As stated in the above blog post, I will review the performance of the portfolio quarterly. The following is the result of 2014Q3, loss 16.09% on 1 October 2014.
Stay tune to the next quarter! :)
Thursday, October 2, 2014
The Magic Formula Portfolio 2014Q3 Review
In 2014Q2, I started building up The Magic Formula Portfolio following the buy and sell criteria listed in the blog post titled Start Building Up The Magic Formula Portfolio.
As stated in the above blog post, I will review the performance of the portfolio quarterly. The following is the result of 2014Q3, loss 16.09% on 1 October 2014.
On the same day, I added the following stocks to the portfolio:
Approximate 15.3% of the portfolio fund allocated equally to ETM and LQDT. 4 more stocks to go to complete build up the portfolio
Stay tune to the next quarter! :)
As stated in the above blog post, I will review the performance of the portfolio quarterly. The following is the result of 2014Q3, loss 16.09% on 1 October 2014.
Stay tune to the next quarter! :)
Saturday, July 5, 2014
The Magic Formula Portfolio 2014Q2 Review
In 2014Q2, I started building up The Magic Formula Portfolio following the buy and sell criteria listed in the blog post titled Start Building Up The Magic Formula Portfolio.
As stated in the above blog post, I will review the performance of the portfolio quarterly. The following is the result of 2014Q2, loss 3.49% on 30 June 2014.
On 01 July 2014, I added the following stocks to the portfolio:
Approximate 25% of portfolio fund allocated equally to ONE, STRA and TZOO.
Stay tune to the next quarter! :)
As stated in the above blog post, I will review the performance of the portfolio quarterly. The following is the result of 2014Q2, loss 3.49% on 30 June 2014.
On 01 July 2014, I added the following stocks to the portfolio:
Stay tune to the next quarter! :)
Tuesday, April 1, 2014
Start Building Up The Magic Formula Portfolio
Buy shares in good businesses (ones with high returns on capital) but only when they were available at bargain prices (priced to give us a high earnings yield)So I decided to give it a shoot by building up $5,000 Magic Formula Portfolio on today, April Fool of 2014. I plan to build up 12-stocks portfolio gradually by buying 3 stocks on the first market day of a quarter. For example today is first market day of quarter 2, I bought 3 stocks today. I will buy 9 more stocks on next 3 quarters and should filled up the portfolio by 1 Jan 2015.
What to Buy
I created the stock list with the following steps:
- Retrieve the list of stocks from http://magicformulainvesting.com/ where the market capitalization is between $88M to $1,000M ($1B)
- Further narrow down the stocks with F-Score >= 7 by using GuruFocus.
- Retrieve DER and DY of stocks from http://money.msn.com/stocks/. Lower DER and higher DY take precedence.
When to Sell
The portfolio will be reviewed on March 31, June 30, September 30, December 31 of the year. I will sell the stocks of the portfolio which meet any criteria below:
- The stock no longer exists in the list of stocks of http://magicformulainvesting.com/
- There's new set of stocks created by following 3 steps above to replace the portfolio's poor performers (Sell the losers; Keep the winners.)
stocks that hold more than 1 year (Validity of this criteria to be determined on 1 Jan 2015).
Happy Investing! :)
Version History
29 Dec 2014 Edited item 2 of When to Sell
31 Dec 2014 Edited item 2 of What to Buy. Use GuruFocus to find out F-Score instead of http://www.grahaminvestor.com/quotes/.
25 Mar 2015 Added a description of the Magic Formula
Wednesday, January 1, 2014
2013 Portfolio Review
Goodbye 2013, hello 2014, time is passing fast, it is time for annual review. :)
Portfolio Summary
From the table above, it is clear that return of all portfolio items are decent compare to last year. My US Portfolio is beating both Dow Jone 15 and Fortune 10, +16.32% and +2.92% respectively. My HK Portfolio is beating both Hang Seng HK 15 and Hang Seng Mainland 12, +8.97% and +13.68% respectively. My Malaysia Portfolio is beating FBMKLCI, +12.61%. In conclusion, my last year investment
performance beating all these index funds, 2013 is definitely a good year to me :).
Please see tables below for detail of each index fund.
US Market
Dow Jones 15
Fortune 10
Hong Kong Market
Hang Seng HK 15
Hang Seng Mainland 12
Portfolio Summary
 |
| Cost is based on market open price on 1 June 2011. Gain/(Loss) calculation with dividends included. |
US Market
Dow Jones 15
Fortune 10
Hong Kong Market
Hang Seng HK 15
Hang Seng Mainland 12
Wednesday, January 2, 2013
2012 Portfolio Review
Goodbye 2012, hello 2013, it is time for annual review.
Portfolio Summary
From the table above, it is clear that return of all portfolio items are decent compare to last year. My US Portfolio is beating both Dow Jone 15 and Fortune 10, +8.91% and +0.19% respectively. My HK Portfolio is beating both Hang Seng HK 15 and Hang Seng Mainland 12, +5.36% and +6.59% respectively. In conclusion, my last year investment
performance beating all these index funds, 2012 is a good year to me :).
Please see tables below for detail of each index fund.
US Market
Dow Jones 15
Fortune 10
Hong Kong Market
Hang Seng HK 15
Hang Seng Mainland 12
Portfolio Summary
 |
| Cost is based on market open price on 1 June 2011. Gain/(Loss) calculation with dividends included. |
US Market
Dow Jones 15
Fortune 10
Hong Kong Market
Hang Seng HK 15
Hang Seng Mainland 12
Tuesday, April 3, 2012
Comparison of Companies in the Glove Industry
The author published the analysis report here is for his own reference only. It is not an indication of the author's business interests for companies being analyzed. It is definitely not an investment advice, please see the full disclaimer located at the bottom of the blog post.
If you are regular reader of this blog, you can see that most of the stock analysis blog post is a comparison of a pair of stocks. How do I pick the pair? I attempt to analyze and compare two companies doing similar businesses or operating in the same industry sector. I think this approach make sense, otherwise what is the point of comparing apple to orange?
Table below is the basic ratio analysis for companies in the glove industry based on the closing price of 03 April 2012.
Given data above, I can pick two companies for further analysis and comparison.
I would like to invite you to join me for creating a similar table for industry sectors such as timber, iron, packaging, automobile parts, etc. which you would like to start studying and analysis. Would you be interested?
Updated: Add KOSSAN and RIVERSTONE, update all prices to closing price of 03 April 2012 and related reading.
If you are regular reader of this blog, you can see that most of the stock analysis blog post is a comparison of a pair of stocks. How do I pick the pair? I attempt to analyze and compare two companies doing similar businesses or operating in the same industry sector. I think this approach make sense, otherwise what is the point of comparing apple to orange?
Table below is the basic ratio analysis for companies in the glove industry based on the closing price of 03 April 2012.
I would like to invite you to join me for creating a similar table for industry sectors such as timber, iron, packaging, automobile parts, etc. which you would like to start studying and analysis. Would you be interested?
Updated: Add KOSSAN and RIVERSTONE, update all prices to closing price of 03 April 2012 and related reading.
Friday, March 30, 2012
United Malayan Land vs. Daiman Development
The author published the analysis report here is for his own reference only. It is not an indication of the author's business interests for companies being analyzed. It is definitely not an investment advice, please see the full disclaimer located at the bottom of the blog post.
United Malayan Land Berhad's (hereafter called "UMLAND") principal activities including property development, property investment, investment holding and leasing of lands. Daiman Development Berhad's (hereafter called "DAIMAN") principal activities including property development, property investment, sale of building materials, operation of golf, sports and recreation clubs, operation of bowling centre, nursery operation and investment holding.
Side-by-side Comparison
Capitalization
Measure by size, UMLAND is slightly larger than DAIMAN, 476 millions and 389 millions
Income Items
Important items under this section is per share earnings and dividend, DAIMAN is the all-time winner for both per share earning and dividend except averaged earned per share in 2009 to 2011 period.
Balance Sheet Items
DAIMAN have very solid balance sheet compared to UMLAND, Cash or cash equivalents almost can cover the Total liabilities, it is a cash-rich company which liquidity per share is 0.46.
Ratios
By look at Price ratios, DAIMAN is more attractive at the moment given it sell at lower multiple of 2011's earnings and much lower Price/book value per share, even UMLAND achieved slightly higher dividend yield.
DAIMAN advantages are much higher profit margin, almost double of UMLAND as shown by Net income/sales, but lower return on book value measured by Earnings/book value per share, which may due to the adoption of higher leverages by UMLAND.
UMLAND has much better earning growth rate compared to DAIMAN, please take note that DAIMAN achieved negative earning growth in 2009-2011 compared to 2005-2007.
Price Record
UMLAND and DAIMAN has comparable growth rate in near-term price record, but UMLAND achieved better growth in long-term, which may due to it's price start from a low base.
Financial Summary
By looking into detail of the financial summary of UMLAND, the historical growth records doesn't look good, merely single digit growth, especially making a loss in 2008. The bright side of data above is UMLAND achieved acceptable 5 years average profit margin which recorded 15.9% and 14% for operating margin and net margin.
DAIMAN has better historical growth record compared to UMLAND, recorded CAGR for 13.58% in sales and 17.4% operating income, but low and unstable net income and earning per share, 6.7%. The bright side of this company is the management buyback it's own shares in the market which reduce 2.2% of it outstanding shares. Also, DAIMAN achieved impressive 5 years average profit margin which recorded 34.2% and 29.78% for operating margin and net margin, which more than double of UMLAND.
As conclusion, the ultimate winner of this comparison is DAIMAN.
How Much DAIMAN Worth?
Given the company CAGR of EPS is 6% (approximately 6.7% in the past 5 years) and Dividend Per Share is 5% in the next 10 years, the EPS of the company will be RM$0.235 in 2020 (included adjustment of 2 bad years in 10 which reduce 30% of group's net profit) and the forecast dividends received over the 10 years period totaling RM$0.64 (included adjustment of 2 bad years).
If the stock price of DAIMAN sell at 8 times earning in 2021, it is RM$1.88 and RM$2.53 (included total dividends received) per share. Given annual 6% inflation rate in next 10 years, the discounted rate is 0.591898. So, RM$2.53 discounted to today price, it is RM$1.50 per share.
The discounted price is 23.7% lower comparing to today (30 March 2012) closing price at RM$1.85. The stock is overvalued! What do you think?
I'd love to hear comments from you!
United Malayan Land Berhad's (hereafter called "UMLAND") principal activities including property development, property investment, investment holding and leasing of lands. Daiman Development Berhad's (hereafter called "DAIMAN") principal activities including property development, property investment, sale of building materials, operation of golf, sports and recreation clubs, operation of bowling centre, nursery operation and investment holding.
Side-by-side Comparison
Measure by size, UMLAND is slightly larger than DAIMAN, 476 millions and 389 millions
Income Items
Important items under this section is per share earnings and dividend, DAIMAN is the all-time winner for both per share earning and dividend except averaged earned per share in 2009 to 2011 period.
Balance Sheet Items
DAIMAN have very solid balance sheet compared to UMLAND, Cash or cash equivalents almost can cover the Total liabilities, it is a cash-rich company which liquidity per share is 0.46.
Ratios
By look at Price ratios, DAIMAN is more attractive at the moment given it sell at lower multiple of 2011's earnings and much lower Price/book value per share, even UMLAND achieved slightly higher dividend yield.
DAIMAN advantages are much higher profit margin, almost double of UMLAND as shown by Net income/sales, but lower return on book value measured by Earnings/book value per share, which may due to the adoption of higher leverages by UMLAND.
UMLAND has much better earning growth rate compared to DAIMAN, please take note that DAIMAN achieved negative earning growth in 2009-2011 compared to 2005-2007.
Price Record
UMLAND and DAIMAN has comparable growth rate in near-term price record, but UMLAND achieved better growth in long-term, which may due to it's price start from a low base.
 |
| UMLAND's Financial Summary |
 |
| DAIMAN's Financial Summary |
As conclusion, the ultimate winner of this comparison is DAIMAN.
How Much DAIMAN Worth?
Given the company CAGR of EPS is 6% (approximately 6.7% in the past 5 years) and Dividend Per Share is 5% in the next 10 years, the EPS of the company will be RM$0.235 in 2020 (included adjustment of 2 bad years in 10 which reduce 30% of group's net profit) and the forecast dividends received over the 10 years period totaling RM$0.64 (included adjustment of 2 bad years).
If the stock price of DAIMAN sell at 8 times earning in 2021, it is RM$1.88 and RM$2.53 (included total dividends received) per share. Given annual 6% inflation rate in next 10 years, the discounted rate is 0.591898. So, RM$2.53 discounted to today price, it is RM$1.50 per share.
The discounted price is 23.7% lower comparing to today (30 March 2012) closing price at RM$1.85. The stock is overvalued! What do you think?
I'd love to hear comments from you!
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