High debt doesnt mean not worth for buying, look at UEMworld, uembldr, mrcb, all these high debt stocks rock like nobody biz ! why ? Maemode also having high gearing, does it mean she is no good also ?Most of its debtors r from player like Macdonald, nike, KFC, coca cola.. not safe enuf ? lionind n liondiv, they used to be high debt stock also, see what they r now ? This is all about "calculated risk " ! if u cant take d calculated risk, then forget about share investment^V^ No way u can find stocks with High ROE, high NTA, good cash flow, low pe, debt free n good management in BULL MKT ! can u ? u can only find d above in bear mkt ^V^
As long as its gearing is still manageable, Low PE + good future n sustainable earning is always my cup of tea ^V^ Of course nothing is certain in this world, based on my adopted method, i can safely say, my success rate is more than 80% n it is proven workable !
Now is yr turn to tell me if Swee Joo's debt too high n not manageable ?
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Anonymous said...
hi samgang,
i was just wondering though, you have good insight on the company's pe and earnings / revenue / profit. but as you put last time around, low PE does not mean profitable, good ctr. there are quite other things that we have to look at. as probably shown by megan, who's under immense selling pressure now... as well as some other counters..
however, i notice that your call on ranhill, has not include the company's debt, which is as far as my limited knowledge tell me, is important in FA. the group's total borrowing amassing almost rm4billion, which is to me, quite a significant amount...
can you please explain the relevance of this debt towards your analysis?
thanks!
-slowday
May 23, 2007 11:25 AM
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1 comment:
thanks for the reply sam, that is entirely true, hard enough to find a counter with the criteria that you mentioned in the market, let alone in a bull market
however... there is still one problem with the debt XD...
by end of year 2005, Ranhill recorded a total debt of ~3bil RM, and by end of year 2006, it went up by a whopping ~1bil RM to around ~RM4bil.. surely this can be seen as a worrying sign?
now i know risk is essential in stock market, but at the very least it is important to investigate a counter, through and through before jumping to make a call? dont get me wrong, i follow your calls closely, making decent profit out of them (ranhill is just one of the counter that i bought upon seeing the movement), but i am still learning, and thus would ever be so grateful if you can enlighten me on this one.
thanks.
regards,
slowday
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