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SCC - SEMIRARA MINING CORPORATION
LAST TRADE PRICE = PHP 249.0000
LAST TRADE DATE: 01/25/13
P/E RATIO TEST:
2009 Earnings-per-share = PHP 6.6500
2010 Earnings-per-share = PHP 12.1000
2011 Earnings-per-share = PHP 16.9300
2012 Interim Earnings-per-share (9 months ending September 2012) = PHP 13.2300
Average earnings-per-share (based on the past 3 years and 3 quarters) = PHP 13.3300
Average price earnings ratio (based on the past 3 years and 3 quarters) = 18.68
Result of Graham's price-earnings ratio test: FAILED
Benjamin Graham recommends current price no more than 15 times average earnings.
However, P/E <15 should be taken as an arbitrary value. Ratios do not tell us the whole story by itself. It is more useful to compare the ratios of one company to other companies in the same industry.
PRICE-TO-BOOK RATIO TEST:
Total Equity = PHP 15,246,475,011
Outstanding Shares = 356,250,000
Book-Value per Share = 42.80
Price-to-Book ratio (PB) = 5.82
Result of Graham's price-to-book ratio test: FAILED
Graham recommends that current price should not be more than 1.5 times the book value last reported.
However, P/B <1.5 should be taken as an arbitrary value. Ratios do not tell us the whole story by itself. It is more useful to compare the ratios of one company to other companies in the same industry.
Moreover, average earnings to book ratio (similar to return on equity) = 31.15%
NET-WORKING-CAPITAL OR "RARE BARGAIN" TEST:
Current Asset = PHP 11,683,654,481
Total Liabilities = PHP 21,181,330,268
Net Working Capital = PHP (9,497,675,787)
Current Asset to Total Liabilities ratio = 0.55
* By "net-working-capital", Graham means current assets (such as cash, marketable securities, and inventories) minus total liabilities (including preferred stock and long-term debt).
Result of Graham's net-working-capital or "RARE BARGAIN" test: FAILED
Total liabilities is greater than current asset.
Graham recommends issues with positive net-working-capital.
Moreover, total liabilities is greater than equity.
Total liabilities to equity ratio = 1.39
This company is relatively highly leveraged.
GRAHAM'S "BLENDED MULTIPLIER" TEST:
P/E = 18.68
P/B = 5.82
P/E*P/B = 108.68
Result of Graham's "blended multiplier" test: FAILED
Graham suggests that the product of P/E and P/B should not exceed 22.5.
However, P/E*P/B <22.5 should be taken as an arbitrary value. Ratios do not tell us the whole story by itself. It is more useful to compare the ratios of one company to other companies in the same industry.
LIMITATION OF ANALYSIS:
1. EPS calculation does not isolate "extra-ordinary income".
2. Analysis does not cover earnings stability, dividend records, earnings growth and futures earnings (or forward P/E ratio).
3. For future plans and prospects, read below reference.
http://www.pse.com.ph/resource/corpt/20 ... ct2012.pdf
http://www.pse.com.ph/resource/corpt/20 ... ec2011.pdf
The author hereby expressly disclaims any responsibility for error, omission or inaccuracy in the information, misinterpretation and any all loss, disappointment, negligence or damage caused by reliance on this information.
The author shall not be responsible or liable for any trading or investment decisions made based on this information.
If You're So Smart, Why Aren't You Rich? - BATMAN The Animated Series: Season 1, Episode 41
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