Digi: Another Dividend for Shareholders

Yest Another Dividend

Isn't this not a good share or what?

Having some 9.9 million phone subscribers of both voice and non-voice, Digi achieved better results this time around.

Mobile data revenue exceeded 30% of the group's service revenue for the fourth quarter. Revenue fro the group upped 10.3% to 6.0 billion while EBITDA was RM2.8 billion.

Capex investment was also stepped up from RM550 million to RM660 million. This is done to step up site  roll-out and to increase capacity. Operating cash flow rose to RM2.2 billion.

Digi currently has 5.2 million active mobile internet users.

So, it is now giving out another generous interim dividend. A 6.5 % dividend for the new 1 sen par share.

Digi has been re-rated to a new target price of RM4.40 by some analysts.

When will this new Rubicon be attained or crossed?

Currently, Digi is priced at RM3.93 as it closed for the long Chinese New Year break.

Many analysts expects the Bursa to climb steadily after this long break.

Will Digi move up beyond RM4.00 in the near term? Only hindsight can tell.

Happy Chinese New Year of the Water Dragon to you!

Berjaya Foods: Sizzling Mood

Adding value in Indonesia

Yes, after a quiet start last week when it showed life after a long period of hibernation, the counter rocketed 9 sen today to touch RM1.10 after the company announced it has successfully inked a deal with the franchise holder of Kenny Rogers Restaurants (KRR) in Indonesia.

Taking over 51% of the shares of the franchise holder, PT Boga Lestari Sentosa  is definitely going to add a fat bottom-line to Berjaya Foods given Indonesia's huge population.

As Indonesia is showing more prudent economic development these days, the income of the local Indonesian will definitely improve giving them affordability to dine in KRR joints.

I think the time for a re-rating of the counter is close at hand as BJ Foods ready itself for the 4 for 5 rights issue of RM0.65 sen per share.

BJ Foods closed at a good price of RM1.09 this evening.

Mesiniaga-Superior Dividends?

Dividend Payor

If you look at the dividend trend of Mesiniaga, you will be persuaded to invest in this RM2.00 plus counter.

Let us look at the dividend track record of the company from 2003 to 2010.

2010: 20 sen less 25% tax (15%)
2009:19 sen less 25% tax (14.25%)
2008:19 sen less 26% tax(14.06%)
2007:19sen less 27% tax(13.87%)
2006:19sen less 28% tax(13.68%)
2005:19 sen less 28% tax(13.68%)
2004:13sen less 28% tax(9.36%) + 3 sen tax exempt > 12.36%
2003:13sen less 28% tax(9.36%) + 3 sen tax exempt > 12.36%

Thus it can be seen that the average dividend received is 12.36% to 15%. This will work out to 13.65 sen per share

Assuming that you have expended RM2.00 to buy 1000 shares of Mesiniaga in 2003, you would have received 13.65 sen of dividend per share per year.This will work out to RM135.50 per year times 6 years which should earn you a tidy sum of RM813.

Compared to a fixed deposit rate of say, 3%, you would have earned 6.83 sen per RM1 investment or an equivalent of 3.83% more for every ringgit invested.

If Mesiniaga can maintain its dividend policy and rate payout, then we can say that it is one great stock to derive returns from!

Standard and Poor's European Downgrade

Making Everyone Poorer!

When the news came into the market that Standard and Poor's have downgraded the credit ratings of some major European economies, everyone expected the backwash effects to overwhelm Asian markets and Wall Street.Only Germany withstood the downgrade.

As there were no illuminating news from Wall Street, today saw a swath of red ink encompassing major regional markets.

So Bursa went down more than 14 points at today's close.

Even resilient shares like Digi got hit and went down 3 sen.

 The big boys like BAT,Genting Berhad, GAB and Dutch Lady took wallops at their broadsides.

Interestingly shares such as Maybulk bucked the trend. What is happening here? Is Kuok taking this counter private as well? Good to watch for any developments here.

Also shares such as LPI recovered on closing to end unchanged at RM14.00 as the dividend payout of 50 sen occur on this Friday, 20th January.

Genting Cheapens!

I was in Genting Highlands last week-end and yesterday as well.

Cheapened Product

What I have noticed is there is a lot of cost cutting.

For instance, there is no longer any Milo for casino patrons. The tea once served with sugar and cream  is now without sugar and the coffee with sugar taste like it has been recycled many times over.

Then, let us look at the New Orleans Restaurant in Monte Carlo Casino.

Where in the past, you can have any numbers of refills of soup, salad and coffee, they have now put up signs that forbade any refills. Charges or surcharges are posted on the tables and well as at the place where the soup is ladled and at the salad bar;so if you are caught infringing this new condition, you pay the price-lah.

I think Genting is not being productive to maintain quality but just cheapening itself.

How sad!

Digi: The Long March

Remembered all the long marches in the world?

Long March and Suffering

Yes, the long march of Mao Tze-tung was one and it brought the country independence.

Or of the concept of 'long suffering' which Christians oftentimes  mention in living the life of a Christian with its trials and tribulations.

Going back to Digi, since it went ex-split and opened at RM3.49, the climb has been steady with its usual ups and downs. At the current price, the stock has climbed up by 40 sen.

Currently, it is trading in red ink at RM3.90 after hitting an inter-day high of RM3.95.

As it is Friday, do not expect much up side.

Digi closed down 2 sen to RM3.90.

LPI: A Great Investment Adventure

A 6 fold return

Based on the 2010 LPI Annual Report,an investor who bought 1000 shares in the company  in 1993 and kept it until this day will be in this position at the end of 2010.

Based of the price of the shares and the subsequent bonus and rights issue, that shareholder will be having RM113,875 worth of LPI shares. Add the dividends paid of RM39,750, it means that for the  shareholder  would have pocketed RM153,625 if he sold all his shareholdings on the last trading day of 2011. The rights issues quantum expended was only RM10,730 thus far. On a 17 year period, the annualised returns worked out to some 27.3% returns.

In 2010, a bonus issue of 1:2 and a rights of 1:10 at RM7.00 were issued and traded. A shareholder with 1000 shares will have to pay RM700 to get 100 shares. With the bonus issue of 500 shares thrown in, it means he will have 1,600 shares.

When the shares traded in September, from RM18.00 it went down to RM11.94 to accommodate the bonus issue. At RM12.00, this shareholder would have RM19,200. It you deduct RM700 from this value, the net benefit for the shareholder will be RM500 in September 2010.

Today at RM14.00, the worth of the shares for that shareholder will work out to RM21,400 (after deducting for the RM700 for the rights value).

An investor who bought into the share at RM18.00 cum rights would have earn RM3,700 as of today. That will work out to almost 20%. Add the special dividends when the shares go ex on 20 January, it will mean a return of 19.2% per annum. This is certainly better compared to the 3% and below fixed deposit regime in the banks today (by 6 folds!)

LPI closed 10 sen down at RM13.98.