Can any sifus here open up my mind?

Scicom have a market price of 2.32, but a Book Value or NTA of 0.29. However the book value was growing year by year. ROE of 5 years average is 33%. Debt to equity ratio is 0.00. From these facts, how do sifus explain the low NTA value in comparison to market price?

My conclusion is
1. Maybe Scicom is being goreng to too high market price
2. The nature of the business require little assets and doesn't require owner to take loan to grow the business. No debt, little assets, and book value become low but ROE still able to remain high.
3. They issued too many shares but do not practice share buyback. Outstanding shares increase, book value decreases.

Am I correct?

On one hand, conclusion number 1 make me want to stay away from it. But on the other hand, the consistent high ROE and high EPS growth rate (25.84% 5 years growth rate) make me want to invest in it.
Based on these facts, will sifus invest in Scicom for long term? If yes or no, why?

This post has been edited by Nemozai: Jun 4 2017, 01:06 AM

Generally, as a rule of thumb, you can say that for a company with a long-form ROE of 10%, the P/BV will roughly be around ~1.0X. However, from here on out, there is an exponential relationship between ROE and P/BV. So say a company with a long-form ROE of 20% may have a P/BV of 3.0X, and a company with a long-form ROE of 30% may have a P/BV of 6.0X etc.

For SCICOM over the past 2 years it has consistently got an ROE of ~42%. It's P/BV is 8.0X. I think it's an OK price. May even be undervalued. But I have no idea about future outlook since that's always priced in.

Personally, I never invest in these types of companies. Cause there is very little downside protection. The moment ROE tumbles P/BV will also fall hard.

I rather invest in "fallen giants" with depressed valuations or "growers" with undemanding valuations to protect myself on the downside. But really, you need to do your own research, cause SCICOM may fall under the "growers with undemanding valuations" category.

What do you guys think about Tenaga Nasional? It remains to be one of the stock with the LARGEST divergence in current market value vs Bloomberg consensus (Bloomberg is at 20% above CMV). https://docs.wixstatic.com/ugd/b9900a_64ee8...99b18b35947.pdf

All the major research houses - Maybank, AmSec, CIMB, Kenanga etc - have it as a top buy.

My question is...Tenaga is effectively the second largest company in Malaysia by market cap. How can there be such a large divergence? Shouldn't all the good and bad be priced in? Reading the analyst reports it seems like only the bad is priced, the good not yet. And YTD Tenaga is in negative territory vs most other major KLCI stocks which are up.

This post has been edited by contestchris: Jun 4 2017, 05:02 PM

as a long term holder of the counter i can say is that if you want a stable stock that pays out dividends, tenaga is the way to go. it's stable and also one of the too big to fail companies in Malaysia.

that being said I'm pulling out all my savings that I placed in October to buy me a wife. that's how much trust I had with tenaga to keep my money.

Well u cannot go wrong with Tenaga..
There's no others companies supply Electricity to our home. I mean for Semenanjung Malaysia
Sabah & Sarawak got their own company..

meh. don't buy sesco. don't think Sarawak will be booming that fast in the near future.

Sarawak not booming??
News says, a lot of PRC projects???

projects berlambak but the buying power is not there. my girlfriend works with Pansar and my dad works with multiple construction projects. both tell me the same thing, projects are alot but once complete its always hard to find buyers, renters, shopping goers, investors and etc.

Sarawak does not have the population to boost up a company's profitably

Actually Tenaga owns 80% of SESB (Sabah Electricity).

Buy yeah I get that Tenaga is one of those secular growth companies in Malaysia. Lean balance sheet, 50-70% retained earnings for future growth from net profit (one of the highest in the KLCI), foreign acquisition, aim to be Top 10 power utility by 2025 in terms of Market Cap (currently no. 18).

I bought when it was at 1.42X BV @ 13.68, I think that was neither too low nor too high.

If however it does hit RM17.00 within the next one year I will sell it and lock my profits in, and then buy again when it eventually dips.

This post has been edited by contestchris: Jun 4 2017, 07:18 PM

Hmm.. Okay..
Understand..

And add on inter state migration.. Moving to KV for better job prospect reduced the population...

+1
U really did your research..
Good..

And yeah, if the price is right, please do take profit..
That how most of us do... Don't fall in love with any of your investment... Must not have feeling towards it.. Must focus on your target

good strategy for investment...

It's interesting to point out that PE = PB / ROE = P / EPS

hence P = PB / ROE * EPS

to spark further discussions.

This post has been edited by lowya: Jun 5 2017, 08:46 AM

Wanna ask:
When you consider a company's equity, do you exclude non-controlling interests?


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Sold my asiabio for breakeven at 0.215...
Danger stock..

Now eyeing for 10% stock...
Dont know what to choose..
Still analysis..

Yes, equity attributable to shareholders is less non controlling interests, unless non controlling interests is in negative territory. See AirAsia for the latter, Tenaga for the former.

yawn.. Monday blue everyone?

sked to buy anything this mid year. so I dumped whatever I made from last month's clinic profit into unit trust.

my portfolio now,
Vitrox - qued to sell
Airasia - qued to sell
Tenaga - dont know whether to hold or not.
Vizione - (dont know why i buy this stupid stock)
DRB-Hicom - Qued to sell
Eco-world
Maybank

which UT u purchased? I am going to meet an agent to buy Lion group.

He have a UT porfolio with FSM MY.