PT Mustika Ratu – Q3 2009
Posted on Sunday, November 8, 2009
Filed under
Keep the Value,
Mustika Ratu,
Value Stalking
| 3 Comments
This is another “KEEP THE VALUE” company.
Honestly I was tempted to put her as “STALK THE WINNER”.
But not for now, she still needs to prove herself.
Who is PT Mustika Ratu?
an Indonesian company that is engaged in the production, distribution and marketing of herbal-based and natural cosmetics, herbal drinks products:
Mustika Ratu Tox Tea, Slimming Gel, Daun Sirih Toothpaste, Moor’s, etc
The Company also produces body care products for men, opens and franchises spa centers, and creates home spa products.
KEEP THE VALUES (see the above tabulation image for reference)
From the tabulation, you may notice that the NAV is around Rp 716/share
What is NAV?
NAV is the value of the company.
or in other word, if the company is to close down today, it can sell itself for Rp 716 per share (this is based on the rough calculation).
The stock price @ 8 Nov 2009 is Rp 440 per share.
What does this mean?
It basically tells you that Mr Market (trader) values the company at Rp 440 per share. So, the market value is only 61% of company’s real value.
In other words, you are buying the company with discount of 49%.
And this is not including the brands that company owns.
What could go wrong?
The debt level is low. This is a good thing actually, but it also shows that the company is extremely conservative. They are playing safe with no big expansion plan in future. At least in my opinion. This is the reason why, I decided NOT to put this company under “STALK THE WINNER” category.
What could be the catalyst?
Profit margin improvement will be the key factor for the company to grow.
The company should review and streamline the business.
This means that, the management should focus and expanding business or products with good prospect and profit margin. At the same time streamlining bad businesses and products.
If that is so, one day, market will value this company to its real value.
PT Semen Gresik – Q2 2009
Posted on Thursday, October 15, 2009
Filed under
Semen Gresik,
Stalk the Winner,
Value Stalking
| 4 Comments
Let's stalk the winner by stalking PT. Semen Gresik tbk
Who is Semen Gresik?
an Indonesian Cement company, specialized in:
Ordinary Portland cement type I, II, III and V;
Portland Pozzalana cement, gypsum and pozzolanic materials; Portland composite cement; Super Mansory cement; oil well cement class G high sulfate resistant, and special blended cement.
Or to cut it short, this is all-about-cement company.
Price @ 14 Oct 09 = Rp 6800
STALK THE WINNER (see the above tabulation image for reference)
From the tabulation, you may notice of the following:
5 Years Growth Rate (2004 – 2008)
Net Margin is improving from 8% to 20%.
The indicator tells us that:
* company is gaining more moat advantageous over the years as it positions itself as the market leader.
* company is managed well and more efficiently.
Cash Flow is always positive and growing for 5 years
Although the company is expanding aggressively, the cash flow is managed extremely well.
This is achieved amid pressure to pay dividend regularly as normally required from state-owned company.
ROE growing from nice 14% to great 31%.
ROE is a good indicator of the return from our invested money.
To put bluntly, it is basically telling us that you get 30% return of your money invested in the companies.
Debt level
Until Q2 2009, total debt is Rp 230,578 compared to total cash of Rp 4,750,930. The debt level is just <5% of cash on hand.
Note: the healthy debt level is normally set as 30% What could go wrong?
Now, everything is perfectly pointing to a Winner company.
So you ask me, what are you worrying about?
Let’s be paranoid, let’s ask ourselves, what is the consequences of being wrong?
Let give ourselves some margin of safety. Should we?
I would consider the company is valuable if the PE is less than 15.
Let’s see where is it now?
Price as @ 14 Oct 2009 is Rp 6800, with this price, PE is about 13.
What could be the catalyst?
Improvement in revenue will be the catalyst for the company.
Since it has achieved the awesome level of Profit Margin and efficiency.
It is now all up to the revenue.
If the revenue picks up strongly then just relax and watch the growth story.
If that is so, all you need to do is relax, get a pack of heci (a nice food from my hometown) and watch the great show ahead.
”If the job has been correctly done when a common stock is purchased, the time to sell it is … almost never”
~ Philips Fisher
PT Berlina tbk - Q2 2009
Posted on Friday, October 9, 2009
Filed under
Berlina,
Keep the Value,
Value Stalking
| 1 Comment
Let's start this value stalking journey by stalking PT. Berlina tbk
Who is PT Berlina Tbk?
an Indonesian plastic manufacturer, specialized in:
BOTTLES, TOOTHBRUSH, CLOSURES / CAP, INJECTION PARTS
for some well known brands for instance:
Dettol, Dove, Citra, Betadine, Pepsodent etc
Price @ 9 Oct 09 = Rp 660 KEEP THE VALUES (see the above tabulation image for reference)
From the tabulation, you may notice that the NAV is around Rp 1330/share
What is NAV?
NAV is the value of the company.
or in other word, if the company is to close down today, it can sell itself for Rp 1330 per share (this is based on the rough calculation).
Now, you also see that the stock price @ 9 Oct 2009 is Rp 660 per share.
What does this mean?
It basically tells you that Mr Market (trader) values the company at Rp 660 per share. So, the market value is only half of company value.
I reckon this as Margin of Safety.
If you have read “playing with risk”, you will notice that we are trying to reduce the risk, to get control of the game.
How can it be done?
Now, if you think of it, you are betting Rp 660 to strike Rp 1330.
What could go wrong?
The debt level is high, 77% way higher than the healthy <30%.
But having said that, the debt are mostly long term debt.
There is no issue for short term debt, as the cash held is more than enough to pay it off.
What could be the catalyst?
Profit margin improvement will be the key factor for the company to grow.
The company must focus on work efficiency and cost cutting to improve the profit margin.
If that is so, one day, market will value this company to its real value.