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Showing posts from December, 2020

Determining the best time to buy your house

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Case Notes 06:  When is the best time to buy your house in order to get the best capital gain? This article looked at the historical evidence in Malaysia and found that if you had bought a house a year after an economic downturn, you will get the best capital gain. For those who are planning to buy properties in Malaysia 2021, “… industry experts predict that it’s going to be a buyers’ market for the next few years so don’t pass up this advantage to get a better deal…”  iproperty.com For many buying a live-in property, one of the considerations is whether the property will achieve a good capital gain in the future. There are of course many factors that affect the capital gain, from location to the economic conditions.  But I would argue that historically in Malaysia, the year the property was bought makes a significant difference to the capital gain.  To illustrate this, I analyzed the capital gain over several 20 years periods for several house types in 4 regions in Malaysia. The

Dayang - is there a buying opportunity? (Part 2 of 2)

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Value Investing Case Study 07-2:  This is the second part of the 2-parter series on the fundamental analysis and valuation of Dayang Enterprise Holdings Bhd.  This post focuses on management performance, valuation, and risks.  To a value investor, a value trap or a buying opportunity are opposite sides of the value investing coin being tossed up. Which side the coin lands is actually a question of valuation.  Dayang Enterprise Holdings Berhad (DEHB) is currently trading at RM 1.24 per share (as of 1 Dec 2020) compared to its book value of RM 1.42 per share (as of 30 Sep 2020).  You may think that it has enough margin of safety from the book value and hence this would be a buying opportunity.  But this is true only if there is no potential impairment.  After all, the DEHC Group recognized some impairment in 2017 due to low vessel utilization.   Given the current Covid-19 situation and the global oil & gas excess capacity, will there be impairment in the immediate future? But yo

Is Dayang a Value Trap? (Part 1 of 2)

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Value Investing Case Study 07-1:  This 2-parter is on the fundamental analysis and valuation of Dayang Enterprise Holdings Bhd.  This post focus on company analysis.  Dayang Enterprise Holdings Berhad (DEHB) is currently trading at RM 1.24 per share (as of 1 Dec 2020) compared to its book value of RM 1.42 per share (as of 30 Sep 2020).  It was trading at RM 2.51 per share as of the end of 2019.  Looking at the current price, it is cheap.  Is this a bargain or a value trap?   You should not look at “cheapness” from the price perspective.  Comparing the current price with historical highs could be looking at how market sentiments have changed. You have to look at whether the business fundamentals and hence its intrinsic value have changed. There have been changes to the fundamentals since the end of last year due to Covid-19 and the excess supply in the global oil & gas market.   Yet, you cannot conclude that it is a bargain or value trap until you have assessed how these change