@MOBA, actually for those who bought at 50 and today is worth 9, their loss is limited, if they didn't average down. E.g. if one spent RM10k at 50, and didn't average down, the current value = RM1.8k and loss = RM8.2k.
Whereas, compare to another investor where every 10% drop, they average down. They would have averaged down 16 times. 50 > 45 > 40.5 > 36.5 > 32.8 > 29.5 > 26.6 > 23.9 > 21.5 > 19.4 > 17.4 > 15.7 > 14.1 > 12.7 > 11.4 > 10.3 > 9.3. If initial spend is 10k and each time average down by 10k, by now, they have spent RM170k. Total outlay = RM170k. Total shares = 8993 (bought more at lower price). Average cost = 18.9. At current price of RM9, their loss is smaller % (18.9 - 9) / 18.9 = 52% loss. However, the 52% loss is applied to a much larger base. In RM terms, loss = RM89,061!!!
In other words, if you do not average down, your loss is limited to only RM8.2k! But if you blindly average down every 10%, your loss is now RM89k! Those who average down in a losing stock lose more than 10 times those who do nothing.
The morale of the story is this - be highly selective of the stock that you average down. It must be a growth stock or a stock that will recover, with the passage of time.
When a stock has history of declining over the past 10 years like BAT, the more time you give BAT, the lower its price. That kind of stock is NOT a suitable candidate for averaging down.
In fact, BAT is a wealth destroyer mathematically speaking, when its price keeps falling the past 10 years. What is going to turn this stock around?
@tnang, hard to say for now if RM9 will become strong resistance. Normally, I like to see price fall, then rise and test RM9. Depending on its price and volume, we may be lucky and be able to see if RM9 is indeed the new resistance or not. For now, can't tell yet.
So many tried to pick bottom here. Some one said 9.15 ... for a short while, it held ... then, someone bought big at 9.04 ... for a couple of days, it looks like it held ... then, someone said support is 9 / 8.99 ... for a day, it held ... now 8.94 ... and still downtrending.
So many heroes ... just make sure you don't average down in a downtrend ... then, you go to zero faster.
Nevertheless, downtrend are incredibly volatile ... it can go down for many, many, many days and suddenly, in just 1 or 2 days, all that losses disappear ... very hard to predict.
To those who bought at RM10+ saying this was multi-decade support floor that will never be broken, when I said it can fall below RM9, looks like we are there now and sad that those who averaged down are now in clear negative territory and will find their losses now getting more permanent. Time is the enemy of inferior, declining EPS stocks. The longer you hold, the bigger your losses become.
The other consideration is dividend payout ratio. Normal payout ratio is around 80%. Last year, it earns 16.5 sen and pays out 9 sen or 55%, i.e. it is consolidating and rebuilding its war chest and will have room in the future to pay out more. 9 sen / 1.5 ~ 6% dividend yield with potential to rise. Q1/24 3 sen equivalent is already higher than Q1/23 2 sen i.e. 2024 dividends is looking potentially better than 2023. Its earnings can dip a little bit, and it can support a marginally higher dividend this year and still have a lower than long term average payout ratio of 80%. I am very comfortable with its numbers. Only the price chart needs respectiing and not chase.
Between owning an FD vs buying this stock, to me, the choice is obvious. In a diversified portfolio, this is better if you can find a number of stocks like this to own. The dividend yield is solid 6%, backed by business. Lower prices is opportunity to accumulate. I don't this this business will be reporting worse EPS than 2019/2020 levels. It generates cash and is paring down its debt (slowly). It pays dividends to shareholders, typically 1 time in shares and 3 times in cash. Like any stocks, I will never own more than 5% in my portfolio no matter how appealing the business is, but it is above average holdings due to its attractiveness longer term.
Having said that, for this stock price action, there's 2 important things to note: 1. It is in a long term decline over the past 10 years. 2. There's a divergence between its share price action the past 5-10 years vs its business performance.
1. The long term price decline is something all investors and traders should respect i.e. such a long term decline is not so easy to halt and reverse - this usually takes time. Only patient investors and traders should consider such stocks.
2. The divergence between share price vs business performance will not appeal to momentum price traders but appeals to long term investors. Over the past 4 years, its EPS is actually showing a slight increase printing a bottom, nearly 9.95 sen/share. Last 4 quarters is 15.68 sen/share. This is a profitable business, notwitstanding all the TALKS about many things. Short term, TALKS generate fears and lower prices. Longer term, the market is a weighing machine - all that earnings will eventually mean something.
Because of this, if I am buying, I will never chase this stock. The long term downtrend is more likely to reassert itself. The standard trading strategy is to sell on strength because odds are good you can buy back cheaper.
Nevertheless, this company is long on turning around - it's EPS is already turned around 4 years ago, but its price has yet to follow - so, sellers beware because this kind of situation will not last long - chart wise, it looks like good odds, but market has a way to fool chartists and technical traders.
My strategy remains unchanged. Accumulate at lower prices, and sell partially on strength at higher prices. PARTIALLY because there's a risk, when it rises, it might not go down as long as the underlying business numbers keep improving.
1 Treasury shares for every 50 ordinary shares held will not cause a flood of shares to be sold in the market - for most shareholders, that 1 for every 50 will not cause them to sell - e.g. I won't be selling the dividend shares because it is only 2% extra. But 2% is a nice return as SPTOTO pays dividends 4 times per year, and getting 2% for 1 out of the 4 payments in a year is very, very nice. BEATS EPF and FD by a mile.
@sheldon, read the QR carefully - the dividend of ~ 3 sen/share is funded by Treasury shares and not by issuing new shares. The Treasury shares have been built up by buying SPTOTO shares when its price is depressed. This means the cost of paying out dividends is cheaper than giving straight cash - it's good management by SPTOTO:
"The Board has declared a first interim share dividend of approximately 26.46 million shares on the basis of 1 treasury share for every 50 existing ordinary shares held (fractions of treasury shares to be disregarded) in respect of financial year ending 30 June 2024. Based on the treasury shares book cost of RM39.58 million (equivalent to approximately RM1.50 per share), the share dividend is equivalent to approximately 3.0 sen per share based on the ordinary shares in issue with voting rights as at 20 November 2023 of 1.32 billion (previous year corresponding quarter ended 30 September 2022: cash dividend of 2.0 sen per share)"
@pang72, I think when HAPSENG fell from 7 down to 6, to 5, to 4, to nearly 3, market was worried that something has been broken permanently in HAPSENG.
However, with the declaration of 15 sen dividend, this brings YTD dividend to 25 sen, within its range over the past 8 years. 25 sen is within 80% of its long term payout ratio over past 8 years. This means HAPSENG business model has not broken over past 8 years, notwitstanding a lot of fears and traders claiming HAPSENG is dead at RM3.
Its long term historical price is near RM7. There is still a long way to go.
Still, the reason is not important. Price action says it all. My strategy remains unchanged. Never chase. Take partial profits on strength and recycle into stocks that are cheaper. HAPSENG still pays attractive dividends on 25 sen - that's still 5% at current price of RM5. Still pays better than FD, although slightly below EPF now.
For me, as long as I can still find decent, wonderful businesses paying dividend yields higher than 5%, I will sell HAPSENG on strength (since on strength, its dividend yield will dip below 5%), to buy higher dividend yields, if all else are identical / comparable.
First, observe that Q1/Q2/Q3 earnings in 2023 is consistently below 2022. This is about business profits. It has nothing to do with GEG talks, or talks about illicit cigarrettes, etc. Talk is talk and talk is cheap. But profits is cold hard cash that is real and has to do with the business. At the end of the day, shareholders own businesses especially long term. Buffett always say - in the short term, market is a voting machine but in the long term, market is a weighing machine. Short term, price can go up and down due to sentiment. Long term, price goes up or down due to earnings, value, and other numbers.
I focus on the numbers and the long term price charts. I ignore talks which are cheap.
When investing in stocks, the first rule is - are you sure you will beat FD and EPF over 5-10 year period? If not, better to just park one's monies in FD or EPF. If one invests in BAT over past 5-10 years thinking it is cheap, under valued, low price over-done, etc. etc. etc., one's returns will under-perform FD and EPF and in this case, one is better off not following BAT or ever heard of BAT before.
For those hoping that BAT will go up past RM10, ask yourself - will BAT EPS hit 85 sen or give DPS as high as 83 sen like in 2020?
If not, it is unlikely that it will touch RM10-11 again. BAT is too big a stock for anyone to "goreng".
If foreigners come back to Bursa in a significant, then, maybe this could happen but many other stocks will outperform BAT when foreigners comes back to Bursa i.e. we don't need BAT to get superior returns.
@kevin tam, suggest you read past 200-300 comments :-) BAT didn't fall due to GEG. It fell due to declining EPS, declining DPS the past 8 years, before GEG talks. It's a numbers thing. Price follows EPS and DPS i.e. if both falls, for a business like BAT, its price will fall.
BAT has high dividend yields and that kinda cushion some of the price falls for those who bought in 2020. However, consider that my portfolio (including cash) since 2020 has returned 8% per annum since then. You won't do too badly (maybe small negative total returns including dividends) but consider the opportunity costs, because there are many better stocks out there.
Today, GTRONIC makes +5.81% and brings my total portfolio to new all time high today ... don't need to be stubborn with BAT.
For those who don't read past 200-300 comments, here's a rehash of BAT EPS, DPS since 2015.
Year / EPS / DPS 2015 / 318 sen / 312 sen 2016 / 253 sen / 232 sen 2017 / 173 sen / 169 sen 2018 / 164 sen / 155 sen 2019 / 121 sen / 118 sen 2020 / 85 sen / 83 sen 2021 / 100 sen / 98 sen 2022 / 92 sen / 88 sen
My prediction for 2023: EPS = 67-70 sen (i.e. new all time low EPS, not due to GEG at all but it's poor business characteristics). DPS ~ 66-69 sen (i.e. new all time low DPS, not due to GEG at all but its poor business characteristics).
As for what the government will / will not do with illicit cigarettes - I'm a numbers guy and when the facts show declining EPS and declining DPS ... all the excuses about what government do / don't do doesn't really matter. Next year, its EPS and DPS does not care at all about what the government will do / don't do.
If EPS and DPS continues to decline to new lows, its price will follow to new lows. To me, it's just maths.
GTRONIC +5.81%. Thank-you GTRONIC for helping make my portfolio to reach new all time high again today! This month is a record month - my portfolio made all time high 8 days, each day closed higher than the previous day!
Because I have so many dividend stocks, and a lot of experience on dividend stocks, I learn to distinguish good dividend stocks vs poor dividend stocks.
I give you an example of my loss in ARREIT. This is a classic example of a poor dividend stock. It's no different than BAT. As observatory mentioned, poor dividend stocks always show high dividend yield.
The problem with too high dividend yield is that its price falls much more than the high dividend yield. Dividend yield may be say 8%-10% per annum. On paper looks nice. But hold them long enough, you lose more in price falls. ARREIT is like that to me. I learnt and "cut loss" on BAT 2 months ago to avoid making the same mistake.
How do you distinguish between a good dividend stock vs a poor dividend stock?
Over time, I have learnt many methods. Ironically, the most reliable method is still technical analysis, even though I am a strong business analyst and can analyze balance sheets, Income statements, Annual reports, Quarterly reports and other reports very fast.
I have over 3 decades experience in this line. I made numerous mistakes that cost monies too.
My portfolio has many losses. BAT, ARREIT. Despite those losses, the key is not to throw good money after bad. Instead, invest in good stocks more. Let your winners run. Keep your losses small (by not averaging down on losing stocks). In time, your portfolio will keep making new highs. Good dividend stocks (not to be confused with High dividend stocks) helps me a lot.
I am a dividend investor mostly. I am also a speculative trader, but trade a small portion only.
Majority of my gains come from dividends. Last month, 16 stocks paid me dividends. This month is a low dividend month, so far only 3 paid dividends.
Good dividend stocks perform better than FD and depending, over time, if it grows, can be better than EPF. FD and EPF always make all time highs regularly. My goal is a modest one - to beat FD and EPF by a margin. It also happens, the strategy beats KLCI the past few years, due to KLCI poor price performance.
Personally, I sold off BAT 2 months ago. Since then, my portfolio made all time highs a dozen times. This week, my portfolio made all time highs yesterday, and it made a new higher all time high today. That's because I don't have BAT poor performance to drag my portfolio returns.
If you read my comments in other stocks (click my user handle and read my comments), you'll see that last week, my portfolio made all time highs 4 days. This means in this last 2 week, my portfolio keep making new highs 6 different days already.
A strong part of the reason is because I don't have BAT to drag my portfolio returns down.
@Unfair, it's not about talking down or talking up stocks. Many people talk up BAT for many years, but price keep falling past 8-9 years.
My advise is to ignore the "talk up" or "talk down" - in financial markets, for a large cap stock like BAT - such talk (either up or down) has nil long term impact. It's price fell past 8 years, whether we talk up or talk down.
@observatory, well explained. BAT made new low 9.09 (not positive), but closed above at 9.11. Bulls trying hard not to lose the support short term, but long term downtrend still intact (unfortunately for bulls). When price stays in tight bands for a long time (e.g. several weeks), then, risk and reward increases for next sharp move. Majority odds is to follow the broader trend.
I like GENTING's price action today. I am overweighted near 4.16, 4.12 and 4.07. It has broken the downtrend line established since this year's high early this year, so, cannot complain. However, there's a lot of resistance from here. E.g. next main one around previous swing high near 4.57. I expect many players will be queueing to sell near there, given the chart structure ... some will also queue to sell near 4.50 round number resistance. Plus market has been lacklustre where strong moves like today tend to invite sellers.
Not sure if it can get to 2.10 or 2.18 but if it crosses above this with volume, it can go higher. Will be interesting to see how large a % gain I can get here if I'll let it run this time ... (but depends on price action too).
Nice move today. +5.12%, with nice volume. Majority odds swing low has been printed on 27/10. There's a gap fill near 1.45. Very ambitious and minority odds it'll get there this year with KLCI markets in zig zag mode. But if KLCI can do a strong run for several weeks, then, odds improve. Unfortunately, I didn't manage to get my standard position, the position size is smaller than target, but still nice to see my holdings rise by 5.17% today.
Collected ANNJOO at 1.08, after selling at 1.26 - paid myself a gross dividend of 18 sen :-). Nice price action today. Good price rise, good volume. Looks like majority odds swing low is printed. Now, just ride ...
But honestly, as value investors, when price fell from RM77 down to RM22, that's nearly 70%+ fall ... and would attract attention.
But once we look at EPS fall, or Net Profit fall, it's quite proportional really ... in the old days excluding one-offs, it feels like max Net Profit may have been around RM150 million (?) and now, we are looking at say RM43 million, which is also similar fall i.e. value today is still about the same as value in the old days, except PPE in the old days were smaller and deliver higher earnings?
There is a scenario where this higher PPE would pay off - if Malaysia market needs for dairy exploded - then that spare capacity could be put into production faster than competitors i.e. DLADY in that scenario would have a competitive advantage ... but it begs the question ... what is the catalyst that would push Malaysia market needs for dairy product to rise faster in 2024 that it couldn't do in 2023, given the COVID pandemic, the lock-down are old news already ? 🤔🤔🤔
The Dividend payout ratio is also different ... in the first phase, paying out 100% of its earnings, sometimes more, is done to support dividends. But in the last few years, management no longer able to payout close to 100% because of that massive capital commitment.
The new CEO and the new Chairperson during the 2nd phase recently doesn't do themselves a favor in the annual report to lament about past 3 years milk industry ... especially when the company has committed to a huge capital commitment ... that doesn't project confidence to the market that their massive capital commitment is the right decision ...
I mean ... if management spend so much on capital commitment .. and not yet anywhere near over ... and management and Board complains about market supply demand volatility ... what does it tell you? Will you have confidence in such management, especially when they have been embarking on such huge capital commitment, to kill their dividend policy?
That is very hard for me to consider investing for dividends ... when it's unclear when they'll finish their capital spending ... and not so clear to me yet when their future earnings will start to rise again (ignoring one-offs). But to be honest, I haven't researched enough - all these are just first thoughts and so, comments welcomed ...
Since 2013 to 2019 inclusive, the company's Net Profit ranges from 109 million to 149 million. This is very good profitability relative to assets deployed.
From 2020 onwards, ignoring one time gains spike, this company's earnings has dropped to a paltry 40+ million in 2022. This is coming from huge asset base ... especially that massive capital commitment of - is it like 500 million? - if so, that maths doesn't make financial sense ... and what causes the huge decline?
This is why Mr Market is saying it's 2 different companies - pre 2019 vs post 2019. Is Mr market wrong? 🤔🤔🤔. Because if Mr Market is right ... it's not going to fit my dividend needs ...
Can't help thinking about its long term monthly chart price action since 2000. It feels like 2 different companies. First company in fantastic growth phase from 2000 to 2018. 18 years of nice growth. Second phase from 2018 down to 2023. Massive decline. I also note many of its management team and CEO joins just after the peak. And they look young. And obviously very aggressive ... I wonder how this newer management team compares with the old ones from 2000 to 2018 ... or has there been a change in strategic direction? Whatever it is - price charts say - this is 2 very different company.
I think I'll pass, mainly because its Dividend Yield is too low for me. My priority is at least 4%+ dividend yield. But it's capital commitment is too high still. Likely its Net Cash position will drop to introduce borrowings in the coming year or two? So, it's unlikely to increase dividends. That's for me means an entry now is still a bit too early. I might miss the bottom. That's okay as I already have nearly 50 different stocks.
In comparison to Dutch Lady Malaysia's dairy products, which are derived from cow's milk, plant-based alternatives typically use plant sources such as:
Soy: Soy milk is a popular alternative to cow's milk. It is made by soaking and grinding soybeans and has a similar protein content to cow's milk.
Almond: Almond milk is made by blending almonds with water and straining the mixture. It has a slightly nutty flavor and is often fortified with vitamins and minerals.
Oat: Oat milk is made from soaked oats blended with water and strained. It has a creamy texture and is often favored for its sustainability and creamy consistency.
Coconut: Coconut milk is made from the grated meat of mature coconuts blended with water. It has a rich, creamy texture and a distinct coconut flavor.
Rice: Rice milk is made from milled rice and water. It tends to be thinner and slightly sweeter compared to other plant-based milks.
Cashew: Cashew milk is made by blending cashews with water. It has a creamy texture and a mildly sweet taste.
Plant-based alternatives can also be used to create non-dairy versions of yogurt, cheese, ice cream, and butter. These products are formulated using plant-based ingredients like nuts, seeds, legumes, and grains, mimicking the taste and texture of their dairy counterparts.
In contrast, Dutch Lady Malaysia's products primarily consist of dairy-based offerings such as fresh milk, flavored milk, yogurt, and other dairy derivatives derived from cow's milk.
The choice between Dutch Lady's dairy products and plant-based alternatives typically depends on individual preferences, dietary restrictions, nutritional requirements, and lifestyle choices. Both options offer distinct nutritional profiles and cater to different consumer needs within the broader market.
My personal experience in supermarkets is that honestly - they all look the same to me. I don't gravitate to any one particular brand, as DLady, F&N Dairies, Anlene, Farm Fresh, Emborg all feels the same to me ... after all, it's dairy products ... but I do find myself wondering about other alternatives like there are so many different variety of plant based milk for example ...
My good chat friend tells me this about DLADY's competitors:
As of my last update in January 2022, Dutch Lady faces competition from several major companies in the Malaysian dairy market. Some of the primary competitors of Dutch Lady in Malaysia include:
F&N Dairies: Fraser & Neave Holdings Berhad (F&N) operates in the dairy segment through its subsidiary, F&N Dairies. They offer a range of dairy products, including condensed milk, evaporated milk, and dairy beverages, competing directly with Dutch Lady.
Anlene (Fonterra Brands): Anlene, a brand owned by Fonterra Brands, is known for its products focused on bone health and nutrition. They offer milk-based products targeting consumers concerned about bone strength and overall health.
Farm Fresh: Farm Fresh is a Malaysian dairy company known for its fresh milk products. They have gained popularity for their locally sourced, high-quality fresh milk.
Emborg: Emborg offers a variety of dairy products, including cheeses, butter, and milk. While it's a Danish brand, it competes in the Malaysian market with its range of dairy offerings.
Other Local and International Brands: In addition to these major competitors, there are various local and international brands offering dairy products in Malaysia, competing in segments such as flavored milk, yogurt, cheese, and other dairy-based items.
Competition in the Malaysian dairy market is robust, with companies vying for market share by introducing new products, focusing on product quality, marketing strategies, and addressing consumer demands for health-focused, convenient, and innovative dairy offerings.
Bottom line is I really don't know much about its competitors ...
My gut feel is no rush ... I mean, this stock price has fallen from RM77 down to RM22 over past 5 years. All the while while production capability was much smaller when price is at RM77 ... so, if this pays off, it should hit past RM77 if all else is equal ... but it is extremely unlikely suggesting that inside, something fundamentally may have been broken for such a huge fall ... is it a simple question of over-ambitious expansion? Or a lifetime opportunity for someone with a 10-20 year outlook? That's an extremely long time today in the digital world where alternatives are now sprouting much faster than any time before ...
This company only operates on 1 segment and betting everything in this segment ... high risk in this sense as food is changing ... question is can it grow to double, triple, quadruple demand for its product over the same period, or will it just be white elephant sitting mostly doing nothing under-utilized and not giving returns to shareholders? Or will they ramp up product to increase supplies and lower margins, to trigger competitors to lower prices too and thus reducing their advantages of higher production capabilities over next few years?
Just glanced at the Company's past 2 years annual reports and the last quarterly reports. The thing that strikes me is the rapid depletion of cash - this company balance sheet is healthy but in just one year, its cash balance has dropped from RM105m down to RM61m. Whereas the value of the PPE rise by roughly similar order of magnitude. It's capital commitment is still quite substantial. As at 30/06/23 RM’000 As at 30/06/22 RM’000 Authorised but not contracted for 219,957 ... 218,957 Contracted but not provided for 139,331 ... 232,769
So, 139 million is still much larger than its cash balance, suggesting that this company at some point is going to kill its cash holdings and turn into a net debt company ... I guess Mr Market is afraid this might be another LCTITAN ... previously a beautiful Net Cash company that turned into a massive debt profile with terrible turnaround.
I guess the jury is still out, if this investment is too big or not ... have to sleep over it ..