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Sri Lanka Equity Forum » Stock Market Talk » COMD net assets value

COMD net assets value

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1 COMD net assets value on Wed Apr 25, 2018 3:28 pm

Dietoday


Stock Trader
Dear Experts

I am new to the share market & I just analyzed few stocks & noticed that COMD net assets value is very smart . But Market value is just 40% of net assets.  Surprised 

Please explain why this ? Please advice me to whether purchase this share is worth ? bounce

Thanks

2 Re: COMD net assets value on Wed Apr 25, 2018 10:12 pm

DS Wijesinghe


Manager - Equity Analytics
Manager - Equity Analytics
@Dietoday wrote:Dear Experts

I am new to the share market & I just analyzed few stocks & noticed that COMD net assets value is very smart . But Market value is just 40% of net assets.  Surprised 

Please explain why this ? Please advice me to whether purchase this share is worth ? bounce

Thanks
 Welcome to the world of possibilities to make your money grow by investing intelligently!!! Net asset value is just 1 of the indicators and when you BUY do not rely upon just 1 or 2 factors. For example NAVPS of Hayleys Rs. 516/- and the share is trading approximately 42% of it NAVPS @ Rs.220/- . Naturally anyone will be tempted to buy HAYL at these levels when it's NAV is very high. (perhaps HAYL will never come back to these price levels we can't say with certainity) 

I am a medium to long term investor and would share below from one of my previous posts in this forum to advice newcomers and freshers interested in medium to long term investing

There are a few cardinal rules adopted by all time highly successful investors. Fortunately for freshers like you such information can be freely accessed today at a very early stage in Investing, where as I never had that luxury when I stepped in to the capital market in my early twenties. It was painful self learning indeed.

No.1 rule is, always invest with Certainty as Investing is not Gambling. Always invest in a company from an industry that you understand and like. You need to love the business of the company you invest in. For example If you don't like alcohol on principle, don't invest in companies operating in that industry.Also If you really don't understand what the business is all about, then you're gambling on them. Always Remember INVESTING IS NOT GAMBLING. 

After you had figured out that you love the industry and the company, look at Return on Investment Capital (ROIC), sales, profitability, Earnings per share(EPS), Net Asset Value Per Share(NAVPS), annual dividend for a least 5 years.(preferably for 8 years). Compounded annual growth rates of these performance yardsticks need to be a minimum of 10% per annum during the 5 or 8 year period you are reviewing. The other measures are Net Cashflows and the Current Asset:Current Liability ratio. If the performances are not consistent with visible swings up and down, don't even bother to touch the company you are researching.

Before you invest in any business pay close attention to the people who run it. Do it even after you've invested in that business. Is the CEO a honest and a great leader? He/she HAS to be Shareholder driven and one who will have great ambition to take the company to greater heights.

If the management team doesn't have talent or integrity, they'll run the business into the ground and you'll be in danger of losing your capital. Therefore please carefully research the CEO and his track record.

Read very carefully the CEOs message to the shareholders in the Annual Reports and quarterly reports. A good CEO would always make an effort to explain in a way that everyone can easily understand. If you are confused as to what the CEO is trying to tell the shareholders, it could be that the management is intentionally misleading and the company might be in trouble. 

Above are some of the tips I have learned from some of the all time highly successful investors who beat the market annually, whether it is BULL or BEAR.

If you stick to these cardinal rules you will earn a return on your investment beating Bank FD rates even perhaps during Bear periods. CSE is going through a very rough Bear market patch from Jan 2015 to-date and we need to ensure our investments are safe and secure even during hard and difficult times


Wish you successful investing in equities to grow your money and wealth as you progress in life!!!

3 Re: COMD net assets value on Thu Apr 26, 2018 8:54 am

Dietoday


Stock Trader
This is great advice to me.

Thanks DS Wijesinghe  Very Happy

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