Investing For Value

Value Investing Case Study 04-2:  This post focuses on the intrinsic valuation of CSC Steel. It is a continuation of the fundamental analysis carried out in Part 1.  Steel is a commodity. As a commodity company, CSC Steel sells its products at the prevailing international market prices. CSC Steel’s profitability will be affected by the prices for its raw materials (hot roll coils) and its finished cold roll coils.  When commodity prices are on the upswing, all companies that produce that commodity benefit.  During a downturn, even the best companies in the business will see the effects on operations. In Part 1 , I have shown that despite being in the down cycle and with minimum trade protection policies, CSC Steel has managed to be profitable.  With a price that is below its Graham Net Net (a proxy for its liquidation value), is the market suggesting that there is no upturn in sight?  In Part 2, I will argue that the CSC Steel has the financial resources, track record, and technology t

Value Investing Case Study 04-1:  Company analysis and valuation of CSC Steel, a cold roll company listed on Bursa Malaysia. This post focuses on the business fundamentals CSC Steel Holdings Berhad (CSC Steel) is currently trading at RM 0.835 (as of 1 Sep 2020) per share compared to its Graham Net Net of RM 1.53 per share (as of 30 Jun 2020).  The Graham Net Net is often considered a proxy for the company’s liquidation value.  In fact, Ben Graham spent most of his time investing in Net Net companies.  Why is CSC Steel trading below its liquidation value then? Is the market suggesting that it is not even worth its liquidation value?  Is this a value trap or a steal?  A value trap is one side of the value investing coin. The other side is that it is a steal, a hidden gem. CSC Steel has RM 0.80 cash per share (as of 30 Jun 2020), zero borrowings, and a good operating track record.  Its value is intact.  It is not a value trap.   Join me in a 2-parts post as I lay out my case on why the ma

Fundamentals 04-1: This is a post for those who don't know anything about investing but want to start investing. I frequently come across questions on Quora like I have $ 100, how do I start investing? I want to learn to invest, but where do I start? These are beginners learning how to invest. We sometimes forget that there is a large investment universe out there.  There are different asset class eg stocks, bonds There are different investing styles eg technical vs fundamental It can be confusing for someone without any investing knowledge.  How do you start if you want to learn to invest as a beginner? 1)  First get an overview of the various aspects of investing eg fundamental vs technical, active vs passive, etc 2)  Once you have some basic understanding, chose your path.  This will depend on your personality, the amount of time you have, your educational background, etc  3)  Thereafter you proceed with a more in-depth study of the chosen investing path.  This article is to