Value Investing 01 (May 08 - Dec 08)

[fclim]

*Gulp* eh... for the record, I'm still not vested in any of them...

3Q-08 is coming up, dunno will be better or worse?
DBS 3Q-08 - to be announced on 7-Nov-08
OCBC 3Q-08 - to be announced on 5-Nov-08
UOB 3Q-08 - to be announced on 31-Oct-08

* - Prices as at 24-Oct, 1:45pm, from Yahoo Financial website.

DBS
Price = 10.42*
NAV = 12.78
P/Nav = 0.82

OCBC
Price = 5.03*
NAV = 6.41
P/Nav = 0.79

UOB
Price = 12.68*
NAV = 12.63
P/Nav = 1.00

have fun,
fc

Information Sources: As per previous posts.

[caseyc]

FC,
The NAV of OCBC shouldn't be pegged at $6.41, since this is the price after "valuation surplus" (see last qtr's report). In the curr mkt, I'm not sure how much of this "surplus" still exists. I would use the $4.60 figure (before surplus) instead.

[fclim]

FC,
The NAV of OCBC shouldn't be pegged at $6.41, since this is the price after "valuation surplus" (see last qtr's report). In the curr mkt, I'm not sure how much of this "surplus" still exists. I would use the $4.60 figure (before surplus) instead.

Hi caseyc,

it is definitely more prudent to use $4.60, instead of $6.41...
but hor, "value" is in the eyes of beholder lar...
so, individuals need to distill these figures from companies...

as always, please kindly take my posts with a HUGE pinch of salt hor...

have fun,
fc

[kennynah]

i am just curious and by no means trying to rough anyone's fur here....

it could $6.41, then some one says $4.60....and so...why not $2.37 ?

[fclim]

i am just curious and by no means trying to rough anyone's fur here....

it could $6.41, then some one says $4.60....and so...why not $2.37 ?

Hi k,

ermm... let me see if i can confuse / convince you (and my silly self)....

perhaps, i should look at the "valuation" from the angle of time dimension...

just 6 mths ago, the equities of what OCBC re-valued could have been correct, but now, the re-valuation is probably a waste of money, coz the "latest" value is probably back to the same or even lower level... before the re-valuation...

also hor, the re-valuation done by OCBC include their property portfolio... most likely a waste of their $$$ as well... i.e. either same value or lower than the value before the re-valuation...

anyway, how then, should i look at this value? isn't this the key question in all investment? different people takes different approach?

for me, the reason why i tot $6.41 was reasonable was that i tot the local banks would be conservative... but with all the current economy gloom, perhaps, the "buffer" should be stretched?

but hor, i must admit that now, i am super greedy... if not for my silly idea of saving up for a value-for-money investment property next year, i'm most probably already 100% vested in the stock market and the portfolio would be about -20%... which would not make me the most happy person in the world, but i wouldnt loss sleep over it as well...

as always, please read with discern...

have fun,
fc

[caseyc]

K, both the $4.60 & $6.41 numbers are stated in the FR. According to the FR, the $6.41 is the result of re-valuing some of the properties + securities, resulting in a gain of $5b (valuation is done back when the FR is published).

Unf, bank's assets are difficult (at least for me) to comb through and assign accurate values to them, so we'll pretty much have to live with what's reported. For all we know, you may be right that the real NAV is only $2+

With the impending accounting change to "mark to value @ maturity" for some assets, it's going to make the job of having a accurate NAV even tougher.

[kennynah]

thanks fclim/caseyc for your kind indulgence .... hahaha... maybe other people would have by now thrown "bok chui kan" (empty beer bottles) at me for continuously querying the valuation approach.

frankly, i am not quite confused and neither am i convinced that this "valuation" method is any useful in getting to the actual value of any entity... this is especially so when so much within the company, both assets and liabilities, are subjectively made out and penned into an accounting figure. again, depending on the accounting standards used, although some form of standardization has been adopted over many years, this has not quite deterred CFOs from massaging these numbers (within the ambit of accounting rules) to project whichever status so desired.

of cos, my opinion remains mine and in no way challenge anyone's occult believe in "valuation" technique.

ok....you can all start hurling those bok chui kans now...

[fclim]

ok....you can all start hurling those bok chui kans now...

mai tu liaoz... *throw 2 empty bottles, aiming at k*

hey casey, so you think the 5B worth of surplus valuation (for 2Q-08) should be treated as wipe out liao? maybe you are right!!!

anyway, i'm still not vested though fingers (and backside) itchy liao...

of coz, till date (2 yrs+) my nett results in investment is still negative... so, better dun listen to my blabbering nonsence...

have fun,
fc

[iam802]

I think the other assumption that one can challenge is:

Can a stock trade below its NAV? Maybe there is nothing wrong with the valuation.

Just something to think about.

[winston]

In these times, I only look at Cash/Share.

Thereafter, I look at whether they can breakeven on their business going forward ie. not burn existing cash.

If Cash/Share is substantially higher than the Share price and if they are not going to burn a lot of existing cash, then you may wanna back up the truck slowly as there could also be some undisclosed forex losses, parent company going bankrupt etc..