Dear all,
My outlet in Sunway Pyramid will be opening soon. Outlet Supervisor needed urgently.
We are in the F&B line which selling variety of traditional pastries. We are now expanding our franchise business in Klang Valley area.Our new outlet in Sunway Pyramid will be opening soon. We would like to search for potential candidates to join our team.
Outlet Supervisor
Responsibilities:
1. Incharge of the day to day operation for the outlet
2. Assist with training and mentoring to ensure that staff staff understand all policies
3. Assist the cash handling, tracking of product usage, wastage & overall inventories.
4. Ensure food & beverage quality, cleanliness of the outlet
Requirements:
1. Certificate of Food & Beverage preparation/ Hospitality Management or equivalent
2. Those who without the required qualification, but have at least 1-2 years experience in the F&B industry are encouraged to apply
3. For those who without experience encourage to apply too
4. Self motivated with strong interpersonal and communication skill
5. Fresh Graduate from Food & Beverage preparation/ Hospitality Management or equivalent are encouraged to apply
6. Applicant must be Malaysian citizen
Company Benefits:
1. Basic Salary (RM1500) + Commission
2. Socso
3. EPF
Starting Date: 9/7/2008
Interested please contact 012-3325233 (Jeff Chong) or send your resume to jeff.chenwai@gmail.com
Wednesday, June 25, 2008
Tuesday, June 24, 2008
Pharmaniaga Berhad (7081)
Pharmaniaga Berhad provides integrated healthcare solutions primarily in Malaysia. The company engages in manufacturing generic pharmaceuticals, and providing logistics and distribution, sales and marketing, medical products and services, hospital equipping and planning, turnkey contract management, and information technology solutions. It also engages in the research and development, and trade of generic pharmaceutical products; warehousing and distribution of pharmaceutical and medical products; and hospital equipment trading, as well as providing clinical laboratory testing and other laboratory related services. In addition, Pharmaniaga engages in the sale and distribution of portable medical devices, and distribution and trading of pharmaceuticals product, food supplements, and diagnostics product. The company was founded in 1994 and is based in Shah Alam, Malaysia.
Financial Analysis:
Years EPS
1999 0.306
2000 0.496
2001 0.308
2002 0.373
2003 0.407
2004 0.502
2005 0.260
2006 0.117
2007 0.468
Years Dividend
1999 0.05
2000 -
2001 0.075
2002 0.085
2003 0.12
2004 0.15
2005 0.115
2006 0.15
2007 0.18
Average Dividend Payout on EPS = 37.06%
Years Revenue (000')
1999 356382
2000 427591
2001 543496
2002 585237
2003 632604
2004 799991
2005 936431
2006 1057868
2007 1183983
8 Years Average Revenue Growth Rate = 16.41%
5 Years Average Revenue Growth Rate = 15.3%
1 Year Revenue Growth Rate = 11.92%
Comment: Strong Growth
Years Equity
1999 115478
2000 140176
2001 168480
2002 200821
2003 241683
2004 284844
2005 314557
2006 316240
2007 349671
8 Years Average Equity Growth Rate = 15.07%
5 Years Average Equity Growth Rate = 11.95%
1 Years Equity Growht Rate = 10.57%
Comment: Slowdown, but still above market average
Years ROE(%)
1999 3.85
2000 17.7
2001 18.28
2002 18.59
2003 16.86
2004 17.85
2005 10.23
2006 4.45
2007 14.79
9 Years Average ROE = 13.62%
5 Years Average ROE = 12.84%
1 Years ROE = 14.79%
Comment: Strong compare to other companies in the same industry
Intrinsic Value:
1. Current EPS = 0.468
2. Estimated EPS Growth Rate in the future 10 years = 13.62% (take the 10 years Average ROE growth rate)
3. Estimated PE = 12.45 (8 years average)
4. Minimum acceptance of return = 15% (My minimum acceptance level)
EPS become 1.68 after 10 years
Intrinsic Value : RM1.68 x 12.45 = RM35.09 /4 = RM8.77
Let's take a margin of safety of 50% : RM8.77 /2 = RM4.39 > RM3.48 (24/6/08)
Conclusion: Strongly Undervalue if u looking for a yearly 15% return portfolio.
Let's take another culculation for safety reason.
Net Asset per share = RM2.98 (31/12/2007)
ROA = 0.468/2.98 = 15.7%
15.7% x (100% - 37.06%) = 9.88%
Years NTA expected
2008 2.16
2009 2.34
2010 2.53
2011 2.74
2012 2.97
2013 3.22
2014 3.49
2015 3.78
2016 4.1
2017 4.44
Let say the 10 years ROE in future is 13.62% (less than the average historical data)
Average PE = 12.45
Intrinsic Value = RM4.44 x 0.15 x 15 = RM12.96
Let's take a MOS of 50% = RM12.96 / 2 = RM6.48 > RM3.48 (24/6/08)
Comment: Strongly Undervalued
Why i choose Pharmaniaga rather than other company in the market?
1. A potential industry, market worth 1 billion USD in Malaysia market. The improvement standard of living makes consumers pay greater attention for their help. (Changing of living trend)
2. The company achieve an strong growth away from it's traditional income source, Gvernment Concession
3. Experience management team, impresssive cost & inventory control strategy, help company safe millions of ringgit. (by the implementation of Lean Six Sigma strategy)
4. Highly focus on the manpower trainings & courses, improve the employees productivity & capabality.
5. As a basic nessecity, pharmaceutical industry is recession-proof where by demand will not be significant effected by the economy downturn. (can refer to the historical data)
6. Pay attention on shareholder value & equity.
7. Aggressive business expansion to oversea market, especially the Indonesia which less Healthcare manufacturer & supplier. Pharmaniaga also expanding thier business into Middle East & Vietnam market. With the high GDP of USD7730 per capita, (which is very high compare to other middle east conutries) it will be a great market to enter. For the booming of Vietnam pharmaceutical market, it will be another great expansion for the company.
8. Constantly new product launching to target different market, example Citrex products D-EPA & EPOFemme Improving market share.
9. With a high NTA, RM2.98 (around 85.6% of it's current price, a big discount)
Investment Risk:
1. The changing of politic environment may affect the group earnings. 60% sales from government concession. The current concession of 15 years will expired November 2009. (The comapny havd submitted documents for renewal before expired. Result will be announced November 2008)
2. The expansion risk to a new market including the government policies.
Conclusions:
You know what, when the first time i read all the historical annual reports, i found that this company's annual report is different. (give me a wow!) I found that, they are really put their effort on the annual report, and it is very informative. They show their strategies very clear, the risk management, inventory management strategy, risk management portfolio............................. It have give me a clear mind of what the company's business structure & how the business operate.
For me, pharmaceutical is a reccession proof industry. In the current unstable economy, put your money in a company which can protect our capital is very important.
Good Investing!
Financial Analysis:
Years EPS
1999 0.306
2000 0.496
2001 0.308
2002 0.373
2003 0.407
2004 0.502
2005 0.260
2006 0.117
2007 0.468
Years Dividend
1999 0.05
2000 -
2001 0.075
2002 0.085
2003 0.12
2004 0.15
2005 0.115
2006 0.15
2007 0.18
Average Dividend Payout on EPS = 37.06%
Years Revenue (000')
1999 356382
2000 427591
2001 543496
2002 585237
2003 632604
2004 799991
2005 936431
2006 1057868
2007 1183983
8 Years Average Revenue Growth Rate = 16.41%
5 Years Average Revenue Growth Rate = 15.3%
1 Year Revenue Growth Rate = 11.92%
Comment: Strong Growth
Years Equity
1999 115478
2000 140176
2001 168480
2002 200821
2003 241683
2004 284844
2005 314557
2006 316240
2007 349671
8 Years Average Equity Growth Rate = 15.07%
5 Years Average Equity Growth Rate = 11.95%
1 Years Equity Growht Rate = 10.57%
Comment: Slowdown, but still above market average
Years ROE(%)
1999 3.85
2000 17.7
2001 18.28
2002 18.59
2003 16.86
2004 17.85
2005 10.23
2006 4.45
2007 14.79
9 Years Average ROE = 13.62%
5 Years Average ROE = 12.84%
1 Years ROE = 14.79%
Comment: Strong compare to other companies in the same industry
Intrinsic Value:
1. Current EPS = 0.468
2. Estimated EPS Growth Rate in the future 10 years = 13.62% (take the 10 years Average ROE growth rate)
3. Estimated PE = 12.45 (8 years average)
4. Minimum acceptance of return = 15% (My minimum acceptance level)
EPS become 1.68 after 10 years
Intrinsic Value : RM1.68 x 12.45 = RM35.09 /4 = RM8.77
Let's take a margin of safety of 50% : RM8.77 /2 = RM4.39 > RM3.48 (24/6/08)
Conclusion: Strongly Undervalue if u looking for a yearly 15% return portfolio.
Let's take another culculation for safety reason.
Net Asset per share = RM2.98 (31/12/2007)
ROA = 0.468/2.98 = 15.7%
15.7% x (100% - 37.06%) = 9.88%
Years NTA expected
2008 2.16
2009 2.34
2010 2.53
2011 2.74
2012 2.97
2013 3.22
2014 3.49
2015 3.78
2016 4.1
2017 4.44
Let say the 10 years ROE in future is 13.62% (less than the average historical data)
Average PE = 12.45
Intrinsic Value = RM4.44 x 0.15 x 15 = RM12.96
Let's take a MOS of 50% = RM12.96 / 2 = RM6.48 > RM3.48 (24/6/08)
Comment: Strongly Undervalued
Why i choose Pharmaniaga rather than other company in the market?
1. A potential industry, market worth 1 billion USD in Malaysia market. The improvement standard of living makes consumers pay greater attention for their help. (Changing of living trend)
2. The company achieve an strong growth away from it's traditional income source, Gvernment Concession
3. Experience management team, impresssive cost & inventory control strategy, help company safe millions of ringgit. (by the implementation of Lean Six Sigma strategy)
4. Highly focus on the manpower trainings & courses, improve the employees productivity & capabality.
5. As a basic nessecity, pharmaceutical industry is recession-proof where by demand will not be significant effected by the economy downturn. (can refer to the historical data)
6. Pay attention on shareholder value & equity.
7. Aggressive business expansion to oversea market, especially the Indonesia which less Healthcare manufacturer & supplier. Pharmaniaga also expanding thier business into Middle East & Vietnam market. With the high GDP of USD7730 per capita, (which is very high compare to other middle east conutries) it will be a great market to enter. For the booming of Vietnam pharmaceutical market, it will be another great expansion for the company.
8. Constantly new product launching to target different market, example Citrex products D-EPA & EPOFemme Improving market share.
9. With a high NTA, RM2.98 (around 85.6% of it's current price, a big discount)
Investment Risk:
1. The changing of politic environment may affect the group earnings. 60% sales from government concession. The current concession of 15 years will expired November 2009. (The comapny havd submitted documents for renewal before expired. Result will be announced November 2008)
2. The expansion risk to a new market including the government policies.
Conclusions:
You know what, when the first time i read all the historical annual reports, i found that this company's annual report is different. (give me a wow!) I found that, they are really put their effort on the annual report, and it is very informative. They show their strategies very clear, the risk management, inventory management strategy, risk management portfolio............................. It have give me a clear mind of what the company's business structure & how the business operate.
For me, pharmaceutical is a reccession proof industry. In the current unstable economy, put your money in a company which can protect our capital is very important.
Good Investing!
All Fundamental Investor, pls in! （全部的基本投资者请进！）
Dear all fundamental investors & partners,
Would like to do a survey on the fundamental investor's characteristic & year of experince on stock investment on this blog.
Invite all the investors or readers who visited this blog, leave your nick name, invesment experince, your gentle, age （if don't mind)
Thanks!
亲爱的基本投资者及伙伴，
只想做个调查在此部落格游览的基本投资者的特征及投资经验。
请所有游览此部落格的投资者或读者，留下您的名字，经验（年），性别，年龄（如果不介意）。
谢谢！
Would like to do a survey on the fundamental investor's characteristic & year of experince on stock investment on this blog.
Invite all the investors or readers who visited this blog, leave your nick name, invesment experince, your gentle, age （if don't mind)
Thanks!
亲爱的基本投资者及伙伴，
只想做个调查在此部落格游览的基本投资者的特征及投资经验。
请所有游览此部落格的投资者或读者，留下您的名字，经验（年），性别，年龄（如果不介意）。
谢谢！
Saturday, June 21, 2008
Astro (5076) - Coming back from black!
Try to keep an eye on this company if you interested in the media industry for long term invesment purposes. It is coming back from black!
Astro gradually solving it's problem in Indonesia & improving it's operation in India.
Astro gradually solving it's problem in Indonesia & improving it's operation in India.
Tuesday, June 17, 2008
Manulife Insurance Malaysia Berhad (MANULFE 1058)
Manulife Insurance (Malaysia) Berhad was formerly known as John Hancock Life Insurance (Malaysia) Berhad. Manulife’s presence in Malaysia was a result of a large-scale global merger between Canadian-based Manulife Financial Corporation and U.S.-based John Hancock Financial Services, Inc. completed in April 2004. The merger saw the emergence of Manulife Financial Corporation, which has more than 115 years of experience in the life insurance business, as the major shareholder of the Company. The Company began operating as Manulife Insurance (Malaysia) Berhad in January 2005.
The Company in Malaysia has a colourful and illustrious history. First established in 1963 as British American Insurance Co. Ltd, the Company scored many firsts in the industry. Among them are the first insurance company to offer Home Service insurance, and the first financial institution to introduce the 25-year Mortgage Loan scheme. In August 1984, the Company was listed on the KLSE.
In 1994, the Company was renamed John Hancock Life Insurance (Malaysia) Berhad to reflect our association with then called John Hancock Mutual Life Insurance Company in Boston, USA.
Throughout the years, we have positioned ourselves as a leading provider of a wide range of products and services that are designed to meet the financial protection and savings needs of eligible individuals and organisations in Malaysia. We have also gained a reputation as one of the most progressive and financially sound life insurance companies in the country. Currently, we fulfill the needs of more than 270,000 policyholders served by a dedicated agency force of 1,500 and 212 employees. An extensive network of 6 Regional Support Centre and more than 50 agency offices is strategically located throughout Peninsular Malaysia and East Malaysia.
The wide range of products are available through the Manulife Agency force, as well as selected financial services organizations. The innovative product portfolio covers a broad range of needs, which include:
• Life Protection
• Savings
• Health & Medical
• Retirement
• Long Term Care
• Investment
• University Education Funding
Years EPS
1998 0.188
1999 0.285
2000 0.119
2001 0.147
2002 0.143
2003 0.221
2004 0.201
2005 0.199
2006 0.251
2007 0.420
10 years Average EPS Growth Rate = 16.90%
5 years Average EPS Growth Rate = 27.59%
1 year EPS Growth Rate = 67.33%
Comment: Increasing, Good
Years Dividend
1998 0.06
1999 0.17
2000 0.08
2001 0.08
2002 0.09
2003 0.15
2004 0.14
2005 0.14
2006 0.14
2007 0.15
Average Dividend Payout on EPS = 57.55%
Comment: Consider high compare to other companies in the same industries
Years Revenue (000')
1998 252914
1999 257847
2000 327657
2001 410620
2002 375344
2003 407095
2004 435313
2005 474290
2006 583884
2007 573006
10 Years Average Revenue Growth Rate = 10.15%
5 Years Average Revenue Growth Rate = 9.13%
1 Year Revenue Growth Rate = -1.86%
Comment: Decreasing
Years Equity
1998 179305
1999 200949
2000 213211
2001 241945
2002 264730
2003 298104
2004 316225
2005 338324
2006 369622
2007 432583
10 Years Average Equity Growth Rate = 10.34%
5 Years Average Equity Growth Rate = 10.39%
1 Years Equity Growht Rate = 17.03%
Comment: Increasing, Stable
Years ROE(%)
1998 37.92
1999 45.34
2000 11.25
2001 12.21
2002 10.89
2003 14.93
2004 12.81
2005 11.89
2006 13.73
2007 19.65
10 Years Average ROE = 19.06%
5 Years Average ROE = 14.6%
1 Years ROE = 19.65%
Comment: High & Strong compare to other companies in the same industry
Intrinsic Value:
1. Current EPS = 0.42
2. Estimated EPS Growth Rate in the future 10 years = 15% (less than the average EPS & ROE growth rate)
3. Estimated PE = 15
4. Minimum acceptance of return = 15%
EPS become 1.7 after 10 years
Intrinsic Value : RM1.7 x 15= RM25.5 /4 = RM 6.375
Let's take a margin of safety of 50% : RM6.375/2 = RM3.19 > RM2.87 (17/6/08)
Conclusion: Strongly Undervalue if u looking for a yearly 15% return portfolio.
Let's take another culculation for safety reason.
Net Asset per share = RM2.14 (31/12/2007)
ROA = 0.42/2.14 =19.63%
19.63% x (100% - 57.55%) = 8.33%
Years NTA expected
2008 2.16
2009 2.34
2010 2.53
2011 2.74
2012 2.97
2013 3.22
2014 3.49
2015 3.78
2016 4.1
2017 4.44
Let say the 10 years ROE in future is 15% (less than the average historical data)
Average PE = 15
Intrinsic Value = RM4.44 x 0.15 x 15 = RM9.99
Let's take a MOS of 50% = RM9.99 / 2 = RM4.995 > 2.87 (17/6/08)
Comment: Strongly Undervalued
Why i choose Manulfe rather than other insurance company in the market?
1. It focus on it's specialised sector - life insurance
2. Life insurance premium income will have less effect from the economy downturn compare to general insurance especially the car insurance, fire insurance
3. If you go through the Manulfe investment portfolio, it allocate most of its cash in the goverment bond, keep on increasing. (More safe in the economy downturn)
4. Highly efficient management team, which maintain ROE above 15% (Strong)
5. With a high NTA, RM2.14 (around 75% of it's current price, a big discount)
6. Greater return than the other competitors in the same industry.
7. Low PE around 10
8. High Dividend Payout
Investment Risk:
1. Changing government policy
2. Economy Downturn
Conclusion:
Insurance industry is a great cash cow company especially the life insurance company. This kind of industry have less capital investment & maintenance cost than other industry. In the current unstable economy, put your money in a company which can protect us from high inflation is very important. So, try to think about it.
Cheers~~
The Company in Malaysia has a colourful and illustrious history. First established in 1963 as British American Insurance Co. Ltd, the Company scored many firsts in the industry. Among them are the first insurance company to offer Home Service insurance, and the first financial institution to introduce the 25-year Mortgage Loan scheme. In August 1984, the Company was listed on the KLSE.
In 1994, the Company was renamed John Hancock Life Insurance (Malaysia) Berhad to reflect our association with then called John Hancock Mutual Life Insurance Company in Boston, USA.
Throughout the years, we have positioned ourselves as a leading provider of a wide range of products and services that are designed to meet the financial protection and savings needs of eligible individuals and organisations in Malaysia. We have also gained a reputation as one of the most progressive and financially sound life insurance companies in the country. Currently, we fulfill the needs of more than 270,000 policyholders served by a dedicated agency force of 1,500 and 212 employees. An extensive network of 6 Regional Support Centre and more than 50 agency offices is strategically located throughout Peninsular Malaysia and East Malaysia.
The wide range of products are available through the Manulife Agency force, as well as selected financial services organizations. The innovative product portfolio covers a broad range of needs, which include:
• Life Protection
• Savings
• Health & Medical
• Retirement
• Long Term Care
• Investment
• University Education Funding
Years EPS
1998 0.188
1999 0.285
2000 0.119
2001 0.147
2002 0.143
2003 0.221
2004 0.201
2005 0.199
2006 0.251
2007 0.420
10 years Average EPS Growth Rate = 16.90%
5 years Average EPS Growth Rate = 27.59%
1 year EPS Growth Rate = 67.33%
Comment: Increasing, Good
Years Dividend
1998 0.06
1999 0.17
2000 0.08
2001 0.08
2002 0.09
2003 0.15
2004 0.14
2005 0.14
2006 0.14
2007 0.15
Average Dividend Payout on EPS = 57.55%
Comment: Consider high compare to other companies in the same industries
Years Revenue (000')
1998 252914
1999 257847
2000 327657
2001 410620
2002 375344
2003 407095
2004 435313
2005 474290
2006 583884
2007 573006
10 Years Average Revenue Growth Rate = 10.15%
5 Years Average Revenue Growth Rate = 9.13%
1 Year Revenue Growth Rate = -1.86%
Comment: Decreasing
Years Equity
1998 179305
1999 200949
2000 213211
2001 241945
2002 264730
2003 298104
2004 316225
2005 338324
2006 369622
2007 432583
10 Years Average Equity Growth Rate = 10.34%
5 Years Average Equity Growth Rate = 10.39%
1 Years Equity Growht Rate = 17.03%
Comment: Increasing, Stable
Years ROE(%)
1998 37.92
1999 45.34
2000 11.25
2001 12.21
2002 10.89
2003 14.93
2004 12.81
2005 11.89
2006 13.73
2007 19.65
10 Years Average ROE = 19.06%
5 Years Average ROE = 14.6%
1 Years ROE = 19.65%
Comment: High & Strong compare to other companies in the same industry
Intrinsic Value:
1. Current EPS = 0.42
2. Estimated EPS Growth Rate in the future 10 years = 15% (less than the average EPS & ROE growth rate)
3. Estimated PE = 15
4. Minimum acceptance of return = 15%
EPS become 1.7 after 10 years
Intrinsic Value : RM1.7 x 15= RM25.5 /4 = RM 6.375
Let's take a margin of safety of 50% : RM6.375/2 = RM3.19 > RM2.87 (17/6/08)
Conclusion: Strongly Undervalue if u looking for a yearly 15% return portfolio.
Let's take another culculation for safety reason.
Net Asset per share = RM2.14 (31/12/2007)
ROA = 0.42/2.14 =19.63%
19.63% x (100% - 57.55%) = 8.33%
Years NTA expected
2008 2.16
2009 2.34
2010 2.53
2011 2.74
2012 2.97
2013 3.22
2014 3.49
2015 3.78
2016 4.1
2017 4.44
Let say the 10 years ROE in future is 15% (less than the average historical data)
Average PE = 15
Intrinsic Value = RM4.44 x 0.15 x 15 = RM9.99
Let's take a MOS of 50% = RM9.99 / 2 = RM4.995 > 2.87 (17/6/08)
Comment: Strongly Undervalued
Why i choose Manulfe rather than other insurance company in the market?
1. It focus on it's specialised sector - life insurance
2. Life insurance premium income will have less effect from the economy downturn compare to general insurance especially the car insurance, fire insurance
3. If you go through the Manulfe investment portfolio, it allocate most of its cash in the goverment bond, keep on increasing. (More safe in the economy downturn)
4. Highly efficient management team, which maintain ROE above 15% (Strong)
5. With a high NTA, RM2.14 (around 75% of it's current price, a big discount)
6. Greater return than the other competitors in the same industry.
7. Low PE around 10
8. High Dividend Payout
Investment Risk:
1. Changing government policy
2. Economy Downturn
Conclusion:
Insurance industry is a great cash cow company especially the life insurance company. This kind of industry have less capital investment & maintenance cost than other industry. In the current unstable economy, put your money in a company which can protect us from high inflation is very important. So, try to think about it.
Cheers~~
The companies that you choosed, in which industries?
Do you think that, choosing a right industry is important in order to protect our capital?
Sometimes, we will forget the rules of investment. We will attracted by the low price of a stock, low PE ratio of a stock, but we have ignore the industry that this stock is in.
Try to check from your stock investment portfolio, are there any industries that will face stiff competition in future? Are the companies that you choosed, need to pump in huge capital every year to maintain the profit margin? Are the companies that you choosed, can maintain its growth or earnings in the economy downturn? Can the companies protect your capital from the high inflation?
Let's do a comparison between two industries, the insurance industry compare to airline industry.
Capital Investment:
Insurance industry is a high network business, once the business networking stable, the capital investment pump in will reduce to generate earnings growth. But for airline industry is different, it need to pump in huge capital to buy extra planes for expansion purposes. The expansion risk of the airline industry will be higher than insurance industry.
Maintanence Cost:
If that industry that you choose need high maintanence cost, it will reduce our profit in long term. For airline industry, maintenance cost is extremely high. But insurance industry's maintanence cost is low compare to airline industry. Risk reduce.
Raw Material Cost:
As we know that, more than 40% of airline industry cost come from crude oil. The fluctuation of the raw material cost will reduce the earnings margin of airline company. But for Insurance industry, the effect is less.
Economy Downturn:
As we know, in the economy recession every industries will face the earnings pressure. But which industry will face a deep earnings pressure, which industry face less earnings pressure? Let's imagine, in the economy downturn, people will reduce their expenses or traveling, it will directly affect the airline industry. With a high maintainence cost for airline industry, it will make airline industry face a great pressure. But, in a economy downturn, will u ignore to protect yourself from accident?
So......let's choose a company that is in a potential industry, in order for us to sleep nicely everyday!
Sometimes, we will forget the rules of investment. We will attracted by the low price of a stock, low PE ratio of a stock, but we have ignore the industry that this stock is in.
Try to check from your stock investment portfolio, are there any industries that will face stiff competition in future? Are the companies that you choosed, need to pump in huge capital every year to maintain the profit margin? Are the companies that you choosed, can maintain its growth or earnings in the economy downturn? Can the companies protect your capital from the high inflation?
Let's do a comparison between two industries, the insurance industry compare to airline industry.
Capital Investment:
Insurance industry is a high network business, once the business networking stable, the capital investment pump in will reduce to generate earnings growth. But for airline industry is different, it need to pump in huge capital to buy extra planes for expansion purposes. The expansion risk of the airline industry will be higher than insurance industry.
Maintanence Cost:
If that industry that you choose need high maintanence cost, it will reduce our profit in long term. For airline industry, maintenance cost is extremely high. But insurance industry's maintanence cost is low compare to airline industry. Risk reduce.
Raw Material Cost:
As we know that, more than 40% of airline industry cost come from crude oil. The fluctuation of the raw material cost will reduce the earnings margin of airline company. But for Insurance industry, the effect is less.
Economy Downturn:
As we know, in the economy recession every industries will face the earnings pressure. But which industry will face a deep earnings pressure, which industry face less earnings pressure? Let's imagine, in the economy downturn, people will reduce their expenses or traveling, it will directly affect the airline industry. With a high maintainence cost for airline industry, it will make airline industry face a great pressure. But, in a economy downturn, will u ignore to protect yourself from accident?
So......let's choose a company that is in a potential industry, in order for us to sleep nicely everyday!
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