Today when almost 800 counters crashed early in the morning NYLEX Stood Firm & Unwavering. Why?
NYLEX IS A STOCK OF ROCK SOLID VALUE. AND IT HAS GREAT GROWTH HIDDEN FROM VIEW.
Rock Solid Value? Great Growth Hidden From View? A Hiddem Gem? Are You Serious?
Yes! Why Not?
NYLEX – ROCK SOLID VALUE.
In The Book called “THE INTELLIGENT INVESTOR” By Benjamin Graham. The Most Important headline of Chapter 20 states,
“Margin of Safety as the Central Concept of Investment“
NYLEX is selling at 64.5 cents with High NTA of Rm1.65. A Huge Discount of 61% or over Rm1.00 (It Has Great Margin of Safety)
Why the Need for Safety in Investment? In real life we demand safety for many things.
Example: Driving up Genting Highlands. We make sure the brake is working properly. We are very concerned for the safety of our life and our loved ones. From time to time we hear of buses, cars, jeeps with faulty brakes making their descent from Genting. Then their brake failure! And the crash and lost of lives. All because they neglected the aspect of safety.
We also make sure our house has locks, safety alarm, remote camera. fierce dogs & even guards for our exclusive gated and guarded housing estates. Why? For safety of course.
We also make sure our money and valuables are kept safely in “Safe Deposit Boxes” both at home and in the Bank.
Then why are many so reckless when they come to share investment. The idea of being “safe” first is thrown to the wind. Thousands, tens of thousands, hundreds of thousands, even millions of dollars are invested in stocks without any thought of safety.
Not for Ben Graham – The Father of Value Investing.
The Central Concept of Investment is First & Foremost based on Safety or “Margin of Safety”, to be more accurate.
What then do you liken with “Margin of Safety”?
Think of crossing a desert, a journey of 7 days. What animal except the camel could carry your loads across such dry and deserted lands? Ha! The camel has 2 humps which it store fat and water. So unlike other animals it can withstand drinking for 2 or 3 days without water. His 2 humps are the margin of safety that kept him alive while all the other animals perish with thirst.
So is a Company With Huge ASSETS BACK UP. THEY ARE “THE MARGIN OF SAFETY”.
In emergencies these ASSETS COULD BE LIQUIDATED TO FEND OFF CREDITORS & PREVENT BANKRUPTCY.
Will NYLEX PASS THIS CRUCIAL TEST?
NYLEX Is 64.5 cents with NTA of Rm1.65. Selling at a discount of 61%.
Cent for cent, dollar for dollar in equal term would mean that
we should pay 64.5 cents Cash for 64.5 cents Assets. Ha! There is a Huge Surplus of Rm1.05 Spare Worth.
So We Are Paying 64.5 cents for Rm1.65 worth of shares!
And the EXTRA Rm1.05 “IS OUR MARGIN OF SAFETY” – The More The Merrier.
But go deeper and SEE clearer:
What are some of these Assets.
For brevity we look at just one Asset (please refer to 2015 Annual Report)
ASSET NO. 1
Nylex (M) Sdn Bhd…………………………30,224 sq meter……..Off & Factory…………….
Pesiaran Selangor…………………………12,140 sq meter……..Warehouse & vacant land…………….Total price: Rm18.961 millions
40200 Shah Alam, Selangor
Now let’s calculate its worth.
30,224 sq meter + 12,140 sq meter = 42,364 sq meter.
Let’s convert sq meter to sq ft = 42,364 x 10.763 = 455,963 sq ft
Now we get its cost per sq ft = Rm18.961 millions divided by 455,963 = Rm41.58
Here we are = The Land Cost of Nylex Factory is Rm41.58 per sq ft.
Now if you check the industrial leasehold land in Section 15 Shah Alam It is Rm250 per sq ft
WOW! Book Value Only Rm41.58 (Current Market Value Rm250 per sq ft)
So if Revalued NYLEX’s Lands Will Go Up 600%
And that’s land cost only. How Much are the Buildings Worth?
SEE if NYLEX’s 20 over years old Assets are Revalued NTA Should Easily Cross Rm2.00? Rm2.50? or Rm3.00?
Any Real Estate Valuer in Shah Alam can help?
In any case THERE IS DEEP VALUE IN NYLEX’s ASSETS!
Now Nylex has Assets!
Has Nylex Growth? Why earnings are miserable?
YES! OF COURSE NYLEX HAS GROWTH IF YOU KNOW HOW TO FIND IT?
Take a look at the latest quarterly report
From quarter to quarter
Total Net Net as Improved From Rm626.347 millions to Rm654.170 millions (Up Rm28 millions)
NTA has gone up from Rm1.56 to Rm1.65: An increase of 9 cents. Plus 2 cents dividend that means a 11 cents growth
11 cents growth for a share worth 64.5 cents.
It’s a nice 17% Growth or P/E 5.86
Do you SEE what I SEE?
Never mind if we don’t SEE Eye To Eye.
At Least DYNAQUEST CAN REALLY SEE! AND SO THEY LOADED UP.
What are you waiting for?
It’s almost 7am, Iskandar’s Time
And Thought For The Day Regarding Nylex
On surface Nylex looks like a slow moving Plastic Stock. Not any more. Why?
Let me illustrate:
In Year 1992 I bought my First New Car. It was a Proton Saga 1.3 (12 Valve)
I drove up to Genting Highland with my family. Along the way I gave a ride to some friends. Ha! the car was packed with 7 people. Up up the car struggled up the mountain slope. It was a slow climb. The engine was under power.
I sold my Proton and bought a 2nd Hand Volvo 940 Turbo. Wow! Now got Turbo Power! Driving up Genting Highland was a breeze! What a change!
Yes! NYLEX was a slow boat. Not any more. Now NYLEX HAS TURBO POWER!
WHAT? What kind of power?
Power No 1
Falling Crude Oil prices. This Is The First Booster! All NYLEX Feed Stocks will cost less & less as Crude Oil Prices Fall lower and lower!
Power No 2
Fallen Ringgit. Nylex exports in US$. The Stronger the US$ the better the margin for NYLEX. See how furniture and glove stocks benefitted from strong US $
Power No 3
Ringgit weakened Greatly against the Chinese Yuan
Ha! Malaysian Products Now More Competitive than China made products?
NYLEX Will Make Inroads into many more countries. Now 25 nations & still growing!
Power No 4
Transpacific Partnership (TPP)
This one will add one more Turbo- Charged Power to Nylex. With tax reduced to zero NYLEX Can Beat Other Exporters to Canada, Vietnam, USA, Japan, Australia, New Zealand, as far as Mexico and Others
So here you go!
Like a Volvo with Turbo charged engine powering up Genting NYLEX NOW HAS 4 POWER TURBO.
NYLEX – GO GO POWER RANGER!
I have stayed in Genting Highlands more than 200 times. Never once I went inside the casino. I don’t believe in gambling. So don’t think wrong thoughts. Ok?
Have a nice and productive day.