How to Use Stock Intrinsic Value Calculator

Guide on "How to calculate Stock Intrinsic Value"
[Download the Stock Intrinsic Value Calculator]

Below is how it looks like:

We will be teaching you how to utilize this Free Calculator to grab Undervalued Stocks!
(Discounted Cash Flow Method)

1. Key in Stock name & symbol
2. Enter the Operating Cash Flow [This figure signifies the Free Cash Flow (FCF) for the company. You can obtain this figure from the Annual Report: Take the "Operating Cash Flow" minus "Capital Expenditure (usually used to purchase fixed assets)]

You can see below pictures for example...

3. Cash flow growth rate is a bit troublesome... You need to obtain the FCF for every last 5 years and determine the average growth rate.

4. Shares outstanding - Many people do not know how to go get this number. Above is one picture on how to easily retrieve it.. Just Ctrl + F and search for shares outstanding in the Annual Report.. and there it is!

5. Last but not least, the discount rate is usually set at the 3 months US Treasury rate in the past. However, It can be adjusted to how much return do you wish to obtain from this investment. E.g. If you wish to get 10% return annually from the stock, just enter "10" inside the box! Simple as that!

Things to Note:

If you are looking to purchase an undervalued stock, learn from warren buffett. Pick a company with Strong Fundamentals and purchase it at a margin of safety of 50% below the Intrinsic Value you just calculated! Profits behold!

Hope you like this guide on "How to Use Stock Intrinsic Value Calculator" & May you make lots lots $$$! Kindly Like my page at http://www.facebook.com/pages/KissInvesting.. Thanks!


Warren Buffet Investment Portfolio

Retailing at Popular at $40+!
Just went to the Popular to purchase envelopes for my morethaniphone.com online business, and saw that this book is one of the Top 10 in non-fiction books!

And it's selling for $40+.. Omgggg! So expensive...

I want to take a look inside but it was 
sealed up.. So i took a detour and went to Amazon while its only selling at US$13.48!

We investors need to learn how to save before we can invest :D

Anyway, i saw this post which is quite interesting and an easy-to-read book too. 


Here are the collection of quotes from Warren Buffett:

  • Aim High But Don't Over-Reach - "I don't try to jump over 7-foot bars; I look for 1-foot bars that I can step over"

  • Aim Well - "To swim a fast 100 metres, it's better to swim with the tide than to work on your stroke"

  • Focus On Your Goals - "I've often felt there might be more to be gained by studying business failures than business successes"

  • Be Honest - "It takes 20years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently"

  • Believe In Yourself - "In the end, I always believe my eyes rather than anything else"

  • Have A Philosophy - "Rule No.1 : Never lose money. Rule No.2 : Never forget Rule No.1"

  • Ignore Mr. Market's Moods
    • "The market is there as a reference point to see if anybody is offering to do anything foolish. When we invest in stocks, we invest in businesses"
    • "(John Maynard) Keynes essentially said, don't try and figure out what the market is doing. Figure out a business you understand, and concentrate"
    • "The future is never clear; you pay a very high price in the stock market for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values"

  • Know The Difference Between Price and Value - "Price is what you pay. Value is what you get"

  • Seek Intrinsic Value
    • "There is no formula to figure (intrinsic value) out. You have to know the business (whose stock you are considering buying)" 
    • "It doesn't have to be rock bottom to buy it. It has to be selling for less than what you think the value of the business is, and it has to be run by honest and able people"

  • Expect To Be Out of Step - "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well"

  • Earnings - "If the business does well, the stock eventually follows"

  • Look Forward, Not Back - "Of course, the investor of today does not profit from yesterday's growth"

  • Avoid Risk - "I put heavy weight on certainty... if you do that, the whole idea of a risk factor doesn't make any sense to me"

  • Don't Gamble - "The propensity to gamble is always increased by a large prize versus a small entry fee, no matter how poor the true odds may be"

  • Watch For Unusual Circumstances - "Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised"

  • Avoid Excessive Debts - "You will someday hit a pothole"

  • Be Patient - "You do things when the opportunities come along"

  • Think For Yourself - "Forecasters usually tell us more of the forecaster than of the future"

  • Be Wary of Wall Street - "Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway"

  • Only Buy Securities that You Understand
    • "Investment must be rational; if you can't understand it, don't do it" 
    • "When you combine ignorance and borrowed money, the consequences can get interesting.

  • How To Determine the Value of Business - "I read annual reports of the company I'm looking at and read annual reports of the competitors -- that is the main source of material"

  • Keep It Simple
    • "If you have to go through too much investigation, something is wrong" 
    • "All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies"
  • Think Big - "I can't be involved in 50 or 70 things. That's a Noah's Ark way of investing -- you end up with a zoo that way. I like to put meaningful amounts of money in a few things"

  • Don't Sweat the Maths - "Read Ben Graham and Phil Fischer, read annual reports, but don't do equations with Greek letters in them"

  • Seek Excellent Companies - "You should invest in a business that even a fool can run, because someday a fool will"

  • Diversification - "Diversification is a protection against ignorance. It makes very little sense for those who know what they are doing"

  • Invest for the Long Term - "My favourite time frame for holding a stock is forever"

  • To Sum Up - "Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with managers of the highest integrity and ability. Then you own those shares forever"

    Hope you like my regular posts and i would appreciate if you can just take a short time to "Like" my facebook page here!

  • 26.4.12

    Don Buy GPH now!!!

    Don't try to catch the IPO of GPH!

    Here's why:

    With the BULK speculators selling at $0.30, its a wise choice to sell it at 0.295 (if you are lucky to get some from the IPO).

    I woke up in the morning to check on GPH, but i didn't get any.. Refunded all back to me.. Nevertheless, i have turned my attention to Informatics... The next Penny Stock that looks like JEL Corp to me :D


    Stock Market Outlook Going Forward...

    If you take a look at these 2 links, read the newspapers about huge capital outflow from BIG funds and coupled with the "Sell in May and go Away" phrase...



    You can jolly well be right to sell away all your holdings now and keep an eye on when you can enter again after the correction has happened.

    Another thing to note is the picture below:

    Practically all of them (except GoldenAgr) are Penny Stocks worth less than $0.50!!!

    The Penny Stock Craze is here but i believe the hike may be ending soon when the entire market shifts direction to the downside. Furthermore, the thing about Penny Stocks is that it is easy to get in but hard to get out especially once the selling comes so quickly!


    As for me, i am taking a whole different way of "playing" the market now... through IPOs... If you take a look at those IPOs which have generated significant interest through various media (such that many people can see and hear this IPO coming); their opening prices on the very 1st Day will have made you lotsa moolah!!! MOOOOO....


    IPO-mania: Starland, Global Premium Hotels Launch Singapore IPOs

    Got this article from Bizdaily and find that many A property developer and a hotel operator launched separate initial public offerings (IPOs) Thursday, both looking to tap into the recovering equities market in Singapore.

    Singaporean property developer Starland Holdings Limited priced its IPO at S$0.22 per share that will help the firm raise S$4.9 million. Starland will list 22.2 million new shares in the Catalist board of
    Singapore Exchange, which represents about 15.3 per cent of its post-placement share capital of 144,733,000 shares. At the IPO price of S$0.22, it is priced at a historical price to
    earnings ratio of approximately 14.2 times. The placement price also represents a discount of approximately 47.9 per cent over the adjusted NAV (net asset value) per share.

    Starland plans to use the net proceeds of approximately S$3.1 million to acquire and build up its landbank for future development as well as for general working capital. The group develops properties in China, particularly in the province of Chongqing. Starland said the demand for homes there is growing at a steady pace, especially from first time buyers and upgraders due to a rapid urbanisation rate.

    Chongqing is one of China’s fastest growing economies. From 2004 to 2010, Chongqing's GDP output grew at a compounded rate of 17.3 per cent annually. Its per capita disposable income grew at a CAGR of 12.9 per cent, and foreign direct investments grew at a CAGR of 58.5 per cent.

    Starland believes that it is timely for investors to participate in its IPO, as they are coming into the group at the start of its growth path. “With the IPO, Starland will also be able to leverage on the status as a public listed company to help boost its brand in China, which will help us facilitate business needs such as acquiring more land,” it said in a statement.

    For the financial year ending 30 September 2011, Starland’s revenue reached RMB77.7 million (S$15.36 million) with a net profit of RMB9.3 million. In terms of financial position as at 30 September 2011, the group’s cash and bank balances stood at RMB11.7 million, with zero gearing. The valuation of the group’s land bank for future developments is 3.8 times the cost of the land, which amounted to RMB339.1 million
    compared to the land cost of RMB87.5 million. Starland’s placement will close at 12.00 noon on 25 April 2012 and trading of shares is expected to commence on April 27. PrimePartners Corporate Finance is the manager, sponsor and placement agent of the IPO.

    Meanwhile, Global Premium Hotels Limited (GPH), the hotel and hospitality unit of Fragrance Group, priced its 450 million new shares at S$0.26 apiece, with an over-allotment option of 67.5 million shares.
    GPH wants to raise S$117.0 million from its IPO to fund the acquisition of Fragrance Group's hotel portfolio. Fragrance will retain majority ownership of GPH.

    The group said it is confident Singapore's integrated resorts and more frequent flights by budget carriers into the country will support its expansion plans. "This IPO or restructuring exercise will streamline the group's portfolio – one will be property development and the other, hotel development and operations,” said Eddie Lim Chee Chong, CEO of Global Premium Hotels Limited. "This will give investors a clear choice of what they want to invest in – the hospitality industry or another  property counter. With this, we are able to focus on both businesses – property development, and hotel development and operations,” he added.

    The group owns 22 economy and mid-tier hotels in Singapore worth over S$747.5 million. GPH’s public offer will close on April 24 and is expected to begin trading on April 26. OCBC is the issue manager,  underwriter and placement agent of the IPO.

    Starland and Global Premium Hotels’ offerings will be the fourth and fifth IPOs in Singapore so far this year after the listings of blood bank group Cordlife, palm oil firm Bumitama and engineering firm Civmec. Some other groups have been tipped to launch IPOs in Singapore. The list includes English football champions Manchester United, India’s Reliance Communications, Finnish equipment group Cargotec and motor racing group Formula One.


    I think that the IPO markets now are ripe for playing... With the "Sell in May" Syndrome coming.. IPOs may be a quick way of how people will utilise their cash holdings to earn quick bucks... And thats what i am doing to do as well!


    InvestFair 2012 - Find out from the Experts...

    Wooo.. i went down to the Investfair with my girlfriend last weekend.. in order to hear from what the Experts have to say about how the economy is faring and how to profit from it :D

    Learnt quite a few things and even applied for another Brokerage account with http://limtan.com.sg/! They have a similar web platform as Poems.com.sg and the unique thing about them is that we can obtain linkpoints just by trading online! This on-going promotion is quite worth it i guess..

    I also went to the Adam Khoo's talk.. where he share with us a few criteria of picking Winning Stocks and where the market is currently heading now.. (sounds interesting leh...)

    Just like to share with you this picture i got from his website (www.adamkhoowealth.com) and you can make a guess on what point of the market cycle we are in now =)


    KunLun Energy Co. Ltd

    Saw this company (Kunlun Energy Co. Ltd) on the news a few days ago and got curious about it...

    I have done some research on the firm and found out that it is actually quite a Fundamentally Sound company, being the Biggest Gas Company in China!

    Let's direct you to the 3 main articles i have seen and what we got there:

    1) http://www.reuters.com/article/2012/03/29/idUSL3E8ES66Z20120329
    Hong Kong-listed Kunlun Energy, headed by a vice president of PetroChina, has become a leading player in the sector. It builds gas liquefaction plants, operates LNG receiving terminals, trucks the fuel and builds LNG filling stations.

    The booming trucked LNG business is now targetting the country's tens of thousands of trucks, city buses, river fleets and fishing boats as the next users, aiming for an ambitious 10 percent of China's transportation diesel market by 2015.

    2) http://www.businessweek.com/news/2012-04-02/kunlun-energy-seeks-about-1-dot-4-billion-in-share-sale
    Kunlun Energy Co. (135), a Chinese gas supplier controlled by PetroChina Co. (857), is seeking about $1.4 billion in a stock offering to accelerate its liquefied-natural gas expansion.

    Last week, Kunlun posted full-year sales of HK$25.4 billion and net income of HK$5.61 billion. Profit exceeded the average estimate of HK$4.85 billion from a Bloomberg News survey of eight analysts.

    3) http://www.ft.com/cms/s/0/39d82ca6-7d47-11e1-a676-00144feab49a.html#axzz1rG0pSlma
    Richard Ong’s RRJ Capital and Temasek, Singapore’s state investment agency, are investing about $600m to anchor Kunlun Energy’s $1.35bn capital raising, two people familiar with the deal said. In addition, key investors in the deal included CIC, China’s sovereign wealth fund, which put in $50m and Petronas, the national oil company of Malaysia, which took a smaller stake.

    Now as for the stock chart...

    The stock price has already risen almost 40% from Dec last year when it was at around 10 HKD. You can see that the rally looks unstoppable from here.
    A calculation of its PEG (Read more about it here - http://kissinvesting.blogspot.com/2012/03/why-pe-ratio-might-be-useless-and-what.html) shows around 0.75

    Key Take-away:

    In my opinion, the
    fundamentals and growth prospects for this company looks D*mn Good. Other countries' sovereign funds are supporting it, and as China turns to eco-friendly alternative for fuel, LNG is the best option as of now. (nope, not water or sun or wind energy.. all these are just not easily transported... to be honest). 

    However, i think that the
    best time to enter will be for the retracement to come.. and a fibonacci retracement indicator will be really useful when the time comes.


    Quick Profit: Bumitama Agri IPO

    Short Introduction: 
    A producer of Crude Palm Oil (CPO) and Palm Kernel (PK), Bumitama Agri operate in three provinces in Indonesia where its oil palm plantations are located, namely Central Kalimantan, West Kalimantan and Riau. 

    The Group's primary business activities are 
    1) cultivating and harvesting oil palm trees
    2) processing Fresh Palm Fruit Bunches (FFB) from its oil palm plantations 
    3) selling CPO and PK in Indonesia.

    Many people have this question in mind - To subscribe or not to subscribe for this IPO?

    Let's take a look at more of the news revolving around it... I will take the snapshots...

    According to http://business.asiaone.com/Business/News/Story/A1Story20120404-337604.html:

    • attracted strong demand from funds and wealthy investors looking to tap into the region's booming resources sector.
    • placement was 31 times subscribed, the highest oversubscription rate for a corporate offer since Yangzijiang Shipbuilding's 2007 IPO
    • (The IPO) attracted more than 150 investors but the majority are long-only funds. There's huge demand from high-net- worth individuals and family offices as well
    • Bumitama plans to sell 327.4 million shares, including an over-allotment option, at $0.745 each - the top of an indicative price range of $0.675 to $0.745.

    In a nutshell, the IPO fever is coming and wealthy people have nowhere good to place their money now since the property markets are in the overpriced region with the government clamping it down.

    Strong interest will mean more volume and more potential for it to go up since everyone wants a slice of it! Furthermore, majority of LONG-ONLY funds means that they will not be short-selling them and likely to push the prices up to buff up their own portfolios (make it nicer for investors to see).

    Lastly, Bumitama is clever to sell the shares at $0.745... it shows that they know the IPO fever is here and they are here to earn from it.

    I strongly urge people to subscribe for the IPO & set a profit target for it so you can sell within the 1st few days and make a quick profit! As usual, i walk the talk and have subscribed for them already! I will keep you updated as the IPO lists on the first day!