Saturday, June 6, 2015

King Wan - My CNAV Analysis (Take 2)

About a year ago, I vested in King Wan (554) and did a CNAV Analysis (after attending the Value Investing Mastery Course by BigFatPurse), click here for my earlier post. 

Today, I am doing a Take 2 on King Wan's latest CNAV Analysis to review what has changed after one year. In fact, it is due to the following event lar:

1. King Wan's dropped a whopping 12.5% on Tuesday (2nd June 2015)
2. As recommended by one of the pioneer peer financial blogger (Createwalth8888

The Key Quantitative Indicators of CNAV Strategy (2015 - Basing on the latest Financial Report released on 29th May 2015):

Net Asset Value (NAV)                             = $0.2811
Conservative Net Asset Value (CNAV2)  = $0.14
Current Price                                              = $0.28
Discount For CNAV2                                = -98%

Conclusion : Since it is a negative "Discount for CNAV2", it means that the stock is traded at premium. Having said that, it is almost level with the less conservative NAV indicator. 
The P.O.F Scores of CNAV Strategy: 
Profitability Score         = 1 (With the PE ratio of 5.7, slightly over than the average of 15)

Operational Efficiency = 1 (with three consecutive years of positive operating cashflow)

Financial Efficiency     = 1 (Debt To Equity Ratio of 56%)

Conclusion : A perfect POF indicators.
In short, King Wan has improved its attractiveness from CNAV perspective. Hence, it warrants to be in the watch-list for those who are practicing CNAV2 strategy. 

For better comparison, I've copy and paste my previous CNAV Analysis here :

The Key Quantitative Indicators of CNAV Strategy (2014):

Net Asset Value (NAV)                             = $0.25
Conservative Net Asset Value (CNAV2)  = $0.07
Current Price                                              = $0.35
Discount For CNAV2                                = -398%

Conclusion : Since it is a negative "Discount for CNAV2", it means that the stock is traded at premium. In fact, it is already traded at a premium (40% higher) even compared with the less conservative indicator, NAV. So, if basing on the CNAV strategy, this stock would only be in my watch-list (i.e. not a "buy" signal).
The P.O.F Scores of CNAV Strategy: 
Profitability Score         = 0 (With the PE ratio of 18.1, slightly over than the average of 15)

Operational Efficiency = 1 (with three consecutive years of positive operating cashflow)

Financial Efficiency     = 1 (Debt To Equity Ratio of 56%)

Conclusion : Even with the score of 2 (out of 3) but since the PE Ratio is only slightly over the average, I will still consider it a good set of POF indicators.
In short, if I were to apply the CNAV strategy on this stock, I would not buy it NOW but will keep it in my watch-list until it has a positive discount for CNAV2.  

Cheers!

11 comments:

  1. Hi Richard

    Alamak, it's still a far away from the CNAV2. Jialut :(

    ReplyDelete
    Replies
    1. B : let's keep calm and keep going! Wahahaha

      Delete
  2. Replies
    1. Cw8888 : of course, I am in it for the long term remember? lol

      Delete
    2. Agreed! For super long term retail investors, any method is irrelevant. We just need the Mind and Money.

      Less analyzing. More Investing - CW8888

      LOL!

      Delete
    3. CW8888 : Indeed! Cool motto : Less Analyzing ; More Investing. I like it lol

      Delete
  3. Hi Ricard,

    How do you calculate CNAV2? Thanks in advance.

    ReplyDelete
    Replies
    1. I am using a spreadsheet from Big Fat Purse's Value Investing Mastery Course ;-)

      Delete
    2. Is it downloadable or I need to attend the course first? :)

      Delete
    3. It is not downloadable online, they will provide you when attending the course and explaining to you on how to calculate them... It's a course worth attending for if you are new to stock investment

      Delete
    4. I read from their blog the diff between CNAV1 and CNAV2. They only have sample for CNAV1 but I don't invest in properties. Just curious which one to discount for non-property stocks.

      Delete

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