Chip Eng Seng

[catchup]

In my opinion, two possibilities come to my mind. You are either not patient enough, or the stock (presumably an asset play) that you bought wasn't of decent quality. On average, decent asset play stocks tend to approach their NAV in the long run. Money is made by acquiring these stocks at a significant discount from their RNAV.

A stock like CES would rank highly in the asset play assessment checklist. Proactive and shareholder-friendly management with regards to maximizing and unlocking value for shareholders, check. High dividend yield with a sustainable dividend so you can get paid while waiting, check. Proven track record in growing NAV, check. And finally, substantial discount to RNAV, check.

From my relatively short 5 years of investing experience, some serious money were made from this class of stocks. I am confident that more money lies in store in the next 5.

“The stock market is a highly efficient mechanism for the transfer of wealth from the impatient to the patient.” -Warren Buffett



Just to add another quote, I believe from Benjamin Graham :

"..... in the short term, the stock market is a voting machine but in the
long term, it is a weighing machine."

I know there are many loyal supporters for CES. However, after reading CCUV's point of view and my own personal experience, I am inclined to accept CCUV's view as the rational view. I was delusional about a stock that would eventually trade to its NAV and I thought, that was a gem. In the end, it was a horrible wait. I immediately exited into my position and plowed it back into a company that is generating consistent profits. I made considerable gains subsequently.

Again, I am not here to "shoot" any stocks down.

[westin1]

Thats why we need a balance of optimism and pessimism on ces... there's no right or wrong... its share price tells it all... we have to see mr market face... where it will eventually go... if jeff ta is so good.... he should be a millionaire by now... what bullish doji etc.....

[Zip113]

Thats why we need a balance of optimism and pessimism on ces... there's no right or wrong... its share price tells it all... we have to see mr market face... where it will eventually go... if jeff ta is so good.... he should be a millionaire by now... what bullish doji etc.....

true but i think he should be a millionaire already too. he own his own private property

[westin1]

Maybe he bought a ces condo lol.....look at ces price now...it really look pathetic for an undervalued gem...was expecting it to soar above $1 months ago...but it never happen...looks like the $0.80s are here to stay for quite awhile...

[jjlim84]

a mixture of optimism and pessimism is definitely beneficial to everyone, especially all statements should be based on comprehensive facts, and conveyed in a neutral tone

[specuvestor]

Thats why we need a balance of optimism and pessimism on ces... there's no right or wrong... its share price tells it all... we have to see mr market face... where it will eventually go... if jeff ta is so good.... he should be a millionaire by now... what bullish doji etc.....

Maybe he bought a ces condo lol.....look at ces price now...it really look pathetic for an undervalued gem...was expecting it to soar above $1 months ago...but it never happen...looks like the $0.80s are here to stay for quite awhile...

If Mr Market is so brilliant to "tell it all" then don't bother to do FA already. In fact you should be doing TA cause the basis of TA is much more perfect market driven than FA. To be fair neither are we going to see your 45/10cts any time soon

But I agree that what makes this forum great is differing opinions and the lattitude the moderators give, even to those with dubious intent or track record. Differing opinion makes our investment thesis more robust and rounded.

RNAVs are not directly comparable between companies as there's varying levels to risk of achievement. A project with RNAV of 30c that is in the planning phase should have a much greater discount than one that is six months away from TOP.

In Chip Eng Seng`s case, the actual NAV today is probably around $1.30 (reported NAV adjusted for dividend and adjusted for hotel revaluation). The hotel revaluation will not happen for accounting purposes until end of year, but its silly to call it RNAV and apply a 50% discount as I can book a room there now - for economic purposes its realised NAV.

Now, a counter can always trade at a discount to NAV and to make money you're relying on either a) others buying to boost stock price or b) nav value to be proven economically correct through dividends, asset sales or takeovers.

In CES`s case the buyback will do a). If actual NAV is truly 1.30 and the share price is 85c, the company has an amazing opportunity to buy large amounts and realise a 50% return immediately. That's much better than anything you can get in the property market and I expect them to do a lot of it.

Thought I'll add on to what roxhockey has commented. What a lot of forumers are focusing on is the Asset part while neglecting the Business and the Structure part. The business model of developers is very different from say a production company and say a palm oil company. A production company produces goods and services from the assets, and the assets depreciates. A palm oil company produces harvest from their biological assets but their are renewable in a sense vs say an oil company.

So what is the business model of developers? Oil company and developers have these things in common: they are actually selling assets while production companies don't. But the former has pricing that is determined by global demand and unknown asset value, the latter pricing is much more localised and discrete sellable assets ie you can point out how much inventory they have with high precision.

In order to sell assets, developers need to have high working capital. Which is why if they need to have growth, they need to recycle their cash and churn out more assets to sell if assume ASP constant. Some developers branch into more constant cashflow business with investment properties like offices and retail, but it still locks up capital. That is fundamentally why REIT is a very good idea for them.

On the Structure side, even a fully cash holding company trades at around 15% discount to cash. What that means is the RNAV of a developer with the risk associated like what Roxhockey mentioned, should never trade near to RNAV. In fact seasoned investors will know that when developers trade near to RNAV, it is either the beginning of a bull market ie analysts are slow to revise ASP up, or the market is bubbly. Experience and skill are required to know which is which

[jjlim84]

if you look back at history, for example years 2000-2005 where market wasn't good, it was still trading near its NAV. When the bull came after 2005, P/NAV shoots up.

just for reference

[specuvestor]

RNAV is not NAV which is roughly equal to Book Value

[edragon]

Wow, great debate in investment philosophy and great quotes too which essentially is buy low and sell high.
Just for example buy at 80cts and sell at 90cts, but many will label it as trading which essentially is investment; which is which?
As long as you make money, who cares?

[CCUV]

Vb is the best place,I love it