30 November 2011

Price per Earnings (PE) Ratio (PER)- Controllable Variable or Uncontrolable Variables

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Controllable variable is a variable which is under control by us, while Uncontrollable variable is its opposite.
For Price per Earnings (PE) Ratio, or PER, we can analogue the price is a controllable variable and the Earnings is an uncontrollable variable.

The price that we are willing to pay to a particular investment is controllable by ourself.  Although sometimes people will tell us that a particular business "should" have particular PER, it does not mean we should invest it with the PER. In most of the time, the higher the PER, the lower the safety margin. For example, if a particular investment already has PER of 20, (Price/Earning = $2.00/$0.10 = 20), with estimated profit of 100%, its PER must soar to 40,with the assumption that its earning is maintained.



25 November 2011

Cash Machine: Low Capital Expense (CAPEX) + Low Fixed and Variable Costs

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"Most successful companies earn a lot while using little, and firms that spend little and sell their wares quickly are best" - Stock Screen by Jack Hough in Smart Money (October 2009)

I am quite agree the statement of Jack. In fact, if a particular company can do what Jack said, it is a supreme company. Only supreme company can reduce or maintain a very low Capital Expense (CAPEX) and other fixed and variable costs to grow its business. With a very low CAPEX and other costs, this kind of company is the so-called "Cash Machine". Every day, the goods or services of the company will become CASH, and then, only portion of CASH is consumed by CAPEX and other costs, and the remainder cash, of course, will soon flow into shareholders' pocket (as dividend) or retained to expand its business significantly (business acquisition).



24 November 2011

Demand VS Supply in Stock Market: Greed + Fear = Big Disaster!!

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Firstly, let me give you a situation:

Demand
Most people:"Want to buy a Stock which will move up very quickly."
Supply
Company H: "Let me help you!!" (But will down very quickly too. (Silent))

Every time when I see the so-called victims complaint about be cheated, fall in trap, etc. Most of the time, nothing is wrong or correct. Because nobody forces you to put your money out from your pocket (even you have many reasons to do it due to greed and fear).

Greed about losing "opportunity" to earn money.
Fear about the same thing - "losing "opportunity" to earn money".

Therefore, Greed + Fear = Double Fears = Double Greeds = Big Disaster!!!

Therefore, please bear in mind that always be responsible to our actions and think twice before act.



23 November 2011

TESCO CASH Voucher 24 - 25 November 2011

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Surprise, surprise. Tesco Cash Voucher is available for 24 and 25 (2 days) November 2011. To get this Cash Voucher, simple go to Tesco official website. For more information about my personal views, experiences and summary about Tesco Cash Voucher, do visit my previous posts at

TESCO RM10 Cash Voucher: Download and Spend it now
and
TESCO RM10 Voucher giveaway That's all for today




KEN HOLDINGS BHD (KEN, 7323) - Q3 2011: Within Expectation

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Everyday, one of the happy activities I do is to read the financial reports of my invested companies. What I feel about from the financial report is that it is really very difficult to earn 10sen from RM1.00 annually. You may think that it is a easy task. Let me clarify properly: get profit from RM0.10 from RM1.00 annually is equivalent to interest rate of 10% annually, which is 300% more than our current fixed deposit rate (around 3.3%). So, are you still think it is a easy task to complete annually?

Let's go back to the main focus today, KEN (7323) third quarter report also comes out already. So far so good. After receiving so many Cash from receivable, finally, KEN did what I expect it to do from last quarter, that is, CAPEX.



OPCOM HOLDINGS BHD (OPCOM, 0035) Q3 Quarter Report 2011: So Far So Good.

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Personally, I quite like OPCOM business even using the special dividend I received from OPCOM to top up some more OPCOM shares to enjoy the grow of its future earning. Although this Q3 report is relatively less attractive compared to preceding year's corresponding quarter and preceding quarter, OPCOM still maintain its attractive areas (Zero borrowing, low CAPEX, Strong Cash flow, lots of Cash).

Let's take a look at what OPCOM comments from its Q3 report:
Review of Performance
The Group registered revenue of RM22.6 million and profit before tax of RM6.7 million in current quarter as compared to revenue and profit before tax of RM34.5 million and RM9.3 million respectively in the preceding year's corresponding quarter. The sales of the Group's products was affected by the festive season which resulted in lower revenue contribution in current quarter. However, profit before tax margin for the current quarter was higher as there was relatively more sales of higher margin products.



20 November 2011

Insurance - Be aware of Automatic Premium Loan (APL)

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"Don't worry! All you need to pay is for the first six year. After then, the profit of the insurance will cover the rest of premium payment". Does it sound familiar to you? Be careful. There is no free lunch in real world. Based on my personal experience, we should always avoid "Automatic Premium Loan (APL)".

Interest Rate of Automatic Premium Loan (APL)
The first thing we need to concern about is how many interest rate of the loan. Normally, it is quite high, more than 6%, for example. Besides, the policy will only valid with the condition that the cash value must always more than the payable loan.

For instance, a total of $3000 have been paid for 6 years. Then the insurance will keep active as long as the amount of loan (automatic premium loan) is lower than the cash value.



17 November 2011

TESCO RM10 Cash Voucher: Download and Spend it now

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Personally, I quite like the strategy of TESCO to giveaway RM10 Cash Voucher as a reward to its clubmembers. RM10 discount when you are spending a total of RM100 means you can save 10% from your purchases in TESCO. Besides, if you are using credit card and TESCO reward card (of course, you must have it to enjoy this privilege), you can get at least another 0.5% debate from your credit card and the reward card, respectively, or total at least 1%.

This time, TESCO has implemented more clear guideline for this exclusive rewards compared to previous TESCO RM10 Voucher giveaway as stated below:



15 November 2011

How to Estimate the Enter Point in Stock Market: Potential Profit / lose = Risk / Uncertainty - Case study: MMODE (0059)

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We always want to know when is the best time to buy or sell in stock market. In fact, that is no such a thing in real world. All is about risk and potential profit/lose. The higher the risk, the high the potential profit/lose. And the risk is based on the uncertainty of a particular business. In this post, I am going to use MMODE as an example to explain this idea.


MMODE announced its impressive EPS in its first quarter of 2011, its market price was only 0.165~0.17, if the EPS can be maintain, estimated PE was only around 2.2. In other words, there was huge potential profit (>100%) when PE is adjusted to 5 from 2.2. But its risk was also very big: Can MMODE maintaine its EPS in the future? Can the receiveable be received? After that, the price gone up to around 0.19~0.26 until second quarter.

Yes, another impressive EPS was report in second quarter. But unfortunately, Bear was coming, the MMODE price had been press to 0.22~0.31 for few weeks before it soared to 0.35~0.40. With average of 0.30, PE was adjusted to around 3.3. This is because more people have more confident about its future due to the fact of impressive EPS in last consecutive two quarters. Uncertainty was relatively less compared to the first quarter since the EPS of second quarter shown that the EPS of MMODE keep moving up.



10 November 2011

M-MODE BERHAD (MMODE, 0059) - Q3 2011 :Keep Moving and Growing

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M-MODE BERHAD (MMODE, 0059) Third Quarter Report comes out early yesterday night. What a surprise!! The new strategy implemented by the company look really work well. Firstly, let's see what is the comment from the company:

"The Group recorded an impressive increase in revenue as compared to the previous year's corresponding quarter from RM7,580,000 to RM17,610,000. whereas, the profits attributable to shareholders has increased by RM3,014,000 to RM3,913,000 as compared to previous year's corresponding quarter of RM899,000. The increase in revenue was mainly due to new strategic directions set by the Management in leveraging our strong execution capabilities and providing a wider premium portfolio of media assets to increase user' value and loyalty to our services."