Busy week..
Sorry, my dear readers, it had been a busy week. Riding lessons, preparation for my Ns work (namely the PdP parade). I hardly got time to keep track of the market. But thanks to ET and her effort, plus sam on one of the day's sender of the holy chatlogs to keep me informed at the end of the day.
Should i start with investments or some personal stuffs?
Lets start with investments: Today i will try to cover Asl Marine.
Before going there, i want to point out a discovery, i read the business times the past few weeks, and they had this dummy portfolio, and at this point of time, companies with low PTB (price to book) ratio had the biggest gains. Hmmm, somehow, a book had flash across my mind, it ever mentioned that when pennies stock of companies rise, it mean the bull is reaching its last league of its run. Is it true? Only time can tell.
What is Ptb ratio? Excrept from http://en.wikipedia.org/wiki/Price_to_book
The Price-to-book ratio, or P/B ratio, is a financial ratio used to compare a company's book value to its current market price. Book value is an accounting term denoting the portion of the company held by the shareholders; in other words, the company's total assets less its total liabilities. The calculation can be performed in two ways but the result should be the same each way. In the first way, the company's market capitalization can be divided by the company's total book value from its balance sheet. The second way, using per-share values, is to divide the company's current share price by the book value per share (i.e. its book value divided by the number of outstanding shares).
As with most ratios, be aware this varies a fair amount by industry. Industries that require higher infrastructure capital (for each dollar of profit) will usually trade at P/B much lower than the P/B of (e.g.) consulting firms. P/B ratios are commonly used for comparison of banks, because most assets and liabilities of banks are constantly valued at market values. P/B ratios do not, however, directly provide any information on the ability of the firm to generate profits or cash for shareholders.
This ratio also gives some idea of whether an investor is paying too much for what would be left if the company went bankrupt immediately. For companies in distress the book value is usually calculated without the intangible assets that would have no resale value. In such cases P/B should also be calculated on a 'diluted' basis, because stock options may well vest on sale of the company or change of control or firing of management.
Also known as the "price/equity ratio" (which should not be confused with P/E or price/earnings ratio); or the market cap divided by shareholders' equity.
So, the lower the ratio, is it better?
In Asl Marine's chairman message it was said that:
"Based on the weighted average number of shares, the Group’s basic earnings per share grew by 60.8% to 10.02 cents while net asset value per share increased from 35.95 cents to 47.91 cents as at 30 June 2006."
It seems that after listing their companies on SGX, they really make a good growth out of their value from their companies. Imagine a 60.8% growth in EPS, thats' a big WOW! \
However, what is their future plans? Future plans are really important, because no point having to grow so much in the past, only to fall like aeroplane's nosedive in the coming future, so actually i take more point in the future plans. Quoting from the chairman's message:
"... continued focus on improving our shipbuilding and shiprepair capabilities as well as expansion and upgrading of more sophisticated and larger vessels for our fleet."
So did Asl Marine really did what they promised in 2006, quoting from thiru's reuter info in 24 april 2007:
"By Ovais Subhani SINGAPORE, April 24 (Reuters) - Singapore shipbuilder ASL Marine said on Tuesday its total capacity to build offshore vessels used in oil exploration will nearly double when its new yard in China is fully operational next year. Shares of ASL Marine jumped nearly 8 percent to a record high of S$1.24 after the company's comments, bringing gains so far this year to over 30 percent, after a 79 percent rise last year. Its new eight-hectare (20 acres) shipyard in China' Ang said the new yard has started building smaller and less sophisticated vessels such as barges this month, but would take another year before it starts building offshore vessels that perform logistics services at offshore oil fields. The dollar value of orders for offshore vessels is usually much higher than for harbour tugs or barges. ASL Marine has two more shipyards -- a 30-hectare yard on Indonesia's Batam island, where it can build up to eight vessels a year and repair vessels of A rise in demand for these specialised vessels, as high oil prices spur more exploration, has pushed ASL Marine's order book to record levels above S$500 million ($331 million), from S$382 million on December 31, 2006. With about 110 offshore rigs under construction world-wide, Ang said the demand for anchor handling vessels was likely to stay healthy. Its growing order book has helped the firm, which has a market value of US$192 million, to post net profit of S$16.8 million"
So the chairman of Asl Marine really committed to his promise. Good Management!!
That meets Criteria 1,2, 3 and 7 of the criteria listed in my previous post! Now left with some accounting comparison in 4,5,6 and 8. Now the qns is, do they have conservative debt? Do their ROE > 15% Do their have low Capex to maintain their current operations? Are they undervalued?
Stay tuned for my next post, where i will cover the last 4 points!!!
