APLA.N0000 (ACL Plastics PLC)

ACL Plastics PLC is a company owned by ACL cables. Company was growing steadily in Revenue.

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PAT of the company

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EPS of the company

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Net assets position.

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Dividends per share

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Thank you Mr.YK

Thanks YK. Declining EPS may be the reason for price decline, but dividend & assets grow.

Wondering if this is run by Madanayake's or Mada....rs. Unfair by shareholders.

Thanks Yk

Can anyone elaborate the reason for the price decline of this share from around 230 to 120?

Thanks.

P.S : i have this share in my Portfolio.

EPS has come down for nine months on YoY basis from 39.80 to 13.98...

When earnings decline its natural to see price coming down. However market always over react. 120 is not the value it deserves. So we have to wait until someone notice its an undervalued share.

Further market was not active for a long period other than selective foreign buying counters. Many illiquid shares like REXP have fallen to similar fate.

I think the decline may be related to recent government policy on plastics.

Thank you so much YK and ET for the contribution.

APLA is another typical example that higher NAV is irrelevant to be profitable.
With NAV of Rs. 275 APLA generates only Rs. 17 EPS with an ROE of just 6% whereas a company like REXP with an EPS of Rs. 37 and with an NAV of Rs. 111 generates an ROE of 35%.

What is important is the dynamics of management, product diversification and risk mitigating strategies. REXP is far more superior than APLA and many other companies in this regard.

Another example with very high NAV and average earnings are CDB and ALLI. Compared with VFIN both CDB and ALLI have much higher NAV but when you consider profitability and ROE, VFIN stands the best.

APLA is an another classic example of exploiting minority shareholder rights. Go through the financial statements carefully. I believe management of this company should send to jail.

I saw a senior member promoting this share in the past. No harm on trading these counters depending on the opportunity. But it's my opinion that we should not invest in these companies who does not respect shareholder rights irrespective of the size of holding.

Future123 wrote:APLA is another typical example that higher NAV is irrelevant to be profitable.
With NAV of Rs. 275 APLA generates only Rs. 17 EPS with an ROE of just 6% whereas a company like REXP with an EPS of Rs. 37 and with an NAV of Rs. 111 generates an ROE of 35%.

What is important is the dynamics of management, product diversification and risk mitigating strategies. REXP is far more superior than APLA and many other companies in this regard.

Another example with very high NAV and average earnings are CDB and ALLI. Compared with VFIN both CDB and ALLI have much higher NAV but when you consider profitability and ROE, VFIN stands the best.

REXP may or may not be superior to APLA, but you may have not neccesarily used the correct criteria to justify your value proposition. besides being in different sectors (rubber / export) vs (Plastic / import), ROE should not be the primary financial ratio criteria. When stocks are trading at steep discounts to their book values, your ROI is also important. Thus for APLA, although NAV is Rs 275, you can purchase it for Rs 110, thus if you consider eps as Rs 18, your ROI is 16.4 %. For REXP, considering Market Price of Rs 170, and EPS of 37, your ROI is 21.8 %. 5 % difference in ROI vs 29 % difference in ROE.

In Dividend terms, REXP seems much better as currently almost 10 % yield.

Also remember, that APLA EPS rs 40 a year back n price was Rs 200-230.

Future123 wrote:APLA is another typical example that higher NAV is irrelevant to be profitable.
With NAV of Rs. 275 APLA generates only Rs. 17 EPS with an ROE of just 6% whereas a company like REXP with an EPS of Rs. 37 and with an NAV of Rs. 111 generates an ROE of 35%.

What is important is the dynamics of management, product diversification and risk mitigating strategies. REXP is far more superior than APLA and many other companies in this regard.

Another example with very high NAV and average earnings are CDB and ALLI. Compared with VFIN both CDB and ALLI have much higher NAV but when you consider profitability and ROE, VFIN stands the best.

Future

1)  APLA is in a different sector to REXP.
   You know with your experience they cannot be compared like that right?
   We should compare Apples to Apples. Not Oranges to Apples.

~~~~~~~~~~~

2)  All Construction sector related companies ( AEL, KAPI, LWL, PARQ, APLA, SIRA )
    have come down in price. Only only APLA .
    Some have come down too much due to investor unfriendly environment you yourself
   talked about.

~~~~~~~~~~

3)   Also whether REXP  is superior to APLA or not ( depends on ones favorite share and how
     one compares) ,
    REXP too have come down in earnings and from nearly Rs 300 to Rs 170.
     It is a Fact. That how the market works specially at CSE with people who doesn't know
    what investment is.  
~~~~~~~~~~~~~~

 
4) Lastly the most important questions  I need to ask is  

i)  What is the ROE of LLUB? How does it compare with REXP?
   
b)  If someone is buying shares or doing a private placement , what do they look at?
   
  Why did SHL for example get a private placement  at Rs 24 when it was trading at Rs 14
  with not so great eps and assets.
  Then suddenly recently ( in this dead market) SHL ran from Rs 14 to Rs 25.  
  Why did that happen?


We know  well  shares are valued based on
Assets ,  Earning and other yardsticks when some  of the  mix  don't apply at times.


~~~~~~~~~~~~~~~~~~~~


6)   Also to discuss VFIN favorably , there is no need to put  down
      ALLI and CDB ( which are good fundamental companies  to start with ).

      Now if you compare BLI or COCR to VFIN there is logic  if one  unbiasedly
studies their financials right?

     Do you also remember COCR was trading after massive promotion
    at Rs 70 ( above VFIN price) and some  valued  COCR to Rs 110 one time .
    Now COCR is Rs 43 .  Why?

hariesha wrote:APLA is an another classic example of exploiting minority shareholder rights. Go through the financial statements carefully. I believe management of this company should send to jail.  

I saw a senior member promoting this share in the past. No harm on trading these counters depending on the opportunity. But it's my opinion that we should not invest in these companies who does not respect shareholder rights irrespective of the size of holding.

Hariesha ,

Sha. Am glad after all these years you are now finally concerned about Promoters , Demoters and other cunning people. We should expose them . Let me help you.


Can you name this Senior who promoted APLA to increase price falsely
and  dump on the others? Such people should be exposed right?

But , as we are gentleman we need to be reasonable with proof before we expose/attack
such  I guess.  I hope you agree .

So did this  Senior do the below or not by chance?

1) Did he first talk about it when maybe ACL was Rs 60+ ( before split) and APLA around Rs 80-100?

2) Did he strongly condemn too the ACL management for treating APLA as Bank/Cash cow
  when he talked about APLA before  it ran ?
 
3) Did APLA run to Rs 230 , when it  achieved a Rs 60 eps with NAV os Rs 260+?
   If so that would be a massive gain for people who followed from Rs 100 -230 right?

4)  Did he do an educational post once in way updating APLA  or did he make
    continous posts every other day giving manipulated  FACTS and figures   to
  promote/demote the share for his agenda ?


As you are about to uncover this dirty senior , I just wanted to make sure we are
fair and decent people  so you cover our bases before we do that.

Else it might backfire if you/we don't have facts to show.

Return on Investment Vs. Return on Equity
by Hunkar Ozyasar

Return on equity is an important measure of profitability.

Return on equity is an important measure of profitability.

Return on investment (ROI) and return on equity (ROE) are two critical profitability ratios. These measures are applicable to individual projects, such as the purchase and subsequent sale of a condominium, a small business or a multinational conglomerate. Therefore, it pays to understand ROE and ROI.

Return on Investment

Return on investment equals the net income from a business or a project divided by the total money invested in the venture multiplied by 100. If, for example, you spend $100,000 to open a laundromat and make a net profit of $15,000 in one year, your annual ROI equals $15,000 / $100,000 x 100 = 15 percent. When calculating ROI, the investment will include not only what the investor spent out of pocket, but also all borrowed funds. In the example, the owner might have invested $60,000 out of pocket and secured a loan for $40,000.

Return on Equity

You can calculate ROE by dividing the net income by the equity of the investor and multiplying the result by 100. In the example, the laundromat's owner has an equity stake of $60,000 in the business. So ROE equals $15,000 / $60,000 x 100 = 25 percent. This means that for every dollar of her own money the owner put into the business, she made 25 cents. The ROI of 15 percent, on the other hand, means that for every dollar of combined assets and loans invested, the business yielded a 15 cent average profit.

Interest Expense

When the investment is fully funded by equity and there is no loan involved, the equity and total amount invested are the same. In such cases, the ROI and ROE are also identical. When a loan is involved, however, the ROE will be higher than it would have been without the loan if the additional profit made possible by the loan exceeds the loan's interest expense. Assume you can invest $60,000 and open a small laundromat that will return a $12,000 annual profit. Or, you can borrow $40,000 more and open a far larger laundromat that will net $19,000 profit. You should borrow funds and run a larger business if the interest expense on the loan is less than the $7,000 additional profit made possible by the loan. If it is, your ROE will grow.

Risk

As a general rule, the more you borrow, the greater the potential loss. If the laundromat fails to attract enough customers to justify even a small 900-square-foot store you could have built with $60,000 and you are sitting on a 1,500-square-foot space and now must also pay the bank interest every month, you are looking at a disastrous scenario. Not only did a bigger business fail to yield more money, but now your costs for rent, upkeep and -- most importantly -- interest expense are far greater. This is why borrowing funds to grow your operations is often referred to as leverage; borrowed funds leverage -- or magnify -- profits if things go well, but they will multiply losses if things turn south.

This forum is for genuine professionals & students of investment/trade in stocks and not for manipulators. We should make use of facts and professional ratios in that regard.

It appears that some use irrelevant or wrong facts to compare ROE & ROI of certain shares. This is a dangerous trend & misleading the genuine investor/trader.

Ethical Trader wrote:This forum is for genuine professionals & students of investment/trade in stocks and not for manipulators. We should make use of facts and professional ratios in that regard.

It appears that some use irrelevant or wrong facts to compare ROE & ROI of certain shares. This is a dangerous trend & misleading the genuine investor/trader.  

ET, when i mentioned ROI, I meant personal Return on Investment (ROI) vs Company Return on Equity. This is meant to compare returns taking into account undervalued NAV. the point being that it could look heftily undervalued when compared on Company ROE basis, but differential is narrowed and another story when you compare on your own personal Return of Investment, which takes into account Market Price of Equity VS ROE, which takes int account Book Value of Equity.

Let me put my thought on this personal ROI

When an investor buys a share he outlay cash from his pocket. To calculate the return he should take what comes to his pocket from his investment..

What comes to his pocket is dividend and capital gain..

So the calculation for the Personal ROI should be.

Dividend+capital gain/ price paid for the share.

Company EPS does not belong to the investor, it goes to company bank account. what investor gets from the company is only dividend..

malanp wrote:Let me put my thought on this personal ROI

When an investor buys a share he outlay cash from his pocket. To calculate the return he should take what comes to his pocket from his investment..

What comes to his pocket is dividend and capital gain..

So the calculation for the Personal ROI should be.

Dividend+capital gain/ price paid for the share.

Company EPS does not belong to the investor, it goes to company bank account. what investor gets from the company is only dividend..

you are right but you misunderstood my point.
i was just comparing company roe vs personal roi. even for roe, you dont get the return,  the company does.

so if rexp makes 37 rupees a share, nav is 130, market price is 170, your return costs 37/170. although the companies roe is  much higher at 37/130. in either instance, your actual return is only the dividend.

Good discussion. Unfortunately, CSE is dead for over 3 years with massive negative returns and not sure these ratios are relevant in anyways in a dead market like CSE to make any investment decisions.

There is absolutely no doubt that many shares are trading at more than 50% discount to its fair vale. Eg: LFIN, CDB, VFIN, ALLI, REXP, TKYO, APLA, CFIN, SAMP and many others.

Now the trend is to pick one or two shares a week and push it up and dispose it without any fundamental backing. people who buy before the manipulation wins and people who buy at the end of the manipulation get caught.

First we should have a stable government with a clear vision for the country and economy. Until that happens, it's very unlikely that we come anyway near the valuation of our regional markets.

Keep the spirit guys and hold on to your valuable counters and at some point we will win.

I fully agree with you & SLS in this regard. Appreciate your contributions on practical terms.

The Alchemist wrote:

malanp wrote:Let me put my thought on this personal ROI

When an investor buys a share he outlay cash from his pocket. To calculate the return he should take what comes to his pocket from his investment..

What comes to his pocket is dividend and capital gain..

So the calculation for the Personal ROI should be.

Dividend+capital gain/ price paid for the share.

Company EPS does not belong to the investor, it goes to company bank account. what investor gets from the company is only dividend..

you are right but you misunderstood my point.
i was just comparing company roe vs personal roi. even for roe, you dont get the return,  the company does.

so if rexp makes 37 rupees a share, nav is 130, market price is 170, your return costs 37/170. although the companies roe is  much higher at 37/130. in either instance, your actual return is only the dividend.

slstock wrote:

hariesha wrote:APLA is an another classic example of exploiting minority shareholder rights. Go through the financial statements carefully. I believe management of this company should send to jail.  

I saw a senior member promoting this share in the past. No harm on trading these counters depending on the opportunity. But it's my opinion that we should not invest in these companies who does not respect shareholder rights irrespective of the size of holding.

Hariesha ,

Sha. Am glad after all these years you are now finally concerned about Promoters , Demoters and other cunning people. We should expose them . Let me help you.


Can you name this Senior who promoted APLA to increase price falsely
and  dump on the others? Such people should be exposed right?

But , as we are gentleman we need to be reasonable with proof before we expose/attack
such  I guess.  I hope you agree .

So did this  Senior do the below or not by chance?

1) Did he first talk about it when maybe ACL was Rs 60+ ( before split) and APLA around Rs 80-100?

2) Did he strongly condemn too the ACL management for treating APLA as Bank/Cash cow
  when he talked about APLA before  it ran ?
 
3) Did APLA run to Rs 230 , when it  achieved a Rs 60 eps with NAV os Rs 260+?
   If so that would be a massive gain for people who followed from Rs 100 -230 right?

4)  Did he do an educational post once in way updating APLA  or did he make
    continous posts every other day giving manipulated  FACTS and figures   to
  promote/demote the share for his agenda ?


As you are about to uncover this dirty senior , I just wanted to make sure we are
fair and decent people  so you cover our bases before we do that.

Else it might backfire if you/we don't have facts to show.

Happy that you agree with me and terming it as a trading opportunity. We should use these words. There are lot who follow you. I don't have time to go through the entire thread again, but as I can recall lot of people were discussing on investing on APLA when it was above 200/- with lot of optimism. By using the term trading opportunity, it clearly indicates get in early and get out early.

Look at the latest financials. Isn't it a crime.