Note : There are some correction in my calculation after highlighted by B and hence the result is at the opposite site now! ;-)
After my earlier CNAV analysis of SembCorp Industries (U96), it seems to garner quite a fair bit of discussion/comment. One of the key question remain : Are there still CNAV stocks left?
After my earlier CNAV analysis of SembCorp Industries (U96), it seems to garner quite a fair bit of discussion/comment. One of the key question remain : Are there still CNAV stocks left?
I am sure there are, just that it takes time to identify them. One of our active blogger friend, B (from A Path To Forever Financial Freedom) has indicated a potential counter, Hong Kong Land (H78) that possibly fir the CNAV parameters. And he is absolutely right (kudos to him and I think he has done his "homework").
This post is to affirm his view!
Stock In Evaluation : Hong Kong Land (H78)
The Key Quantitative Indicators of CNAV Strategy (basing on 2013 Annual Report figures):
Net Asset Value (NAV) =
Conservative Net Asset Value (CNAV2) =
Current Price = $7.05
Discount For CNAV2 =
Conclusion : Finally, a positive "Discount for CNAV2" counter. Also, it is traded at a 69% discount when compared with the less conservative indicator, NAV. With its negative CNAV2 discount, it is traded at a premium. However, if compared against the less conservative indicator, NAV, it is traded at a discount of 38%.
The P.O.F Scores of CNAV Strategy:
Operational Efficiency = 1 (with three consecutive years of positive operating cash flow)
Financial Efficiency = 1 (Debt To Equity Ratio of 23% only)
Conclusion : A perfect P.O.F Scoring.
Final Conclusion :
Are you vested in Hong Kong Land? What is your take on this stock?
Hi Richard
ReplyDeleteThanks for doing the cnav analysis once again.
Finally, we found one which meets the cnav2 conservative criteria.
HK Land does really look solid and is one of the counter I am monitoring at the moment. I wanted to add them during the turmoil not too long ago but they have rebounded since then.
On a side note, how do you get the NAV of $22.99 for FY2013. Based on the annual report, I think it should be at around $11.41, but maybe it's my mistake ;)
B : OMG! You are right! I've took the wrong number for "Outstanding Shares" and hence the wrong result. My bad. I've since adjusted the calculation and sadly to say that it seems that Hong Kong Land is still not conservative enough from CNAV2 perspective lol
Delete:-)
ReplyDeleteHi Richard,
ReplyDeleteYou are dispatched by HKL, so the deliberate the error. Haha... Just kidding. HKL is a good stock and I had been watching it for awhile.
But do you have the P/B over last 5-10 years? Or where can I get the tool / website to show that?
Hi B, I remember you did that for OUE right? Which tool? Is it free?
Rolf
Hi Rolf, hahaha.. Off hand I do not have the information that you are looking for, but I believed you can get it from their IR (Investor Relation) page. ;-)
DeleteHi Richard, thanks. Know about IR but not sure they provide such info. Anyway thanks. Please continue to CNAV.... :-)
DeleteRolf : sure!
Deletesorry if I am too direct
ReplyDeletehave you ever see the stock price of HKL before?
It currently trades at around $7 (in usd)
most investors one glance at the $22 nav confirm know something not right already
maybe in future you should just stick to stocks that you are familiar with instead, less chance of such a major error
Hi Felix, thanks for dropping by. Nope, never invest in HKL before.
DeleteI guess everyone make mistake (but maybe not you), at least I correct my mistake openly ;-)
Oh btw, this is not meant to make any investment decision, it is just a post to response to my peer bloggers' request.
Hi Richard, thanks for doing the CNAV analysis.
ReplyDeleteI was double checking my CNAV working against yours, and there were differences.
I computed an NAV per share of $11.43 (USD) and CNAV2 value per share of U$8.30.
May i ask how did you arrive at your figure ?
Apologies, my CNAV2 value should U$9.60. Calculation error
ReplyDeleteKH : Thanks for dropping by and comment.
DeleteWill retrieve my working and come back to you again.
Merry X'mas and Happy New Year to you!