2015年10月4日星期日

SOS Will Warren Buffett buys Gadang?


Author: sosfinance   |   Publish date: Tue, 3 Mar 2015, 11:28 PM 

SURE OR NOT?
Na, it is too small for him.  Even if its profits double every 5 years.  It is too small.
At today's price of RM1.48, TTM PE 6.5x, ROE 14%, DY 2.7%, growth, guessing, double in 5 years? Or less?
A fund manager recommended Gadang, when it was about RM1.82, and forecast it to double in about 3 years if I remember it correctly.  After that, the price goes to as high as RM2.12, and after the oil price crashes, it went down to RM1.13 and now is RM1.48.
Warren Buffett did mentioned that, it is important that you know what will happen to the comapny in 3-5 years time, as far as the timing, let the market decide.  What he is trying to say is, as long as you are pretty sure it will double, plus minus one year, it is not important.
The fund manager goes on to promote this counter, saying it is a little IJM, which got my attention.
After going through it, I can see why.  One of the catalyst is the JV in development of Capital One, Johor.  This project will provide new contributions that will double its profits, similarly like Protasco having a 100ac of Kajang land to be developed over 10-15 years (minus the fraud, of course).
Gadang is into construction biz and now property development.  Not sure is the right time, right place or the right biz.  So, for those who are keen, it helps to investigate further whether the said development can really contribute.

SURE
I remember it has sufficient order book to last the Group the next 3-5 years.  So this is one of those few that caught my attention, good growth, high ROE (with property) and reasonable PE.  Let us hope they do not have any hanky panky like Protasco.  See you in 3 years.

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