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kumardiwesh
Senior Member
Joined: 26/May/2008
Location: India
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Posts: 721
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   Posted: 19/Jan/2009 at 1:06am |
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I was just making a case for companies which don't increase their earnings at more than 15-20% per annum.
Such companies can attract better multiples from the market by increasing their dividend payout ratios.
After all the idea is not to grow in size but to make money for shareholders.
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"History does not tell you the probability of future financial things happening" - Warren Buffett
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basant
Admin Group
Joined: 01/Jan/2006
Location: India
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Posts: 18403
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Posted: 19/Jan/2009 at 7:37am |
Originally posted by kumardiwesh
I was just making a case for companies which don't increase their earnings at more than 15-20% per annum.
Such companies can attract better multiples from the market by increasing their dividend payout ratios.
After all the idea is not to grow in size but to make money for shareholders. |
I agree but the gain from keeping that high multiple will be one time and non recurring.
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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rapidriser
Senior Member
Joined: 18/Nov/2007
Location: India
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Posts: 966
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Posted: 19/Jan/2009 at 7:46am |
Originally posted by kumardiwesh
I was just making a case for companies which don't increase their earnings at more than 15-20% per annum.
Such companies can attract better multiples from the market by increasing their dividend payout ratios.
After all the idea is not to grow in size but to make money for shareholders. |
Ultimately, we have to see what the company does with its retained earning. If, it simply goes into their Cash & Bank Balances, then there is strong case for increasing dividends. If it is used for investments in productive assets, then the company may justifiably reduce its dividend.
In this context I remember many years ago Bajaj Auto used to be one of the worst culprits in this regard with the company having thousands of crores lying in their bank balance but refusing to distribute it to their shareholders.
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equity analyst
Senior Member
Joined: 18/Jul/2006
Location: India
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Posts: 209
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Posted: 19/Feb/2009 at 10:32am |
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whts cookin in colgate stock at 52 week high.
i sold some of my holdings at current levels.
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"Markets are the places where two types of people meet up in the morning: those with experience and those with money. Towards the end of the day, they exchange their assets and go home."
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basant
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Posted: 19/Feb/2009 at 10:40am |
Dividend yield stocks will go higher in terms of uncertainity.
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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chaudhuris
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Joined: 22/Sep/2008
Location: United States
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Posts: 83
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Posted: 25/Apr/2009 at 4:30am |
Originally posted by Vivek Sukhani
Value guys look for just 3 pages in the annual report......Balance Sheet, P/L and Cash Flow........and some experienced ones even dont look at cash flow......they prepare it manually very fast.
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Nothing could be further from the truth.
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Only when the last tree has been cut down
Only when the last river has been poisoned
Only when the last fish has been caught
Only then will you find that money cannot be eaten. ~ Cree Philosophy
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Vivek Sukhani
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Joined: 23/Jul/2006
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Posted: 25/Apr/2009 at 7:57am |
Originally posted by chaudhuris
Originally posted by Vivek Sukhani
Value guys look for just 3 pages in the annual report......Balance Sheet, P/L and Cash Flow........and some experienced ones even dont look at cash flow......they prepare it manually very fast.
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Nothing could be further from the truth. |
When I say value guys, I mean the hardcore Grahamian investors. Most of the information they want can be gleaned from these 3 pages.
The Intelligent Investor clearly places a very big emphasis on the mathematical aspect of investing.
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Jai Guru!!!
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chaudhuris
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Joined: 22/Sep/2008
Location: United States
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Posts: 83
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Posted: 26/Apr/2009 at 3:08pm |
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Agreed that Graham had a fairly mathematical approach to his stock picking and he developed his net-net concept in the same way as well.
What you are saying is an assumption based on Graham's mathematical approach. I am not sure if Graham would say that get your data from Value Line or Bloomberg or just the 3-4 pages of the annual report comprising the P&L, the Balance Sheet and the Cash Flow. The reason is that several companies play around with accounting standards and try to fudge data. That can have impact on how you calculate PE or PB or FCF/FCFE and other ratios. That is why Buffett, Munger, Whitman and other value investors always read annual reports from start to finish along with ARs of competitors.
Graham's concept of intrinsic value of stock may also be calculated in different ways. Bruce Berkowitz in his recent interview shows some interesting perspectives on stock valuation through his example of Hertz Rental.
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Only when the last tree has been cut down
Only when the last river has been poisoned
Only when the last fish has been caught
Only then will you find that money cannot be eaten. ~ Cree Philosophy
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