10 June 2012

5 Years 100% Capital Appreciation: Example: JT International Berhad (JTINTER, 2615)

So, do you want to own high dividend payout counter? How about JT International Berhad (JTINTER, 2615)? JTINTER is going to give special dividend of Special Cash Dividend of 24 sen per share less 25% tax and 38 sen per share, tax exempt under the single-tier system in respect of the financial year ending 31st December 2012. In other words, with market price of RM6.70 and gross dividend of 62sen will be given, its dividend yield is approximately 9.25%, it seems a good deal, don't you think?

However, if we review JTINTER last five year achieve, its EPS is gradually increasing from 31sen (2007) to 47sen (2011), dividend amount is 30sen in last three years (2009, 2010 and 2011). This explains why JTINTER is able to give special dividend ( from its retained earning in last three years: 2009, 2010 and 2011 after 30sen dividend paid). In other words, do you think the 62sen dividend will be given again in next fiscal year? Maybe, if and only if, its EPS will increase significantly.

Since JTINTER EPS increased from 31sen (2007) to 47sen (2011) (around 50%), its market price, surprisingly, increased from RM3.50+-  (2007)  to RM6.70+- (2012) (around 100%), it looks like investors are very optimistic about its future earnings.

Nevertheless, what we can learn from JT International Berhad is it will take around 5 years for a good company to be appreciated 100% from RM3.50+- (2007) to RM6.70+- (2012), or average of 20%, excluding its dividend profits. What a good deal in 2007 to buy JTINTER, don't you think?

So, next time, when people ask you what are you waiting for when you still hold your favourite under-valued counter? I think you know the answer.

That's all for today. More fascinating articles and sharing will be updated from time to time in Xaivier Blog. So, you are welcome to subscribe our feed, look at our sitemap or simply visit our Homepage.

Written by: Xaivier Chia


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