MPRH is it the most undervalued stock in plantation sector?

@ The Alchemist,

Thank you for highlighting the facts I missed.

Specially , "50 % of bottom line Profit come from Other Income. Majority of this could be Gains from Fair Value of Biological Assets"
Yes they do this every time. Hence we must know if EPS is 11/-, 5.50 is cash and rest is in trees and they will grow further.

IMO, this practice is Ok if you get funds from core business to run the company until you harvest the trees.
( Not like in Pyramid Timber companies (world wide) which use money from new investors to pay salaries and pay back old investors )

I think, up and down in plantations, power sectors due to various factors (including what you mentioned) provide opportunities to long term investors to gain if they understand the nature of these sectors.


Note:
Somehow, I did not use outside funds or margin loans for my recent purchases. Just sold some nonperforming(s) to try new fortunes.

"Nonperforming" = The stocks I thought good but lost their potential due to changes in macro economic or any other factors in the country OR just bad hits.

We all know that Tea business is doing better than Rubber these days. All MPRH,MASK & TPL have mor than 90% exposure to Tea.

When we consider plantations their is always a seasonal Risk involved with it.

How to minimize this risk is to buy plantation stocks below their Net Assets Value. Unlike shares like BOPL all above given shares(MPRH,MASK,TPL) trade below their net assets value.

To be exact NAV of the shares are as follows

MPRH - 40
MASK - 31
TPL - 47

Also earnings of these shares are very healthy. For the last quater EPS of these shares were

MPRH - 6.19
MASK - 3.50
TPL - not released

Last quarter was quite an exception, projected sustainable minimum eps annually for above given shares could be

MPRH - 9
MASK - 5.5
TPL - 6

at a price earning ratio of 5 these shares may worth

MPRH - 9*5 = 45
MASK - 5.5*5 = 27.5
TPL - 6*5 = 30

So even at your target exit price these shares will have value as they trade at a p/e ratio of 5 & below their Net asset value. Anithing above will be a Bonus.

*Speciality of TPL is the high payout ratio(dividend of rs2.5 per share) as we all know TPL is a better managed company in the plantation sector, It can be given a high p/e as well.

For me these 3 are the best picks within tea based plantations. Share your view.

I feel to be risk averse when selecting plantation stocks you need to consider crop diversity. Your above points are appreciated. Plantations such as Namu and kegall in this instance is very special Namunukula has palm as well and Kegall is the leading plantations on rubber. Plantation investments are always risky ad cyclical but always a very good investment in the long run as it generates cash on an ongoing basis. Note : I do not own shares of any of these but wanted to give inputs as I have invested in these stocks in the past.

Nigel.Machado -> Do u really need another thread for this?

This looks like promotion to me..

smallville wrote:Nigel.Machado -> Do u really need another thread for this?

This looks like promotion to me..

Promotors will need to promote and get out of plantations before the wage hike hits in the second half of the year.

Talking abt bad habits, sometimes we love some stocks and get in hoping it can go up then after holding for along time realise it wont go much..

Then sell.. Alas! in a coupla days it runs

This happened to me several times so I know if I sell something it can go up

smallville wrote:Talking abt bad habits, sometimes we love some stocks and get in hoping it can go up then after holding for along time realise it wont go much..

Then sell.. Alas! in a coupla days it runs

This happened to me several times so I know if I sell something it can go up

yes. same here. now im not doing that mistake. sell only after studng all possible facts. im on my way to broker. i want to reply when
i saw yr comment .....sory ...using small android

Chinwi wrote:

smallville wrote:Talking abt bad habits, sometimes we love some stocks and get in hoping it can go up then after holding for along time realise it wont go much..

Then sell.. Alas! in a coupla days it runs

This happened to me several times so I know if I sell something it can go up

yes. same here. now im not doing that mistake. sell only after studng all possible facts. im on my way to broker. i want to reply when
i saw yr comment .....sory ...using small android

Its a common thing. It happens for every one. I know for a fact that BOC sold 1Mn BALA at 23 about 4 months back kinda like in octomber. But on 31st december it did touch 44. Soon after BOC sold it started moving up.

It happens to most people & institutions. Right at the time when it moves up dumb money sells & smart money moves in.

I completely agree with you nigel, MRPH is trading at a discount even i bought it at around 23 levels, There profits are quite impressive as well. Not forget that tea prices are also in a increasing trend, hence we might see some good earning in the future.

smallville wrote:Talking abt bad habits, sometimes we love some stocks and get in hoping it can go up then after holding for along time realise it wont go much..

Then sell.. Alas! in a coupla days it runs

This happened to me several times so I know if I sell something it can go up

ah tell me about this.. . I also had some bad experiences.

Jiggysaurus wrote:

smallville wrote:Nigel.Machado -> Do u really need another thread for this?

This looks like promotion to me..

Promotors will need to promote and get out of plantations before the wage hike hits in the second half of the year.

I generally used to buy at that period, and used to sell in 1 & 1/2 years time

Jiggysaurus wrote:

smallville wrote:Nigel.Machado -> Do u really need another thread for this?

This looks like promotion to me..

Promotors will need to promote and get out of plantations before the wage hike hits in the second half of the year.

Gaja wrote:
I generally used to buy at that period, and used to sell in 1 & 1/2 years time

wise approach. plantation offer you well identifiable cycles to deal with .

How about see your share running and then you sell at a small dip to gain profit. Then the share again runs very much more
than what yo ugained ( if you held you would have ot 50-100% more even)

UKboy wrote:

smallville wrote:Talking abt bad habits, sometimes we love some stocks and get in hoping it can go up then after holding for along time realise it wont go much..

Then sell.. Alas! in a coupla days it runs

This happened to me several times so I know if I sell something it can go up

ah tell me about this.. . I also had some bad experiences.

Now MW is about 160k in MPRH

he is still collecting plantations. Interesting

you still follow him huh ?

Arena wrote:Now MW is about 160k in MPRH

he is still collecting plantations. Interesting

There is no clear reason to leave him.
Rational and logical and very specially long term thinking.
Lets wait and see this time with plantations.

And you trust the top shareholder

Hey whats wrong with the top shareholder, is there anything to worry about?
He is the person running the business also so if there are issues with management its and issue. I hold this share.

Arena,

I already commented about his certain talents which I do admire.

But someone with money and connections can buy low , talk a lot about it ( like PCH saga) and when the share moves it is called a self fulling prophecy. The Chicken stock atleast had fundamental when he talked.

But I do find it amazing how he knew stuff during certain period of time ( before results ) and then how he knows exactly when to unload at the top . ( it happen in BFL and PCH)

I think it okay to follow to get ideas( as he is a good analyst ) , but there are other things I am not sure about to follow blindly. ( I know you are not)


Yes plantation will run , but when? If the big run is in September it is a huge opportunity cost.

Arena wrote:There is no clear reason to leave him.
Rational and logical and very specially long term thinking.
Lets wait and see this time with plantations.

Yep agreed and i dont follow blindly.
As you said it is really interesting how they find early. industry analysis ?

As per my knowledge real investors visit the Out lets and factories before buying shares.

There will be no opportunity cost at all even it happens in Sep. or Dec. since still the collection is going on.

I agree with the point they can easily push the prices since they have money. but for sure they cant push the entire plantation sector this time.

I respect this value investment the reason is still i am not mature to do long term investments.

"As you said it is really interesting how they find early. industry analysis ?"

Hmm, if resourceful there are "other" options. I will n t speculate further.


"There will be no opportunity cost at all even it happens in Sep. or Dec. since still the collection is going on."

WHat I mean is if you hold a share for 12 months and it goes up by 15% vs some other share goes up 25% in 1 month there is a short term opportunity cost.

Examples

I held some CIND with big fundamentals . But there was a opportunity cost as it does move easily.

Only last week I mentioned about ESL at Rs 24. Now it ran to Rs 28 in few days. ESL is also a speculative ( also fundamental) hot stock in this environment.

there was a time opportunity cost.

Slstock

That is a very basic question you asked.

How can you find another share to trade. Speculation ?

Big investors deal with huge quantities. They cant shift from one share to another at once. It takes years and they dont sell immediately. Even Another goes 1000% they dont move. That is the strategy ........Only the loss id the FD rate they loose.

Arena,

I am not talking about big investors. If so what you said it true. Btw , MW is not in our league.

I am talking about you and me with retailer quantities and thus opportunity costs. Am talking about having significant exposure to plantations if you are just following what MW does.
If they move good . Else opportunity cost. Personally I am holding out till June quarter before any big plantaion purchase. maybe I will miss a sudden run, but I am willing to take that smaller risk. Part of my other shares have performed much better . SO no worries so far.


Also when I looked at the reoports last time I noticed MW bought BOPL at around Rs 20 in 2011 or so.
Then I guess he would have averged when shares dropped in 2012.

What an opportunity cost !

Hope you saw the issues I am talkign about.

If not let finish this and go about our other work.

Arena wrote:Slstock

That is a very basic question you asked.

How can you find another share to trade. Speculation ?

Big investors deal with huge quantities. They cant shift from one share to another at once. It takes years and they dont sell immediately. Even Another goes 1000% they dont move. That is the strategy ........Only the loss id the FD rate they loose.

slstock wrote:Arena,

I already commented about his certain talents which I do admire.

But someone with money and connections can buy low , talk a lot about it ( like PCH saga) and when the share moves it is called a self fulling prophecy. The Chicken stock atleast had fundamental when he talked.

But I do find it amazing how he knew stuff during certain period of time ( before results ) and then how he knows exactly when to unload at the top . ( it happen in BFL and PCH)

I think it okay to follow to get ideas( as he is a good analyst ) , but there are other things I am not sure about to follow blindly. ( I know you are not)


Yes plantation will run , but when? If the big run is in September it is a huge opportunity cost.

Arena wrote:There is no clear reason to leave him.
Rational and logical and very specially long term thinking.
Lets wait and see this time with plantations.

Mmmm....plantation run IF they don't run now there will be no run for some times unless tea and rubber prices go up. Way forward for tea plantations is to come up with new ideas like BOPL-ice tea,ELPL-chines specialty tea but these projects will take 3-5 years to make impact on the bottom line. So I think Mr market will give us a chance to buy plantations cheaper than current prices from next quarter.If you have enough holding power like MW...If not we will blame MW again.

Some called it promotion. Yet MPRH gave a healthy return above 50% moving from 18-20 level to 28-30 level. Highest point being 33.

My good so many share gave 50% run from bottom values. Some gave over 100%.

Nigel.Machado wrote:Some called it promotion. Yet MPRH gave a healthy return above 50% moving from 18-20 level to 28-30 level. Highest point being 33.

Nigel,
Do you think the share has no value now? I dont see your name in the list anymore? This is not a trick question just want to know your opinion

I shed some of my holding before 31st March and the rest afterwards. Have to wait & see about the wage increment issue. Tea based plantations will be healthy till avg tea prices are above rs420. But increase in grativity has to be calculated. Also according to SLFRS acturial gain or loss on retirement benefit plan will have to be computed. This will vary from business to business as the discounting rate for this calculation will be based on companies cost of capital. Im still holding onto MASK though.

May be an expert can shed some info on this acturial gain loss calculation on retirement benefit plan according to SLFRS.

Thanks mate,

I saw some people mentioning about Horana. They even said that they will declare a devident this time. If I am not mistaken Their balance sheet is not great, they have a negative cash position and I do not know how they can pay a devident?

What are your views?

guys please comment?.

HORA is a well managed company among plantation companies. For an instance we know that holding companies charge an Management fee from the plantation companies. Mangement fee for MASK is 184mn & for HORA its only 16mn. Even if mgt fee is calculated based on revenue still it isvery much lower than MASK.

HORA will be able to declare a dividend as they have made 300mn positive cash flow from operations. Also 88mn after investing & financing activities.