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12-02-2014, 04:01 PM
(This post was last modified: 12-02-2014, 04:02 PM by specuvestor.)
It is not earnings... it is about ROE growth as the E shrinks
(12-02-2014, 02:06 AM)safetyfirst Wrote: F&N is currently priced like it can grow at 15-20% per year. Am i missing out something whenever i read aBout the earnings of F&N?
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(12-02-2014, 04:01 PM)specuvestor Wrote: It is not earnings... it is about ROE growth as the E shrinks
(12-02-2014, 02:06 AM)safetyfirst Wrote: F&N is currently priced like it can grow at 15-20% per year. Am i missing out something whenever i read aBout the earnings of F&N?
Sorry Specuvestor, are you implying that FNN would be loaded with debt - hence ROE will increase? Wouldn't that be risky when there's a credit crunch?
Also the P/E for FNN is pretty high based on the latest financials...
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The E in ROE is Equity. FNN ex Centrepoint is a cashcow... their risk profile is dramatically different from other high capex companies.
The E in P/E is earnings. P comes down does not necessarily mean worst off ie those who bought FNN at 9.40.
As per our many discussions in this thread, the key is actually to align our interest with the major shareholder. And it has been fun becuase unlike many tycoons, his LBO force him to be time constrainted and extremely motivated. I usually don't have patience with tycoons.
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(12-02-2014, 04:51 PM)specuvestor Wrote: The E in ROE is Equity. FNN ex Centrepoint is a cashcow... their risk profile is dramatically different from other high capex companies.
The E in P/E is earnings. P comes down does not necessarily mean worst off ie those who bought FNN at 9.40.
As per our many discussions in this thread, the key is actually to align our interest with the major shareholder. And it has been fun becuase unlike many tycoons, his LBO force him to be time constrainted and extremely motivated. I usually don't have patience with tycoons.
Yes I know that the E in ROE is equity - once you load a company with debt, the equity portion will decline.
The p/e of FNN has increased - in this case, the P did not decline, the E declined due to the spin off of FCL.
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12-02-2014, 06:11 PM
(This post was last modified: 12-02-2014, 06:12 PM by specuvestor.)
Loading a company with debt does not reduce Equity. What we are expecting is financial engineering in FNN, to REPLACE equity with debt.
With the spin off of FCL both P and E declined as of 30 Dec 2013. We are saying 2-1 >1
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i thought if you looks at a company's ROE and is very high, one has to be extra careful. We have to look at why so high. Can it be sustained? How come company can operate in this way?
For that matter, till today i am quite "blur" about Star Hub capital structure or business operation.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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Starhub is a great example of how all these ratios go out of whack at the extreme. Actually all these ratios are APPROXIMATES to FCF return to unlevered equity. That is the REAL bottom line ie how much cashflow u get for $1 of equity.
When FNN do capital reduction or "financial engineering", the unlevered equity reduces. FCF for the F&B doesn't change so much when "paper" changes. Valuation increases as the denominator reduces, within the bounds of credit risk
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FNN just filed an additional resolution for its upcoming EGM on 28th Feb...The resolution is the Adoption of Interested Persons Transaction Mandate...for those vested .. probably its a lull period between now and the EGM for any corporate actions..corporate actions should be in motion after 28th Feb...
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(13-02-2014, 08:55 AM)toiletsiao Wrote: FNN just filed an additional resolution for its upcoming EGM on 28th Feb...The resolution is the Adoption of Interested Persons Transaction Mandate...for those vested .. probably its a lull period between now and the EGM for any corporate actions..corporate actions should be in motion after 28th Feb...
You are quick to catch that. Yes, I do agree IPT might be part of the coming corp actions. May be transactions between F&N and ThaiBev...
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I checked with bank account, the dividend of $0.12 per share is credit. So far the dividends cum capital reduction were
Capital Reduction: $3.28
Dividends: 3.5 cents and 12 cents
Upcoming capital reduction pending shareholder approval is 42 cents.
Total (include the impending one) = $3.435 per share.
I reckon no further cash can be milked out, beside the dividend from business operation.
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