The Stock Chat by EquityChamp

@DS Wijesinghe wrote:I am a medium to long term investor and before I Buy any stock, even 100 shares I look at the past performance for 5 years. I will wait for their 2017/18 financials to be out to do 5 year analysis but for the moment will do a 4 year analysis from 2013/2012 to 2017/2016. 

If you consider the position of the LUCKIEST JKH INVESTOR who would have BOUGHT @ the LOWEST traded PRICE of Rs. 217/- in Jan-Mar quarter of 2013 and SOLD @ HIGHEST trade PRICE of 165/- in Jan-Mar quarter 2018(I assume 165 would have been the highest)

After you account for all the rights purchased and dividends received(I've not factored Future Present value adjustments), the compounded annual rate of return on the total investment is a disappointing 4%. You can predict the rate of return to be even lower the investor would have earned if he had bought and sold at median prices. 


JKH 4 year CAGR growth rates from 2013/12 to 2017/2016


 

Turnover	6%
Net Profit after tax	8%
EPS	3%
NAVPS	19%
DPS	25%

 
Return on Equity 2013 - 15% has dropped to 9.8% in 2017. 
2017/16 PER - 11.59
2017/16 EPS - 11.9


Predicting the next 5 years based on 2017/16, predicted EPS

We know current earnings are down but let's optimistically assume their EPS CAGR as follows
2018/17 - 3%, 2019/18-3%, 2020/19-5%, 2021/20-8%, 2022/21-10% and by 2022 March their EPS would be Rs. 15/75 and Price of a share @ PER OF 11.60 = Rs. 183/- giving an investor a annual CAGR growth of a poor 3%  

Note : Share price could grow much more than predicted above if moves up along with rising NAVPS which had grown by 25% last 4 years

If other members can do their own calculations and share their analysis on this stock which is considered the prime blue chip stock in the CSE, would be invaluable to all of us.

@Eugine Fernando wrote:

@DS Wijesinghe wrote:I am a medium to long term investor and before I Buy any stock, even 100 shares I look at the past performance for 5 years. I will wait for their 2017/18 financials to be out to do 5 year analysis but for the moment will do a 4 year analysis from 2013/2012 to 2017/2016. 

If you consider the position of the LUCKIEST JKH INVESTOR who would have BOUGHT @ the LOWEST traded PRICE of Rs. 217/- in Jan-Mar quarter of 2013 and SOLD @ HIGHEST trade PRICE of 165/- in Jan-Mar quarter 2018(I assume 165 would have been the highest)

After you account for all the rights purchased and dividends received(I've not factored Future Present value adjustments), the compounded annual rate of return on the total investment is a disappointing 4%. You can predict the rate of return to be even lower the investor would have earned if he had bought and sold at median prices. 


JKH 4 year CAGR growth rates from 2013/12 to 2017/2016


 

Turnover	6%
Net Profit after tax	8%
EPS	3%
NAVPS	19%
DPS	25%

 
Return on Equity 2013 - 15% has dropped to 9.8% in 2017. 
2017/16 PER - 11.59
2017/16 EPS - 11.9


Predicting the next 5 years based on 2017/16, predicted EPS

We know current earnings are down but let's optimistically assume their EPS CAGR as follows
2018/17 - 3%, 2019/18-3%, 2020/19-5%, 2021/20-8%, 2022/21-10% and by 2022 March their EPS would be Rs. 15/75 and Price of a share @ PER OF 11.60 = Rs. 183/- giving an investor a annual CAGR growth of a poor 3%  

Note : Share price could grow much more than predicted above if moves up along with rising NAVPS which had grown by 25% last 4 years

If other members can do their own calculations and share their analysis on this stock which is considered the prime blue chip stock in the CSE, would be invaluable to all of us.

I appreciate your workout but if you are going to trade with those calculations, it won`t work in Colombo Stock Market, this market is really manipulated, for a example see what happened to SHL with in a short period it has shoot up from 12/- to 26/- see the price different,  this is not because of your workings method this is 100% manipulated to get their Rights a success. Like this there are many shares eg. East, Jins etc.. my way of trading is only short term, with the market sentiment of the day, for exp. Dist. I bought at 19.20 and sold @ 23.40 with in 3 days. I am not asking every one to follow this, this my only my way of trading....GD

@glad wrote:

@Eugine Fernando wrote:

@DS Wijesinghe wrote:I am a medium to long term investor and before I Buy any stock, even 100 shares I look at the past performance for 5 years. I will wait for their 2017/18 financials to be out to do 5 year analysis but for the moment will do a 4 year analysis from 2013/2012 to 2017/2016. 

If you consider the position of the LUCKIEST JKH INVESTOR who would have BOUGHT @ the LOWEST traded PRICE of Rs. 217/- in Jan-Mar quarter of 2013 and SOLD @ HIGHEST trade PRICE of 165/- in Jan-Mar quarter 2018(I assume 165 would have been the highest)

After you account for all the rights purchased and dividends received(I've not factored Future Present value adjustments), the compounded annual rate of return on the total investment is a disappointing 4%. You can predict the rate of return to be even lower the investor would have earned if he had bought and sold at median prices. 


JKH 4 year CAGR growth rates from 2013/12 to 2017/2016


 

Turnover	6%
Net Profit after tax	8%
EPS	3%
NAVPS	19%
DPS	25%

 
Return on Equity 2013 - 15% has dropped to 9.8% in 2017. 
2017/16 PER - 11.59
2017/16 EPS - 11.9


Predicting the next 5 years based on 2017/16, predicted EPS

We know current earnings are down but let's optimistically assume their EPS CAGR as follows
2018/17 - 3%, 2019/18-3%, 2020/19-5%, 2021/20-8%, 2022/21-10% and by 2022 March their EPS would be Rs. 15/75 and Price of a share @ PER OF 11.60 = Rs. 183/- giving an investor a annual CAGR growth of a poor 3%  

Note : Share price could grow much more than predicted above if moves up along with rising NAVPS which had grown by 25% last 4 years

If other members can do their own calculations and share their analysis on this stock which is considered the prime blue chip stock in the CSE, would be invaluable to all of us.

I appreciate your workout but if you are going to trade with those calculations, it won`t work in Colombo Stock Market, this market is really manipulated, for a example see what happened to SHL with in a short period it has shoot up from 12/- to 26/- see the price different,  this is not because of your workings method this is 100% manipulated to get their Rights a success. Like this there are many shares eg. East, Jins etc.. my way of trading is only short term, with the market sentiment of the day, for exp. Dist. I bought at 19.20 and sold @ 23.40 with in 3 days. I am not asking every one to follow this, this my only my way of trading....GD

How do you identify the horses?

@EquityChamp wrote:Hi guys, good discussions and various views. This is what we want in a public forum. Don' t forget that a fruitful discussion in a public forum can have a very big impact on the society at large.

@EF,  I do agree with your view to a certain extent as CSE is still relatively small compared to other developed markets and as such there will always chances for manipulation. Other than the SHL example I can state LGL & BFN as well. Are these stocks worth this much. On the other why the prices of stocks such as HNB, COMB, LFIN, ALLI, LWL,  etc stands at these prices. 

@DS, your approach is best suit for equity investments representing one side of the camp, the other was the trading camp . I agree that the JKH has given poor returns within the last 3-4 years largely attributable to changes in macro economic environment. You know what I mean here. On the other hand if we evaluate some other stocks like HNB, SAMP, DIAL, TPL or MAL based on your same criterion then the picture will be completely different. It's us who need to re-evaluate our portfolios consistently and make adjustments that will suit to the different contexts.

@EquityChamp wrote:Hi guys, good discussions and various views. This is what we want in a public forum. Don' t forget that a fruitful discussion in a public forum can have a very big impact on the society at large.

@DS, your approach is best suit for equity investments representing one side of the camp, the other was the trading camp . I agree that the JKH has given poor returns within the last 3-4 years largely attributable to changes in macro economic environment. You know what I mean here. On the other hand if we evaluate some other stocks like HNB, SAMP, DIAL, TPL or MAL based on your same criterion then the picture will be completely different. It's us who need to re-evaluate our portfolios consistently and make adjustments that will suit to the different contexts.

@EquityChamp wrote:Thanks DS. Yes I agree on Sampath bank and I still believe it will double in price within the next five years if you buy today. Just forget the dividend and if you compare how the Sampath Bank has grown it's market capitalization during last 3 to 4 years is remarkable. The market capitalization  has doubled within this period but the ASPI still languishing to reach even the level prevailed at the end of 2014.