Popular Holdings

(02-03-2013, 10:20 AM)a74henry Wrote: I have bought Popular shares since year 2007 at $0.30 and has continued adding to my portfolio at prices as low as $0.10. These share buybacks looked after long term shareholders which is good for value investors.

MV $0.265. NAV $0.252. PE about 13x.

The business model is viable and profitable. Waiting for the price to correct before buying.

Markets rise and fall. It is more inportant to own a fundamentally sound company that will pay a decent dividend annually. I want to be patient to accumulate this at lower price.

(Vested)

(11-03-2013, 10:40 AM)kazukirai Wrote:

(10-03-2013, 01:07 PM)a74henry Wrote: What is the intrinsic value for Popular and how do you calculate it?

Interestingly, Ven Sreenivasan has attempted to answer your question in today's edition of BT:

How Popular stays popular

excerpted:

The company recorded a profit of $36 million from its book sales, publishing and distribution business. Assuming a 7X price-earnings multiple, this would impute a value of $252 million to the company. Adding this to its net cash of $118 million and property holdings of $145 million yields a grand total of $515 million, or 63 cents per share.

[end]

Some points from this short excerpt,

1. Profit = $36Mil : This is the FY12 (Apr) figure. Since then, 1H13 (Oct) figures has seen quite a big drop due to higher expenses

2. Net Cash = $118M : This appears to be the 1H13 Total Cash. If Net Cash (less Debts), it's $85M

3. Property = $145M : Not sure how this figure is computed. From 1H13, I got $75M (Devt Property) + $12M (Properties Held for Sale) = $88M

4. 63ct / Share : $515M / 841M shares = 61ct. Possible to get 63ct by deducting 20.7M shares due to the Shares Buy Back to date. But then again, that'd have meant Cash would have also declined and need to be subtracted from $515M.

Another interesting observation is the Share Price hitting a high of 32.5ct during pre-open and staying for a few minutes. Subsequently, high volume sell-down, closing at 28ct, -3.5ct ; Total Vol = 11,490,000. It should also be noted that the share price was still hovering aro' 26.5ct just ~1wk back before it start to rocket up with high vol.

Just wondering if the whole thing is so coincidental....Let's see what happens tomorrow...

(11-03-2013, 11:31 PM)KopiKat Wrote:

(11-03-2013, 10:40 AM)kazukirai Wrote:

(10-03-2013, 01:07 PM)a74henry Wrote: What is the intrinsic value for Popular and how do you calculate it?

Interestingly, Ven Sreenivasan has attempted to answer your question in today's edition of BT:

How Popular stays popular

excerpted:

The company recorded a profit of $36 million from its book sales, publishing and distribution business. Assuming a 7X price-earnings multiple, this would impute a value of $252 million to the company. Adding this to its net cash of $118 million and property holdings of $145 million yields a grand total of $515 million, or 63 cents per share.

[end]

Some points from this short excerpt,

1. Profit = $36Mil : This is the FY12 (Apr) figure. Since then, 1H13 (Oct) figures has seen quite a big drop due to higher expenses

2. Net Cash = $118M : This appears to be the 1H13 Total Cash. If Net Cash (less Debts), it's $85M

3. Property = $145M : Not sure how this figure is computed. From 1H13, I got $75M (Devt Property) + $12M (Properties Held for Sale) = $88M

4. 63ct / Share : $515M / 841M shares = 61ct. Possible to get 63ct by deducting 20.7M shares due to the Shares Buy Back to date. But then again, that'd have meant Cash would have also declined and need to be subtracted from $515M.

Another interesting observation is the Share Price hitting a high of 32.5ct during pre-open and staying for a few minutes. Subsequently, high volume sell-down, closing at 28ct, -3.5ct ; Total Vol = 11,490,000. It should also be noted that the share price was still hovering aro' 26.5ct just ~1wk back before it start to rocket up with high vol.

Just wondering if the whole thing is so coincidental....Let's see what happens tomorrow...

Syndicate at play again? SGX should investigate.

What they say is true, "the sure way to loss money in stock is to read finance news while you are trading stock."

(12-03-2013, 07:48 AM)zhangwuji Wrote: Syndicate at play again? SGX should investigate.

What they say is true, "the sure way to loss money in stock is to read finance news while you are trading stock."

A couple of things that'd worked for me,

1. Verify all facts from SGX Annc. Listed cos. have to report anything that's material in SGX Annc, so, that's the best place to check.

2. Analysts / Journalist reports are based on their own analysis. Like what Warren Buffett said, those reports tells us more about the author...

3. By the time we read any report, it'd have gone thro' days or even weeks of preparations and likely, seen by numerous people, who may have propagated any info of any 'good tips' to a lot of their acquaintances. It's not uncommon to see sudden volume and price increase/drop in a stock a few days before something major gets announced/reported.

Best is to learn to make our own independent judgement, based on accurate facts and figures which we can easily obtain from SGX Annc.

(12-03-2013, 08:36 AM)KopiKat Wrote:

(12-03-2013, 07:48 AM)zhangwuji Wrote: Syndicate at play again? SGX should investigate.

What they say is true, "the sure way to loss money in stock is to read finance news while you are trading stock."

A couple of things that'd worked for me,

1. Verify all facts from SGX Annc. Listed cos. have to report anything that's material in SGX Annc, so, that's the best place to check.

2. Analysts / Journalist reports are based on their own analysis. Like what Warren Buffett said, those reports tells us more about the author...

3. By the time we read any report, it'd have gone thro' days or even weeks of preparations and likely, seen by numerous people, who may have propagated any info of any 'good tips' to a lot of their acquaintances. It's not uncommon to see sudden volume and price increase/drop in a stock a few days before something major gets announced/reported.

Best is to learn to make our own independent judgement, based on accurate facts and figures which we can easily obtain from SGX Annc.

Thank you for sharing your analysis. Can't agree with you more.

Just can't help wonder how people got paid to come out with those dubious analysis or are they paid to specifically to produce such analysis report in the first place. This is not the first time. You know what I mean.

My 2 cents on valuation,

prop for sale -12.4 mil
dev prop - 78.9 mil
net cash - 85.1 mil
DCF of book publishing and distribution - (assume base earning 25 mil - 8x earning) = 200 mil

total value = 376.4 mil
today's mkt cap = 229 mil

good luck!

Q3 Results are out. Although Revenue & Profit continues to drop, the drop in EPS wasn't as bad as I was expecting.

EPS = 1.4ct vs 1.44ct last year (I was expecting 1-1.2ct if both Admin and Distribution & Selling Expenses continues to be higher)
NAV = 26.66ct

Altho' Admin Expenses continues to be ~10% higher (seems like it's going to be a permanent thing), what amazed me is the -22% drop in Distribution & Selling Expenses for Q3 (even managed to turn 9mths total to -4%). Perhaps it's related to when they hold their BookFest?

As expected, there were no Property sold for Q3. Devt Property = $79M vs $75.4M (Q2).

Looks good to me but not sure how market will react as it'd previously run up from aro' 26.5ct, hitting a high of 32.5ct before settling down to current 28ct level.

(15-03-2013, 08:54 PM)ikur1 Wrote: My 2 cents on valuation,

prop for sale -12.4 mil
dev prop - 78.9 mil
net cash - 85.1 mil
DCF of book publishing and distribution - (assume base earning 25 mil - 8x earning) = 200 mil

total value = 376.4 mil
today's mkt cap = 229 mil

good luck!

That is 60% below valuation. The FV should be $0.45.

"...My 2 cents on valuation,...The FV should be $0.45..."

you are spot-on, your valuation was worth 2 cents.

keep an eye out for massive fortnightly buybacks leading up to quarterly results, in this case it was over 3 months!

even if company want us to think its undervalued then sell fast on the up.

most of the time its to keep market value up to look decent before bad news, also to keep minority holders at bay.

Property development is by defn specialised, this is a road-side bookstall, without the management team & company culture needed for property deals.

One thing to bear in mind, when looking at small caps with real estate developments, is that large cap property developers are also trading at a discount to the "value" of their assets (I think the last report that I saw showed a discount of 20-30%) but clearly have better liquidity. My point being that the market will, probably, need to erase the discount on the large caps first, before it will start to give credit to small caps.