Dear all,
I wish I have an answer to Philip’ sharp mind and acid tongue critical
of INSAS: Please explain clearly why cash rich company selling warrants
and doing cash call?
Very simple: You own INSAS for 3 years you should be able to explain
very clearly what is happening. Why undervalue company with hundreds of
millions of cash is taking advantage of minority shareholders instead of
helping them?
I will wait until the RI circular make available to shareholders and ask the Board the necessary of cash call RI:
Meanwhile many investors had give up on INSAS and label INSAS as value
trap for beginner. I can understand their feeling and do not wish to
dispute their claim.
I first bought 12,000 INSAS shares at RM 0.843 on 03/02/2017 and since
then besides trading some had topped up INSAS and now my hlebroking
portfolio inquiry show:
|
3379
|
|
1,345,000
|
0.8371
|
0.7600
|
1,125,899.50
|
1,022,200.00
|
-103,699.50
|
-9.21
|
I had penned below 2 blogs on INSAS:
I3 Investment Bloggers day: Love triangle (FA-BS-TA): intrinsic value of INSAS
INSAS Deep Value Investing: Assets value (liquid assets) and Earning play
Today I would like to borrow below article from felicity:
Tuesday, July 9, 2013
Is this not the most undervalued stock? (Updated)
Monday, December 9, 2013
Looking at Inari to understand Insas (Revised)
Thursday, November 26, 2015
Insas: When the investor is not properly informed - felicity
In several of my earlier articles, I have mentioned of companies which
holds their businesses in form of investments should be at the very
least be measured using its book value.
In Buffett's Letter to Shareholder in 2011 Warren shared his thought on share repurchases, and book value valuation.
“We have no way to pinpoint intrinsic value. But we do have a useful, though considerably understated, proxy for it: per-share book value. This yardstick is meaningless at most companies. At Berkshire, however, book value very roughly tracks business values. That’s because the amount by which Berkshire’s intrinsic value exceeds book value does not swing wildly from year to year, though it increases in most years. Over time, the divergence will likely become ever more substantial in
absolute terms, remaining reasonably steady, however, on a percentage
basis as both the numerator and denominator of the
business-value/book-value equation increase.”
My question should we took the standard definition of intrinsic value
wholeheartedly: Intrinsic value is the Present value of the investment
of all the expected cash flow over the lifetime
discounted at the appropriate discount rate. Or question the definition
why equity part of asset or at least the current assets minus total
liabilities should be added to this intrinsic value?
In this case the intrinsic value of INSAS is Liquid assets – total liabilities + (CF1/ (1+d)^1) + (CF2/(1+d)^2) + ----- +(CFn/(1+d)^n)
-
Where:
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CF = Cash Flow in the Period
-
d = Discount rate
-
n = The period number
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This Intrinsic value is actually a Discounted Cash Flow (DCF)
-
Example of intrinsic value of INSAS is then the Sum of DCF expected cash flow from varies business streams.
-
For INSAS assets rich case, it is my opinion that the liquid assets
minus total liabilities should be added to this intrinsic value.
What are the liquid assets of INSAS: Refer latest quarterly report:
As of expected cash flow from varies business streams:
I have my utmost respect for INSAS Board and Management for building up
and accumulate so much wealth into INSAS Balance Sheet but I cannot
understand why the Board and management did not do something to unlock
INSAS values?
And I really do not know why INSAS is so undervalued: Closing price at
25/9/2020 of RM 0.76 value the whole of INSAS only at RM 0.76 X
663,006,342 = RM 503,884,819
When only one of it associate compannies: Inari closing price at 25/9/2020 of RM 2.25
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Total (units)
|
554,853,575
|
|
Total (%)
|
17.04
|
|
Date of Notice
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04-Aug-2020
|
Which is worth market value of RM 2.25 X 554,853,575= RM 1,248,420,543
I have said my thought and now you can start to beat me up.
Thank you
Note: During Q4 end 30/6/2020: INSAS sold 5,500,000 Inari shares for RM 9,369,500 cash.
For Q1 end 30/9/2020: INSAS so far already sold 55,000,000 Inari shares for RM 104,906,550 cash.
https://klse.i3investor.com/blogs/Sslee_blog/2020-09-27-story-h1514330026-How_to_value_INSAS.jsp
