Popular Holdings

My friend says this 书局 can not buy, sure 输局 one.

(17-05-2012, 08:07 PM)Ben Wrote: My friend says this 书局 can not buy, sure 输局 one.

Thx!

For future reference, I capture what you'd posted as a quote... Muhahaha...

Market Close : $0.185 (unchanged) ; Volume = 335,000 ; Range : $0.185 (Flat)


Dated 17-May-2012

IMO, quantitatively Popular Holdings has a strong balance sheet (high cash, low debt), little capex and positive fcf every year (except for 2007 and 2008). yet it is trading extremely near its net current asset value and below its book value, with a low price-earnings ratio and a low price/free cash flow ratio.

its main downsides are its low profit margins (historically 3-6%), average ROA (4-7%) and average ROE (8-12%).

(18-05-2012, 10:27 PM)mysterion Wrote: IMO, quantitatively Popular Holdings has a strong balance sheet (high cash, low debt), little capex and positive fcf every year (except for 2007 and 2008). yet it is trading extremely near its net current asset value and below its book value, with a low price-earnings ratio and a low price/free cash flow ratio.

its main downsides are its low profit margins (historically 3-6%), average ROA (4-7%) and average ROE (8-12%).

Wah... I'm ashamed to say that I have not computed / looked at so many financial ratios. But, the one I highlighted in bold above don't look too right and I went to check. I suspect you're using FY11 financials. It's quite a bit different using the latest Q312 (Jan-12) financials. I don't really know how important this ratio is, though.

I got curious when someone here posted a somewhat funny meaning of the word 书 (book) as 输 (loss) to describe Popular Holdings' Book Store biz. I decided to search for other Chinese Characters having the same shu1 pronounciation. From a list (key in shu1 in the PinYin box) I found, I suddenly saw a Da Vinci Code-like story on investing,

书 - Popular Holdings core biz is in BOOKS

When Investing in Stocks,

疏 - If you NEGLECT to do your homework
输 - Chances of making a LOSS is very high

In my case, what I saw was,

殊 - Their niche is UNIQUE
姝 - I imagined I saw a BEAUTY
舒 - If I'm right, SHIOK!

---

Latest one-man "share buy-back" program activity on 18-May-12 (Fri) for 1,796,000 Shares @ $0.185. New support level? I don't count the $0.188 married deal one.

Old man bought another million shares today!

(20-05-2012, 10:46 PM)KopiKat Wrote:

(18-05-2012, 10:27 PM)mysterion Wrote: IMO, quantitatively Popular Holdings has a strong balance sheet (high cash, low debt), little capex and positive fcf every year (except for 2007 and 2008). yet it is trading extremely near its net current asset value and below its book value, with a low price-earnings ratio and a low price/free cash flow ratio.

its main downsides are its low profit margins (historically 3-6%), average ROA (4-7%) and average ROE (8-12%).

Wah... I'm ashamed to say that I have not computed / looked at so many financial ratios. But, the one I highlighted in bold above don't look too right and I went to check. I suspect you're using FY11 financials. It's quite a bit different using the latest Q312 (Jan-12) financials. I don't really know how important this ratio is, though.

Based on the Third Quarter Financial Statement for the Period ended 31 Jan 2012:

Current Assets (S$'000): 343,250
Current Liabilities (S$'000): 153,481
Non-current Liabilities (S$'000): 29,896

Net current asset value (S$'000)= Current Assets - Total Liabilities = 159,873

Market Capitalisation (S$'000) = 162,330 (quoted from Yahoo Finance 21/05/12)

Unless my above calculations are incorrect, I believe the stock is still trading approximately at net current asset value. There was not much changes in the balance sheet in Third Quarter Financial Statement as compared to the 2011 Annual Report (there shouldn't be anyways).

If I'm not wrong, NCAV is a form of liquidation valuation. Even if the company is to be liquidated, the current assets minus all debts should be able to return almost the entire purchase price to the common stock shareholders. Of course, with NCAV close to the Market Cap, there isn't much margin of safety to speak of ...

Disclaimer: I am extremely new to all these valuations and numbers so if I have made any mistake or false assumptions, please do point out. I hope I can learn from the more experienced investors here in this forum

(21-05-2012, 09:23 PM)mysterion Wrote:

(20-05-2012, 10:46 PM)KopiKat Wrote:

(18-05-2012, 10:27 PM)mysterion Wrote: IMO, quantitatively Popular Holdings has a strong balance sheet (high cash, low debt), little capex and positive fcf every year (except for 2007 and 2008). yet it is trading extremely near its net current asset value and below its book value, with a low price-earnings ratio and a low price/free cash flow ratio.

its main downsides are its low profit margins (historically 3-6%), average ROA (4-7%) and average ROE (8-12%).

Wah... I'm ashamed to say that I have not computed / looked at so many financial ratios. But, the one I highlighted in bold above don't look too right and I went to check. I suspect you're using FY11 financials. It's quite a bit different using the latest Q312 (Jan-12) financials. I don't really know how important this ratio is, though.

Based on the Third Quarter Financial Statement for the Period ended 31 Jan 2012:

Current Assets (S$'000): 343,250
Current Liabilities (S$'000): 153,481
Non-current Liabilities (S$'000): 29,896

Net current asset value (S$'000)= Current Assets - Total Liabilities = 159,873

Market Capitalisation (S$'000) = 162,330 (quoted from Yahoo Finance 21/05/12)

Unless my above calculations are incorrect, I believe the stock is still trading approximately at net current asset value. There was not much changes in the balance sheet in Third Quarter Financial Statement as compared to the 2011 Annual Report (there shouldn't be anyways).

If I'm not wrong, NCAV is a form of liquidation valuation. Even if the company is to be liquidated, the current assets minus all debts should be able to return almost the entire purchase price to the common stock shareholders. Of course, with NCAV close to the Market Cap, there isn't much margin of safety to speak of ...

Disclaimer: I am extremely new to all these valuations and numbers so if I have made any mistake or false assumptions, please do point out. I hope I can learn from the more experienced investors here in this forum

Sorry! My mistake, I thought you were talking about Net Current Asset as in (CA - CL). I didn't even know there's something called NCAV.

From investopedia,

Definition of 'Net Current Asset Value Per Share - NCAVPS'

A value created by professor Benjamin Graham in the mid-twentieth century to determine if a company was trading at a fair market price. NCAVPS is calculated by taking a company's current assets and subtracting the total liabilities, and then dividing the result by the total number of shares outstanding.


NCAVPS = (Current Assets- Total Liabilities) / # Shares Outstanding


According to Graham, investors will benefit greatly if they invest in companies where the stock prices are no more than 67% of their NCAV per share. A study done by the State University of New York to prove the effectiveness of this strategy showed that from the period of 1970 to 1983 an investor could have earned an average return of 29.4%, by purchasing stocks that fulfilled Graham's requirement and holding them for one year.

However, Graham did make it clear that not all stocks chosen in this manner will have excessive returns, and that investors should also diversify their holdings when using this strategy.

(21-05-2012, 09:23 PM)mysterion Wrote: Based on the Third Quarter Financial Statement for the Period ended 31 Jan 2012:

Current Assets (S$'000): 343,250
Current Liabilities (S$'000): 153,481
Non-current Liabilities (S$'000): 29,896

Net current asset value (S$'000)= Current Assets - Total Liabilities = 159,873

Market Capitalisation (S$'000) = 162,330 (quoted from Yahoo Finance 21/05/12)

Unless my above calculations are incorrect, I believe the stock is still trading approximately at net current asset value. There was not much changes in the balance sheet in Third Quarter Financial Statement as compared to the 2011 Annual Report (there shouldn't be anyways).

If I'm not wrong, NCAV is a form of liquidation valuation. Even if the company is to be liquidated, the current assets minus all debts should be able to return almost the entire purchase price to the common stock shareholders. Of course, with NCAV close to the Market Cap, there isn't much margin of safety to speak of ...

Disclaimer: I am extremely new to all these valuations and numbers so if I have made any mistake or false assumptions, please do point out. I hope I can learn from the more experienced investors here in this forum

IMO, the primary valuation should base on earning. Value by NAV is secondary supporting information. It is remain true for Slow/Fast growth stock, Turnover stock and Cyclical. The only exception is Asset play stock which the reason to invest is its valuable asset. So it is logical to focus on asset.

My 2 cts

(21-05-2012, 08:11 PM)propertyinvestor Wrote: Old man bought another million shares today!

It could well be more than a million shares, considering the total volume transacted today (21May12) was 2.573m shares, and Popular actually closed at the day's high of $0.193, up $0.008.

Chaiman Chou through his holding company World Holdings (Pte) Ltd has been adding more Popular shares since 30Mar12, on that very day alone he bought 3.173m shares at an average price of $0.17741.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [30Mar12 purchase]

After 2 smaller purchases on 5Apr12 and 11May12 totalling 0.506m shares, Chou renewed his aggressive purchase on 16May12 by adding 4.935m shares at an average price of $0.188.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [16May12 purchase]
and continued with another big purchase of 1.796m shares at an average price of $0.185 on 18May12.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [18May12 purchase]

Obviously Chou should know the true value of Popular's business!