By Sabri Jalil
This is an additional info on AIG (please refer to previous article)
AIG yesterday closed higher to $0.50 from $0.46…it was gain $0.04 amid DJI down 88.87 points.
I found that AIG’s outstanding shares is 2.69b and its net asset value is $71.2b. By dividing $71.2b with 2.69b shares, net asset value per share is equal to $26.47. Net asset value per share actually is an actual value of share per share.
Now we compare market price (or market value) to actual value per share, it is 53 times cheaper.
When market price lower than actual price…is it an investment opportunity?
Thursday, February 26, 2009
AIG Last Night Trading
By Sabri Jalil
AIG, world giant insurance company, has closed at $0.50 in New York Stock Exchange yesterday, gain $0.04. amid DJI down 88.81 points. Following from the previous article, AIG outstanding shares is 2.69b units and it net assets is $71
Resort World Upgraded Despite Made Loss
At least two research houses have upgraded their rating on Resorts World Bhd (4715), the casino operator that reported a fourth-quarter loss on Wednesday.
JPMorgan raised the stock to "overweight" from "neutral", saying the company's casino will benefit as Malaysians reduce overseas travel in the current recession.OSK Research also upgraded it to a "trading buy" but maintained its target price of RM2.50.The shares fell two sen or 0.9 per cent to a three-week low of RM2.22, a day after the company reported a fourth-quarter loss of RM387.8 million compared with a net profit of RM344 million in the same quarter a year ago.
This was mainly due to a RM781.5 million impairment loss that reflected a big drop in the market value of Star Cruises Ltd, in which it has a 19.6 per cent stake.If not for the impairment loss, its net profit would have increased by 14 per cent as its underlying leisure and hospitality business remained strong.
Citigroup, which kept its buy/low-risk call on Resorts, said the results were boosted by higher casino patronage, better luck factor in the premium player business and higher volume of business recorded.
Credit Suisse, however, held on to its "underperform" rating on Resorts on expectations of a 5 per cent drop in leisure revenues this year due to "normalised luck" and weaker economic conditions.It expects the first quarter, however, to be good as it encompasses the Chinese New Year, which is a typically strong season for Resorts.
The foreign research house cut its target price to RM1.65 from RM1.80 before.Analysts, in their reports yesterday, said they remained wary of potential future related-party transactions that could take place.This, they said, may not not sit well with investors of Resorts, which has a 33 per cent foreign shareholding.
They noted that a controversial related-party transaction announced in late November - in which Resorts bought a 10 per cent stake in US gaming patent company Walker Digital Gaming (WDG) for US$69 million (RM253 million) - had a negative impact on Resorts' shares. The deal was completed by mid-December as it didn't require shareholder of regulatory approval.(Tan Sri Lim Kok Thay, a major shareholder of Genting Bhd which in turn owns Resorts, was also a director in WDG.)
Analysts noted that there is an outstanding option for Resorts to acquire a lottery patent company, Walker Digital Lottery, from the Lim family for US$27 million (RM99 million) within 18 months of the first transaction.
Note : This article quoted from http://www.btimes.com.my/ dated 27 Feb 2009
JPMorgan raised the stock to "overweight" from "neutral", saying the company's casino will benefit as Malaysians reduce overseas travel in the current recession.OSK Research also upgraded it to a "trading buy" but maintained its target price of RM2.50.The shares fell two sen or 0.9 per cent to a three-week low of RM2.22, a day after the company reported a fourth-quarter loss of RM387.8 million compared with a net profit of RM344 million in the same quarter a year ago.
This was mainly due to a RM781.5 million impairment loss that reflected a big drop in the market value of Star Cruises Ltd, in which it has a 19.6 per cent stake.If not for the impairment loss, its net profit would have increased by 14 per cent as its underlying leisure and hospitality business remained strong.
Citigroup, which kept its buy/low-risk call on Resorts, said the results were boosted by higher casino patronage, better luck factor in the premium player business and higher volume of business recorded.
Credit Suisse, however, held on to its "underperform" rating on Resorts on expectations of a 5 per cent drop in leisure revenues this year due to "normalised luck" and weaker economic conditions.It expects the first quarter, however, to be good as it encompasses the Chinese New Year, which is a typically strong season for Resorts.
The foreign research house cut its target price to RM1.65 from RM1.80 before.Analysts, in their reports yesterday, said they remained wary of potential future related-party transactions that could take place.This, they said, may not not sit well with investors of Resorts, which has a 33 per cent foreign shareholding.
They noted that a controversial related-party transaction announced in late November - in which Resorts bought a 10 per cent stake in US gaming patent company Walker Digital Gaming (WDG) for US$69 million (RM253 million) - had a negative impact on Resorts' shares. The deal was completed by mid-December as it didn't require shareholder of regulatory approval.(Tan Sri Lim Kok Thay, a major shareholder of Genting Bhd which in turn owns Resorts, was also a director in WDG.)
Analysts noted that there is an outstanding option for Resorts to acquire a lottery patent company, Walker Digital Lottery, from the Lim family for US$27 million (RM99 million) within 18 months of the first transaction.
Note : This article quoted from http://www.btimes.com.my/ dated 27 Feb 2009
AIG...how cheap it is?
By Sabri Jalil
Still remember AIG? One of the biggest insurance company in this planet.
The price has dropped drastically in tandem with stock market crash late last year. The highest price of AIG for period of 52 weeks (from 27 Feb 2008 – 24 Feb 2009) was $52.25 and it has dropped to the lowest $0.38. As of New York Stock Exchange closed yesterday (25 Feb 2009) it closed at $0.46. Can you calculate how many percent it dropped?
Still you remember? AIG has got the support from US government in form of capital injection amounting $85b. It is a part of emergency loan programme to avoid the giant companies in US to be dissolved. The bailout has made US government to have 79.9% stake in AIG. In other word, AIG now is a government supported public listed company.
Will US government let the AIG’s business down after injecting billions dollars?
I believe that, the answer is “NO”
I also believe that, since the highest price was $52.25 and AIG has turned into the government backed company, the price will rebound far when the economy in US and rest of the world recovered.
If you managed to buy at $0.46 today, don’t target the selling price at previous highest price.. it is looks greedy, just target the price at $10.00….still too high?...so what about $5.00..then imagine how much will you gain? By the way if investors intend to set at higher price, it is up to them. It also a good decision because AIG is a long term investment.
Getting more opinion on AIG? Please call me at 6013-7233600 or 607-3333600.
Sabri Jalil
Kenanga Investment Bank
Level 2, Menara Pelangi
Taman Pelangi, Johor Bahru
Johor, Malaysia
Tuesday, February 24, 2009
TM will pay 30% dividend soon
Telekom Malaysia Berhad (TM) has made an announcement that it will receive debt repayment from TMI as much as RM4.03b. Out of that amount RM3.51b to be returned to the shareholders.
TM has also agreed to allocate RM382m as final dividend for shareholders.
Outstanding shares of TM are 3.5 billion unit.
It is mean that every share will receive 98 sen capital repayment and 11 sen final dividend. Total amount shareholders will receive is RM1.09 and it is equal to 30.1% based on current price which stand at RM3.56 when this statement is being written.
It is good investment….and still can buy at that price.
And TM is still being rated as “AAA” by local rating agency and “A”. This rating mean low risk investment.
TM has also agreed to allocate RM382m as final dividend for shareholders.
Outstanding shares of TM are 3.5 billion unit.
It is mean that every share will receive 98 sen capital repayment and 11 sen final dividend. Total amount shareholders will receive is RM1.09 and it is equal to 30.1% based on current price which stand at RM3.56 when this statement is being written.
It is good investment….and still can buy at that price.
And TM is still being rated as “AAA” by local rating agency and “A”. This rating mean low risk investment.
Sabri Jalil
Monday, February 23, 2009
The Ups And Downs Of Investing In Cyclical Stocks
The Ups And Downs Of Investing In Cyclical Stocks
by Ben McClure, Contributor - Investopedia Advisor (Contact Author Biography)
Imagine being on a Ferris wheel: one minute you're on top of the world, the next you're at the bottom - and eager to head back up again. Investing in cyclical companies is much the same, except the the time it takes to go up and down, known as a business cycle, can last years.
What Are Cyclical Stocks?
Identifying these companies is fairly straightforward. They often exist along industry lines. Automobile manufacturers, airlines, furniture, steel, paper, heavy machinery, hotels and expensive restaurants are the best examples. Profits and share prices of cyclical companies tend to follow the up and downs of the economy; that's why they are called cyclicals. When the economy booms, as it did in the go-go '90s, sales of things like cars, plane tickets and fine wines tend to thrive. On the other hand, cyclicals are prone to suffer in economic downturns. (For more on the business cycle, see Recession: What Does It Mean To Investors?)
Given the up-and-down nature of the economy and, consequently, that of cyclical stocks, successful cyclical investing requires careful timing. It is possible to make a lot of money if you time your way into these stocks at the bottom of a down cycle just ahead of an upturn. But investors can also lose substantial amounts if they buy at the wrong point in the cycle.
Comparing Cyclicals to Growth Stocks
All companies do better when the economy is growing, but good growth companies, even in the worst trading conditions, still manage to turn in increased earnings per share year after year. In a downturn, growth for these companies may be slower than their long-term average, but it will still be an enduring feature.
Cyclicals, by contrast, respond more violently than growth stocks to economic changes. They can suffer mammoth losses during severe recessions and can have a hard time surviving until the next boom. But, when things do start to change for the better, dramatic swings from losses to profits can often far surpass expectations. Performance can even outpace growth stocks by a wide margin.
Investing in Cyclicals
So, when does it pay to buy them? Predicting an upswing can be awfully difficult, especially since many cyclical stocks start doing well many months before the economy comes out of a recession. Buying requires research and courage. On top of that, investors must get their timing perfect.
Investment guru Jim Slater offers investors some help. He studied how cyclical industries fared against key economic variables over a 15-year period. Data showed that falling interest rates are a key factor behind cyclicals' most successful years. Since falling rates normally stimulate the economy, cyclical stocks fare best when interest rates are falling. Conversely, in times of rising interest rates, cyclical stocks fare poorly. But Slater warns us to be careful: the first year of falling interest rates is also unlikely to be the right time to buy. He advises that it's best to buy in the last year of falling interest rates, just before they begin to rise again. This is when cyclicals tend to outperform growth stocks.
Before selecting a cyclical stock, it makes sense to pick an industry that is due for a bounce. In that industry, choose companies that look especially attractive. The biggest companies are often the safest. Smaller companies carry more risk, but they can also produce the most impressive returns.
Many investors look for companies with low P/E multiples, but for investing in cyclical stocks this strategy may not work well. Earnings of cyclical stocks fluctuate too much to make P/E a meaningful measure; moreover, cyclicals with low P/E multiples can frequently turn out to be a dangerous investment. A high P/E normally marks the bottom of the cycle, whereas a low multiple often signals the end of an upturn.
For investing in cyclicals, price-to-book multiples are better to use than the P/E. Prices at a discount to the book value offer an encouraging sign of future recovery. But when recovery is already well underway, these stocks typically fetch several times the book value. For instance, at the peak of a cycle, semiconductor manufacturers trade at three or four times book value.
Correct investment timing differs among cyclical sectors. Petrochemicals, cement, pulp and paper, and the like tend to move higher first. Once the recovery looks more certain, cyclical technology stocks, like semiconductors, normally follow. Tagging along near the end of the cycle are usually consumer companies, such as clothing stores, auto makers and airlines.
Insider buying, arguably, offers the strongest signal to buy. If a company is at the bottom of its cycle, directors and senior management will, by purchasing stock, demonstrate their confidence in the company fully recovering. (For more on how to research insider activity, see Keeping An Eye On The Activities Of Insiders And Institutions.)
Finally, keep a close eye on the company's balance sheet. A strong cash position can be very important, especially for investors who buy recovery stocks at the very bottom, where economic conditions are still poor. The company having plenty of cash gives these investors more time to confirm whether their strategy wisdom was a wise one.
Conclusion
Don't rely on cyclicals for long-term gains. If the economic outlook seems bleak, investors should be ready to unload cyclicals before these stocks tumble and end up back where they started. Investors stuck with cyclicals during a recession might have to wait five, 10 or even 15 years before these stocks return to the value they once had. Cyclicals make lousy buy-and-hold investments.
by Ben McClure, (Contact Author Biography)Ben is director of McClure & Co., an independent research and consulting firm that specializes in investment analysis and intelligence. Before founding McClure & Co., Ben was a highly-rated European equities analyst at City of London-based Old Mutual Securities.
** This article and more are available at Investopedia.com - Your Source for Investing Education
by Ben McClure, Contributor - Investopedia Advisor (Contact Author Biography)
Imagine being on a Ferris wheel: one minute you're on top of the world, the next you're at the bottom - and eager to head back up again. Investing in cyclical companies is much the same, except the the time it takes to go up and down, known as a business cycle, can last years.
What Are Cyclical Stocks?
Identifying these companies is fairly straightforward. They often exist along industry lines. Automobile manufacturers, airlines, furniture, steel, paper, heavy machinery, hotels and expensive restaurants are the best examples. Profits and share prices of cyclical companies tend to follow the up and downs of the economy; that's why they are called cyclicals. When the economy booms, as it did in the go-go '90s, sales of things like cars, plane tickets and fine wines tend to thrive. On the other hand, cyclicals are prone to suffer in economic downturns. (For more on the business cycle, see Recession: What Does It Mean To Investors?)
Given the up-and-down nature of the economy and, consequently, that of cyclical stocks, successful cyclical investing requires careful timing. It is possible to make a lot of money if you time your way into these stocks at the bottom of a down cycle just ahead of an upturn. But investors can also lose substantial amounts if they buy at the wrong point in the cycle.
Comparing Cyclicals to Growth Stocks
All companies do better when the economy is growing, but good growth companies, even in the worst trading conditions, still manage to turn in increased earnings per share year after year. In a downturn, growth for these companies may be slower than their long-term average, but it will still be an enduring feature.
Cyclicals, by contrast, respond more violently than growth stocks to economic changes. They can suffer mammoth losses during severe recessions and can have a hard time surviving until the next boom. But, when things do start to change for the better, dramatic swings from losses to profits can often far surpass expectations. Performance can even outpace growth stocks by a wide margin.
Investing in Cyclicals
So, when does it pay to buy them? Predicting an upswing can be awfully difficult, especially since many cyclical stocks start doing well many months before the economy comes out of a recession. Buying requires research and courage. On top of that, investors must get their timing perfect.
Investment guru Jim Slater offers investors some help. He studied how cyclical industries fared against key economic variables over a 15-year period. Data showed that falling interest rates are a key factor behind cyclicals' most successful years. Since falling rates normally stimulate the economy, cyclical stocks fare best when interest rates are falling. Conversely, in times of rising interest rates, cyclical stocks fare poorly. But Slater warns us to be careful: the first year of falling interest rates is also unlikely to be the right time to buy. He advises that it's best to buy in the last year of falling interest rates, just before they begin to rise again. This is when cyclicals tend to outperform growth stocks.
Before selecting a cyclical stock, it makes sense to pick an industry that is due for a bounce. In that industry, choose companies that look especially attractive. The biggest companies are often the safest. Smaller companies carry more risk, but they can also produce the most impressive returns.
Many investors look for companies with low P/E multiples, but for investing in cyclical stocks this strategy may not work well. Earnings of cyclical stocks fluctuate too much to make P/E a meaningful measure; moreover, cyclicals with low P/E multiples can frequently turn out to be a dangerous investment. A high P/E normally marks the bottom of the cycle, whereas a low multiple often signals the end of an upturn.
For investing in cyclicals, price-to-book multiples are better to use than the P/E. Prices at a discount to the book value offer an encouraging sign of future recovery. But when recovery is already well underway, these stocks typically fetch several times the book value. For instance, at the peak of a cycle, semiconductor manufacturers trade at three or four times book value.
Correct investment timing differs among cyclical sectors. Petrochemicals, cement, pulp and paper, and the like tend to move higher first. Once the recovery looks more certain, cyclical technology stocks, like semiconductors, normally follow. Tagging along near the end of the cycle are usually consumer companies, such as clothing stores, auto makers and airlines.
Insider buying, arguably, offers the strongest signal to buy. If a company is at the bottom of its cycle, directors and senior management will, by purchasing stock, demonstrate their confidence in the company fully recovering. (For more on how to research insider activity, see Keeping An Eye On The Activities Of Insiders And Institutions.)
Finally, keep a close eye on the company's balance sheet. A strong cash position can be very important, especially for investors who buy recovery stocks at the very bottom, where economic conditions are still poor. The company having plenty of cash gives these investors more time to confirm whether their strategy wisdom was a wise one.
Conclusion
Don't rely on cyclicals for long-term gains. If the economic outlook seems bleak, investors should be ready to unload cyclicals before these stocks tumble and end up back where they started. Investors stuck with cyclicals during a recession might have to wait five, 10 or even 15 years before these stocks return to the value they once had. Cyclicals make lousy buy-and-hold investments.
by Ben McClure, (Contact Author Biography)Ben is director of McClure & Co., an independent research and consulting firm that specializes in investment analysis and intelligence. Before founding McClure & Co., Ben was a highly-rated European equities analyst at City of London-based Old Mutual Securities.
** This article and more are available at Investopedia.com - Your Source for Investing Education
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