OO004	23.80		15.8	1.5	0.85	Feb 21 2012	56	3.57
PUBLIC BANK				MYL1295OO004	13.74		13.4	1.0	0.48	Feb 15 2012	47	3.49
GAMUDA				MYL5398OO002	3.57		14.9	0.2	0.12	Jan 04 2012	50	3.36
PETRONAS CHEMICALS				MYL5183OO008	6.70		15.1	0.4	0.22	Dec 07 2011	50	3.32
PETRONAS DAGANGAN				MYL5681OO001	18.84		21.2	0.9	0.62	Mar 08 2012	70	3.32
SIME DARBY				MYL4197OO009	9.89		13.7	0.7	0.30	Nov 29 2011	42	3.03
IOI CORP				MYL1961OO001	5.36		17.2	0.3	0.16	Mar 14 2012	51	2.99
PETRONAS GAS				MYL6033OO004	16.80		24.7	0.7	0.50	Dec 08 2011	73	2.98
AMMB HOLDINGS				MYL1015OO006	6.33		12.8	0.5	0.19	Nov 30 2011	38	2.94
CIMB GROUP HOLDINGS				MYL1023OO000	7.63		14.1	0.5	0.22	Mar 09 2012	41	2.88
GENTING MALAYSIA				MYL4715OO008	3.85		15.3	0.3	0.08	Sep 28 2011	33	2.13
HONG LEONG BANK				MYL5819OO007	12.46		14.0	0.9	0.26	Mar 13 2012	29	2.09
HONG LEONG FINANCAL				MYL1082OO006	12.36		12.2	1.0	0.25	Dec 13 2011	25	2.02
AXIATA GROUP				MYL6888OO001	5.36		19.4	0.3	0.09	Oct 20 2011	33	1.68
PPB GROUP				MYL4065OO008	16.70		20.2	0.8	0.28	Sep 09 2011	34	1.68
MMC CORP				MYL2194OO008	2.73		24.8	0.1	0.04	May 27 2011	32	1.28
YTL CORP				MYL4677OO000	1.71		14.3	0.1	0.02	Nov 04 2011	17	1.17
GENTING				MYL3182OO002	10.92		14.2	0.8	0.08	Sep 28 2011	10	0.73
MALAYSIAN AIRLINE SYSTEM				MYL3786OO000	1.28		0.0	0.0	0.00			0.00
PLUS EXPRESSWAYS				MYL5052OO005	0.00		0.0	0.0	0.00			0.00
TENAGA NASIONAL				MYL5347OO009	6.59		20.8	0.0	0.00			0.00

http://www.topyields.nl/Top-dividend-yields-of-KLCI30.php

Who is a Value Investor?

Morningstar is a widely used source of mutual fund information, and it categorized 38 percent of mutual funds as value funds in 2001. But how did it make this categorization? While it did look at the way these funds described themselves in their prospectus, the ultimate categorization was based on a far simpler measure. Any fund that invested in stocks with low price-to-book value ratios or low price earnings ratios, relative to the market, was categorized as a value fund. This categorization is fairly conventional, but we believe that it is too narrow a definition and misses the essence of value investing.

Another widely used definition of value investors suggests that they are investors interested in buying stocks for less than what they are worth. But that is too broad a definition, because you could potentially categorize most active investors as value investors on this basis. After all, growth investors (who are often viewed as competing with value investors) also want to buy stocks for less than what they are worth.

So, what is the essence of value investing? To understand value investing, we have to begin with the proposition that the value of a firm is derived from two sources—

1. investments that the firm has already made (assets in place) and 
2. expected future investments (growth opportunities). 

What sets value investors apart is their desire to buy firms for less than what their assets-in-place are worth. Consequently, value investors tend to be leery of large premiums paid by markets for growth opportunities and try to find their best bargains in more mature companies that are out of favor. 

Even with this definition of value investing, there are three distinct strands that we see in value investing. 

1. The first and perhaps simplest form of value investing is passive screening, where companies are put through a number of investment screens—for example, low PE ratios, marketability, and low risk—and those that pass the screens are categorized as good investments. 
2. In its second form, you have contrarian value investing, where you buy assets that are viewed as untouchable by other investors because of poor past performance or bad news about them. 
3. In its third form, you become an activist value investor who buys equity in undervalued or poorly managed companies but then uses the power of your position (which has to be a significant one) to push for change that will unlock this value.

http://media.wiley.com/product_data/excerpt/32/04713450/0471345032.pdf

3 Stages of a Bull Market and 3 Stages of a Bear Market

2011 Value Investing Congress Notes
http://www.scribd.com/doc/54958483/2011-Value-Investing-Congress-Notes

The swing of the pendulum 
o Constantly going between greed and fear, risk tolerance and risk aversion, and optimism and pessimism
o In theory, the pendulum should be at the happy medium

 On average it is in the middle 
 But it spends little time there
 Excesses constitute the errors of herd behavior

 3 stages of a bull market 
 Few people feel things are getting better
 Most people realize improvement is taking place
 Everyone thinks things will get better forever
 "What the wise man does in the beginning, the fool does in the end."
o The last buyer pays the price 

 3 stages of a bear market 
 Few people realize that things are overpriced and dangerous
 Most people see the decline is underway
 Everyone believes that things will get worse forever
o Great opportunity to buy if we can behave counter-cyclically - Importance of being a contrarian.



Ben Claremon: The Inoculated Investor http://inoculatedinvestor.blogspot.com/  

Assessing Buffett. Is Warren Buffett worthy of his reputation?

It might be presumptuous of us to assess an investor who has acquired mythic status, but is Warren Buffett worthy of his reputation? If so, what accounts for his success, and can it be replicated? We believe that
his reputation is well deserved and that his extended run of success cannot be attributed to luck. While he has had his bad years, he has always bounced back in subsequent years. The secret to his success seems to rest on the long view he brings to companies and his discipline—the unwillingness to change investment philosophies even in the midst of short-term failure.

Much has been made of the fact that Buffett was a student of Graham at Columbia University and their adherence to value investing. Warren Buffett’s investment strategy is more complex than Graham’s original passive screening approach. Unlike Graham, whose investment strategy was inherently conservative, Buffett’s strategy seems to extend across a far more diverse range of companies, from high-growth firms like Coca-Cola to staid firms such as Blue Chip Stamps. While Graham and Buffett both might use screens to find stocks, the key difference as we see it between the two men is that Graham strictly adhered to quantitative screens whereas Buffett has been more willing to consider qualitative screens. For instance, Buffett has always put a significant weight on both the credibility and the competence of top managers when investing in a company.


In more recent years, he has had to struggle with two byproducts of his success.

• Buffett’s record of picking winners has attracted a crowd of imitators who follow his every move and buy everything be buys, making it difficult for him to accumulate large positions at attractive prices. 
• At the same time, the larger funds at his disposal imply that he is investing far more than he did two or three decades ago in each of the companies that he takes a position in, which makes it more difficult for him to be a passive investor. It should come as no surprise, therefore, that he is a much more activist investor than he used to be, serving on boards of The Washington Post and other companies and even operating as interim chairman of Salomon Brothers during the early 1990s

http://media.wiley.com/product_data/excerpt/32/04713450/0471345032.pdf

BUFFETT'S TENETS

Roger Lowenstein, in his excellent book on Buffett, suggests that Buffett’s success can be traced to his adherence to the basic notion that when you buy a stock, you are buying an underlying business.

Business Tenets:

The business the company is in should be simple and understandable. In fact, one of the few critiques of Buffett was his refusal to buy technology companies, whose business he said was difficult to understand.

The firm should have a consistent operating history, manifested in operating earnings that are stable and predictable.

The firm should be in a business with favorable long-term prospects.

Management Tenets:

The managers of the company should be candid. As evidenced by the way he treated his own stockholders, Buffett put a premium on managers he trusted. Part of the reason he made an investment in The Washington Post was the high regard that he had for Katherine Graham, who inherited the paper from her husband.


The managers of the company should be leaders and not followers. In practical terms, Buffett was looking for companies that mapped out their own long-term strategies rather than imitating other firms.

Financial Tenets:

The company should have a high return on equity, but rather than base the return on equity on accounting net income, Buffett used a modified version of what he called owner earnings:


Owner Earnings Net income Depreciation and Amortization – Capital Expenditures

This concept is very close to a free cash flow to equity.

The company should have high and stable profit margins and a history of creating value for its stockholders.

Market Tenets:

In determining value, much has been made of Buffett’s use of a risk-free rate to discount cash flows. Because he is known to use conservative estimates of earnings and because the firms he invests in tend to be stable firms, it looks to us like he makes his risk adjustment in the cash flows rather than the discount rate.

In keeping with Buffett’s views of Mr. Market as capricious and moody, even valuable companies can be bought at attractive prices when investors turn away from them.


http://media.wiley.com/product_data/excerpt/32/04713450/0471345032.pdf

Benjamin Graham and his 9 commandments of value investing

GRAHAM'S MAXIMS ON INVESTING

Janet Lowe, in her biography of Ben Graham, notes that while his lectures were based upon practical examples, he had a series of maxims that he emphasized on investing. Because these maxims can be viewed as the equivalent of the 10 commandments of value investing, they are worth revisiting:

1. Be an investor, not a speculator. Graham believed that investors bought companies for the long term, but speculators looked for short-term profits.

2. Know the asking price. Even the best company can be a poor investment at the wrong (too high) price.

3. Rake the market for bargains. Markets make mistakes.

4. Stay disciplined and buy the formula:
E (2g + 8.5) (T.Bond rate/Y)
where E = Earnings per share, g = Expected growth rate in earnings, Y is the yield on AAA-rated corporate bonds, and 8.5 is the appropriate multiple for a firm with no growth.

For example, consider a stock with $2 in earnings in 2002 and 10 percent growth rate when the Treasury bond rate was 5 percent and the AAA bond rate was 6 percent. The formula would have yielded the following price:
Price = $2.00 (2 (10)+8.5)* (5/6) = $47.5

If the stock traded at less than this price, you would buy the stock.

5. Regard corporate figures with suspicion (advice that carries resonance in the aftermath of recent accounting scandals).

6. Diversify. Do not bet it all on one or a few stocks.

7. When in doubt, stick to quality.


8. Defend your shareholder’s rights. This topic was another issue on which Graham was ahead of his time. He was one of the first advocates of strong corporate governance.

9. Be patient. This follows directly from the first maxim.

It was Ben Graham who created the figure of Mr. Market, which was later much referenced by Warren Buffett. As described by Mr. Graham, Mr. Market was a manic-depressive who did not mind being ignored and was there to serve and not to lead you. Investors, he argued, could take advantage of Mr. Market’s volatile disposition to make money.



http://media.wiley.com/product_data/excerpt/32/04713450/0471345032.pdf

Benjamin Graham: The Father of Screening

Many value investors claim to trace their antecedents to Ben Graham and to use the book on security analysis that he co-authored with David Dodd in 1934 as their investment bible. But who was Ben Graham, and what were his views on investing? Did he invent screening, and do his screens still work?

Graham’s Screens 

Ben Graham started life as a financial analyst and later was part of an investment partnership on Wall Street. While he was successful on both counts, his reputation was made in the classroom. He taught at Columbia and the New York Institute of Finance for more than three decades and during that period developed a loyal following among his students. In fact, much of Mr. Graham’s fame comes from the success enjoyed by his students in the market.

It was in the first edition of Security Analysis that Ben Graham put his mind to converting his views on markets to specific screens that could be used to find undervalued stocks. While the numbers in the screens did change slightly from edition to edition, they preserved their original form and are as follows:

1. Earnings to price ratio that is double the AAA bond yield
2. PE of the stock has to be less than 40 percent of the average PE for all stocks over the past five years
3. Dividend Yield > Two-thirds of the AAA Corporate Bond Yield
4. Price < Two-thirds of Tangible Book Value1
5. Price < Two-thirds of  Net Current Asset Value (NCAV), where net current asset value is defined as liquid current assets including cash minus current liabilities
6. Debt-Equity Ratio (Book Value) has to be less than one
7. Current Assets > Twice Current Liabilities
8. Debt < Twice Net Current Assets
9. Historical Growth in EPS (over last 10 years) > 7%
10. No more than two years of declining earnings over the previous 10 years


Tangible book value is computed by subtracting the value of intangible assets, such as goodwill, from the total book value.


Any stock that passes all 10 screens, Graham argued, would make a worthwhile investment. It is worth noting that while there have been a number of screens that have been developed by practitioners since these first appeared, many of them are derived from or are subsets of these original screens.

The Performance 

How well do Ben Graham’s screens work when it comes to picking stocks? 

• Henry Oppenheimer studied the portfolios obtained from these screens from 1974 to 1981 and concluded that you could have made an annual return well in excess of the market. 
• As we will see later in this section, academics have tested individual screens—low PE ratios and high dividend yields to name two—in recent years and have found that they indeed yield portfolios that deliver higher returns. 
• Mark Hulbert, who evaluates the performance of investment newsletters, found newsletters that espoused to follow Graham did much better than other newsletters.

http://media.wiley.com/product_data/excerpt/32/04713450/0471345032.pdf

Value Investing - Key Points

Value investors are bargain hunters and many investors describe themselves as such. But who is a value investor? We argue that value investors come in many forms. 

• Some value investors use specific criteria to screen for what they categorize as undervalued stocks and invest in these stocks for the long term. 
• Other value investors believe that bargains are best found in the aftermath of a sell-off and that the best time to buy a stock is when it is down. 
• Still others adopt a more activist approach, where they buy large stakes in companies that they believe are undervalued and push for changes that they believe will unleash this value.

Value investing is backed by empirical evidence from financial theorists and by anecdotal evidence—the success of value investors like Ben Graham and Warren Buffett are part of investment mythology—but it is
not for all investors.  Investors need to consider what they bring to the table to succeed at value investing.


http://media.wiley.com/product_data/excerpt/32/04713450/0471345032.pdf

Lessons for Value Investors

To be a value investor, you should have:

• A long-time horizon: While the empirical evidence is strongly supportive of the long-term success of value investing, the key word is long term. If you have a time horizon that is less than two or three years, you might never see the promised rewards to value investing.  

• Be willing to bear risk: Contrary to popular opinion, value investing strategies can entail a great deal of risk. Firms that look cheap on a price to earnings or price to book basis can be exposed to both earnings volatility and default risk.

In addition to these, to be a contrarian value investor, you need:

• A tolerance for bad news: As a contrarian investor who buys stocks that are down and out, you should be ready for more bad news to come out about these stocks. In other words, things will often get worse before they get better.

In addition to all of the above, to be an activist investor, you have to:

• Be willing to fight: Incumbent managers in companies that you are trying to change will seldom give in without a fight.

http://media.wiley.com/product_data/excerpt/32/04713450/0471345032.pdf

Nearly 50% of all US stocks trading for less than $5 per share (6.3.2009)

http://myinvestingnotes.blogspot.com/2009/03/nearly-50-of-all-us-stocks-trading-for.html