tag:blogger.com,1999:blog-28086856.post2516013752108319832..comments2023-10-24T05:02:12.306+08:00Comments on Eight percent per annum: Value investing in Singapore stocks: Starring: Crouching Tiger, Elephant and GiraffeJayhttp://www.blogger.com/profile/03292158817395898619noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-28086856.post-27165225078429985112012-08-11T05:50:52.757+08:002012-08-11T05:50:52.757+08:00Really interesting history, thanks Brian!Really interesting history, thanks Brian!alternative investmentshttp://www.greenworldbvi.com/alternative-investments-options/noreply@blogger.comtag:blogger.com,1999:blog-28086856.post-890244793763876272012-08-01T14:49:00.359+08:002012-08-01T14:49:00.359+08:00Nice story. I enjoy it a lot.
Congratulations on ...Nice story. I enjoy it a lot.<br /><br />Congratulations on your bet on CL. I like your article on CL as well. A number of consumer staples have been on a tear since 2010. <br /><br />I considered CL in 2010 when its stock was somewhat depressed to its earnings potential when the Venezuela devaluation hits the stock. But I invested in Coke instead. Both produced good returns in the period of time.<br /><br />Most of the increase in valuation is derived from an expansion in earning multiples than from the growth in actual earnings, including Coke and CL. I rather it comes from growth in underlying earnings than expansion in multiples. But I will still take it.<br /><br />In 2010, both KO & CL were selling for about 17x of the previous FY adjusted eps. Today, both are about 21x of last year adjusted eps. However, the stock price are up much more than what the earnings growth were for the period. From FY2009 to FY2011, KO & CL eps grew 25% and 15%, respectively. But the stock price for KO & CL grew by 55% and 45% , respectively, from the low prices of the stocks in 2010. So there is sort of a diversion in how the market value CL, KO or most of the other consumer staples then and now. <br /><br />If the market today values the stock the same as in 2010, KO would be selling for $65 while CL for $86. But it isn't. So we can conclude that most of the return can be attributed to expansion in multiples. <br /><br />For KO (based on $52 cost), $13 of the return is due to growth in earnings while $16 is due to expansion in multiples.<br /><br />For CL (based on $75 cost), $11 of the return since 2010 can be attributed to growth in earnings and the rest of $22 due to expansion in multiples.<br /><br />Have you considered any other consumer staples too? In fact, some of the Singapore consumer staples have also been on a tear, especially since last year. Like ThaiBev, Viz Branz and Super Group. All have been on a tear.Briannoreply@blogger.com