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Hi, 7% for a year, that's a goal. and it's not easy goal. Form my perspective, only when you trying return solid you succeeded to do more. I'm working per value investments terms. I'm doing only several moves a year. I believe in history of the market and about economy is doing well at the long... More
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  • CTCM Stock: Value Investing Buy Alert?
    CTCM stock: value investing buy alert?

    Once In a period I locate real value investing idea, do a little research and put money. But for the first time, it's a Russian company. So this is how I come up with CTCM, which is CTC company. First of all, in short, we are facing with a company which run 3 television channels in Russia. Company headquarter in the U.S.

    So what makes it value investing?

    First, I would put a "highly danger" on the value investing scale. This is because the company has dividend yield which is so night that makes me think more then a week how to deal with it. But in the and I came up with "buy" conclusion. Here is why:

    The company book value per share, based on the last report is 5$ A share. The current price of a share is 8.5$. Which gives us price to book of 1.75. The less the number the best it is.

    PE ratio is sensible - 8.87

    Let's put is on benjamin graham formula just to make sure of not exceeding 22. So 8.87 multiple by 1.75 gives us 15.5. Hey! Margin of safety is in

    Let's move the a core issues which is earning: the company posted EPS of 97 cents for 2013. The question should be- is it good or not? let's connect the dots:

    YearEPSGrowth
    20090.64 
    20100.9345.31%
    20110.34-63.44%
    20120.5973.53%
    20130.9764.41%
     Average growth29.95%

    Other parameter i find useful is Cash flow from Operating activities. Why it's so important? this parameter shows the amount of money the company brings to the shareholders from ongoing (the regular) business. no tricks in it!

    YearCash flow provided by operating activitiesGrowth
    2009132 
    201018540.15%
    2011115-37.84%
    201215736.52%
    201318618.47%
     Average growth14.33%

    If we covered the cash flow data, we must cover the net income data. Let's do it:

    YearNet incomeGrowth
    2009100 
    201014545.00%
    201153-63.45%
    20129375.47%
    201315364.52%
     Average growth30.38%

    We can see that the growth in net income is better than Cash flow growth. I'm OK with that, as long as it this way and not the contrary.

    The revenue on the other hand growth slower that the net income, that means the company get efficient from year to year:

     Revenues%
    2009506 
    201060118.77%
    201176627.45%
    20128044.96%
    20138323.48%
     Average growth13.67%

    Next issue will be the shareholders equity. This is the safe side of investing. Am i covered or not in case of catastrophic case. I want the shareholders equity to be close or less to market cap. in CTCM it was obvious that it's not the case, since i never come up a company with 8% dividend with no long term debt. Anyway, as noted above, the P/B is 1.5. but does the company succeeded with increase the shareholders safe side? let's check it out:

    YearShareholder EquityGrowth
    2009663 
    201079419.76%
    2011697-12.22%
    20127639.47%
    2013734-3.80%
     Average growth3.30%

    Positive, but not the best result, but i can live with it. i prefer banks with increase of 5-7% on this issue.

    what about the dividend you might ask?

    YearDividend paidGrowth
    2009No Dividend 
    20100.51 
    20110.8260.78%
    20120.52-36.59%
    20130.6321.15%
     Average growth15.12%

    The conclusion should be this:

    Investor pay price, get a value. at the past the price was high. Now the price is sensible. More than sensible.

    Disclosure: I am long CTCM.

    Tags: CTCM
    May 09 10:05 AM | Link | Comment!
  • 2013 Is Coming To An End!

    OK, it wasn't an easy year if we come back to January. No one could guess indexes will booming so well.

    To be honest, it was awesome year.

    So, what makes this year to be so great to me?

    First, it's my first year to invest like Ben Graham (the father of value investing) rules and during the year learned from Warren Buffet interviews, Videos etc...

    Second, finally, i feel like real investor, not like someone who speak without knowing what the companies i put the money is about. and this is a huge change. As Graham said, buy a stock from the point of view of someone who buys the whole company.

    Third, great book fall into my hand, named "Stocks for the long run". It's my suggestion for anyone to read it.

    Fourth, the "Intelligent investor" book. Anyone who act in stock must to read it, and not only once. what I'm doing is read it repeatedly, and read parts that have huge effect on me when i bit lost me "Value" way. this book is like a balance tool for me.

    Fifth, this is the book to value ratio. in addition to the PE ratio, i find myself test companies first by these 2 ratios. if i accept them, I'm moving forward to all others rules i learned from Graham books. and it not easy, this is why I'm using...

    Sixth, ..."Finviz" screener. OK, this is one if the best sites on earth for people like us. In the screener i submitted so hard fundamentals ratios that most of the time my upcoming list is empty. But when it's filled with 1-5 companies is step one for start with deeply investigation about each one of them.

    Seventh, BAC/ WDC. this are companies i found attractive while too much noise around said to get off of them.

    Eighth, the first tow rules of Warren Buffett: "rule #1 never loose money. rule #2 don't forget rule #1."

    Ninth, Stop speculation! I stopped invest in small companies, only large ones (S&P 500 companies/ Dow Jones and banks)

    Tenth: 2013 yield: 34%. Funny thing is that i meant to 7-8% yield. Along the year i find myself sometimes with 50% of my portfolio in cash and bonds. i felt defensive. On these days I'm about 65% stocks and 35% cash and bonds.

    Last one, during 2013 i never leveraged my portfolio.

    Thanks for reading, and good luck!

    Disclosure: I am long BAC.

    Dec 21 12:38 PM | Link | Comment!
  • Reason To Consider A Consideration!

    This time, I'm not talking about stock. I'm talking about me, you and any investor on earth. We are the people who might bought stocks this year. We are the people who should ask- would i pay higher price on my purchases this year? be gentle with you with your answer. My guess is that most investors on the win side this year. So, is it a good play for the regular investor? i don't think so.

    Here are some highlight:

    We are talking about the best year performance in 10 years for the sp500.

    PE ratio for the main indexes are far above the average points.

    No good news or bad news is in the air. So driving is missing for the market.

    Earning growth rate slow down this year. for the SP500 we are talking about 3.5% until June, so lets assume 7% this year. this is far bellow 12% average growth rate in EPS.

    All the financial and employment issues are familiar. i don't need to explain that. But what i think is that: BE CAREFULL.

    Despite companies are doing well, the stock prices are high. remember that fall comes when nobody suspects and when everybody earns. this are this days.

    Go to your portfolio, check deeply what fairly priced and what is not. In which stocks you have more confidence then others. what is the possibility of 10% reduction of this stock price? just ask yourself.

    I'm not saying that hard times are coming, I'm just saying that quick fall can come, this could be 5-12% in 3 or 4 days. Just to balance the prices again, crack the optimistic feeling we so love.

    Nov 25 6:44 PM | Link | Comment!
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