DIVERSIFIED HOLDINGS SECTOR

I observed that out of 7 companies in the diversified sector, prices of CARS,CTHR,CFLB & HAYL have been significantly appreciated recently.
Other 3 companies are JKH,HHL & SPEN. We all know that all these are fundamentally very strong companies. I feel these 3 have been silent and stagnating for too long now. Current prices looks to be very attractive to be collected .
When do you all think that these will start moving & what are your barriers for these ??
Please share your thoughts, thanks in advance .....

Well I was a big fan of CARS and made a lot of profit out of it.. However what I have noticed in CARS is, just after a split there is big tendency of being stagnated at a certain price level(Right now itz 540-570)...

I personally do not think CARS will go up soon.. This is based on previous observation and not based on any financial analysis.. There is always a possibility of going against all odds.

CARS was a marvelous share if u know its history.. how many sub divisions it has come across and how many times it has gone up.. I think ppl who have been keeping this in their portfolios are rather millionours now.. We can never predict how and when this would start moving.. All the CARSONS group companies have this priviledge.. I think even CINV is now at a discount..

What do you think about HHL,JKH & SPEN ? Don't you all think that it's the right time for these big guns to start shooting ??

i was a fan of HHL but it was stagnating for a looooong period...so i had to sell around two months back to cover up the opportunity costs...

i may re-enter..but why this is stagnating ...

smallville wrote:CARS was a marvelous share if u know its history.. how many sub divisions it has come across and how many times it has gone up.. I think ppl who have been keeping this in their portfolios are rather millionours now.. We can never predict how and when this would start moving.. All the CARSONS group companies have this priviledge.. I think even CINV is now at a discount..

It really is.. I made huge gains out of it..But my adviser and some of the learned members of this forum told me through a post I have posted that it would not move sooner since the big buyers have not yet entered the market..My PERSONAL view is that there is a huge opportunity cost so better sell of, gain some money and reinvest in CARS..

smallville wrote:CARS was a marvelous share if u know its history.. how many sub divisions it has come across and how many times it has gone up.. I think ppl who have been keeping this in their portfolios are rather millionours now.. We can never predict how and when this would start moving.. All the CARSONS group companies have this priviledge.. I think even CINV is now at a discount..

BUKI and JKH as well. CARS and CINV are two of the best quality shares. You know how to spot some of the best value shares. They are not very popular and attractive and the movements are slow, these shares move slowly based on corporate earnings and future growth potential. You know how to recognized best shares we have a great respect and confidence on your analysis. Thanks for disclosure of your shares without having any reservation.

Why no RHL in the sector . Until today it has not appreciated almost at all for its performance.

Price EPS P/E
FORT LAND 410 20.6 19.90
RICHARD PIERIS 14 0.7 20.00
SUNSHINE HOLDING 45 2 22.50
HEMAS HOLDINGS 46.1 1.8 25.61
JKH 275 9.1 30.22
FINLAYS COLOMBO (+) 325.1 10.4 31.26
AITKEN SPENCE 168 4 42.00
CARSONS 669.9 14.6 45.88
HAYLEYS 385 7.7 50.00
C T HOLDINGS 211 3.7 57.03

Sector PE = 24.9

CFLB, RICH are trading at discounted price. We will wait see...

I was surprised to see CFLB not moving even after they announced a SPLIT.

CSEC also belongs to above category.

CSEC 13.40
EPS Latest Cum : 8.1
PE : 1.6 (lowest among the sector)
PBV: 1.3 (Highest in the sector)

Sector summery: (From LSL report)
Diversified Holdings
Conglomerates posted an earnings growth of 30.8%YoY (Sep quarter: 186.8%YoY) and ‐10.4%QoQ (mainly due to the nonrecurring items recorded in counters such as JKH in Sep quarter). Excluding the non‐recurring items in Dunamis Capital, Sun Shine Holdings, the quarter profit growth is 22.1%YoY. Apart from Carsons, Hayleys and Sunshine Holdings other companies recorded notable growth in profits during the period. Premier blue‐chip John Keells Holdings, Carsons Cumberbatch and Richard Pieirs were the top earners in the sector.

dmjesua wrote:Price EPS P/E
FORT LAND 410 20.6 19.90
RICHARD PIERIS 14 0.7 20.00
SUNSHINE HOLDING 45 2 22.50
HEMAS HOLDINGS 46.1 1.8 25.61
JKH 275 9.1 30.22
FINLAYS COLOMBO (+) 325.1 10.4 31.26
AITKEN SPENCE 168 4 42.00
CARSONS 669.9 14.6 45.88
HAYLEYS 385 7.7 50.00
C T HOLDINGS 211 3.7 57.03

Sector PE = 24.9

CFLB, RICH are trading at discounted price. We will wait see...

Yes, Diversified sector and a diversified portfolio seem to be the best choice at this stage, market would recover on those lines next week onwards. BRWN, DIST as well.

amjad wrote:I was surprised to see CFLB not moving even after they announced a SPLIT.

same here. i cant understand...

chamith wrote:

amjad wrote:I was surprised to see CFLB not moving even after they announced a SPLIT.

same here. i cant understand...

IPO refunds next week would improve the situation.

Where is RHL ? A major group at that!

Rajitha wrote:Where is RHL ? A major group at that!

According to www.CSE.lk (Listed companies by sector) RHL belongs to Investment Trusts.

dmjesua wrote:Price EPS P/E
FORT LAND 410 20.6 19.90
RICHARD PIERIS 14 0.7 20.00
SUNSHINE HOLDING 45 2 22.50
HEMAS HOLDINGS 46.1 1.8 25.61
JKH 275 9.1 30.22
FINLAYS COLOMBO (+) 325.1 10.4 31.26
AITKEN SPENCE 168 4 42.00
CARSONS 669.9 14.6 45.88
HAYLEYS 385 7.7 50.00
C T HOLDINGS 211 3.7 57.03

Sector PE = 24.9

CFLB, RICH are trading at discounted price. We will wait see...

Hi dmjesua
Where did you get this details. Because according my calculation I get different PE ratio for each companies.

Guys, correct me if I am wrong

Period --> Profit --> EPS
HHL
03/2010 --> 385.66 Mn --> EPS 0.66 (3.31 - Before split)
06/2010 --> 318.58 Mn --> EPS 0.57 (2.86 - Before split)
09/2010 --> 314.37 Mn --> EPS 0.58
12/2010 --> 341.45 Mn --> EPS 0.61

Total profit --> 1,360.06 Mn
Annual EPS = 2.42
Current Price = 46/-
Annual PE ratio (46/2.42) = 19

NAV = 16.58

No of shares Issued - 512,040,620
Public Holdings - 28.05%

JKH
03/2010 --> 3,012.11 Mn --> EPS 4.59
06/2010 --> 1,076.87 Mn --> EPS 1.63
09/2010 --> 3,038.32 Mn --> EPS 4.70
12/2010 --> 2,027.07 Mn --> EPS 2.82

Total profit --> 9,154.36 Mn
Annual EPS = 13.74
Current Price = 275/-
Annual PE ratio (275/13.74) = 20.1

NAV = 87.64

No of shares Issued - 623,684,247
Public Holdings - 73.10%

SPEN
03/2010 --> 1,092.56 Mn --> EPS 1.90 (28.51 - Before split)
06/2010 --> 601.18 Mn --> EPS 1.08 (16.24 - Before split)
09/2010 --> 816.64 Mn --> EPS 1.49 (22.41 - Before split)
12/2010 --> 775.32 Mn --> EPS 1.43

Total profit --> 3285.70 Mn
Annual EPS = 5.9
Current Price = 168/-
Annual PE ratio (168/5.9) = 28.47

NAV = 50.90

No of shares Issued - 405,996,045
Public Holdings - 53.91%

RICH
03/2010 --> 443.59 Mn --> EPS 0.17 (2.58 - Before split)
06/2010 --> 343.38 Mn --> EPS 0.21
09/2010 --> 534.81 Mn --> EPS 0.22
12/2010 --> 791.59 Mn --> EPS 0.32

Total profit --> 2113.37 Mn
Annual EPS = 0.92
Current Price = 14/-
Annual PE ratio (14/0.92) = 15.21

NAV = 2.41

No of shares Issued - 1,936,841,535
Public Holdings - 44.81%

SUN
03/2010 --> 238.57 Mn --> EPS 0.63
06/2010 --> 225.90 Mn --> EPS 0.87
09/2010 --> 79.34 Mn --> EPS 0.42
12/2010 --> 294.05 Mn --> EPS 0.70

Total profit --> 837.85 Mn
Annual EPS = 2.62
Current Price = 45/-
Annual PE ratio (45/2.62) = 17.17

NAV = 15.47

No of shares Issued - 405,996,045
Public Holdings - 8.46%

HAYL
03/2010 --> 1,337.16 Mn --> EPS 12.58
06/2010 --> 340.37 Mn --> EPS 2.01
09/2010 --> 489.61 Mn --> EPS 4.53
12/2010 --> 13.79 Mn --> EPS 1.20

Total profit --> 2180.92 Mn
Annual EPS = 20.32
Current Price = 385/-
Annual PE ratio (385/20.32) = 18.94

NAV = 210.17

No of shares Issued - 75,000,000
Public Holdings - 49.30%

CTHR
03/2010 --> 435.84 Mn --> EPS 0.32
06/2010 --> 200.39 Mn --> EPS 0.54
09/2010 --> 413.96 Mn --> EPS 1.16
12/2010 --> 746.46 Mn --> EPS 1.97

Total profit --> 1796.65 Mn
Annual EPS = 3.99
Current Price = 211/-
Annual PE ratio (211/3.99) = 52.88

NAV = 51.38

No of shares Issued - 170,348,920
Public Holdings - 34.73%

CFLB
03/2010 --> 456.27 Mn --> EPS 7.82
06/2010 --> 314.95 Mn --> EPS 5.12
09/2010 --> 252.24 Mn --> EPS 3.70
12/2010 --> 834.16 Mn --> EPS 11.83

Total profit --> 1857.62 Mn
Annual EPS = 28.47
Current Price = 410/-
Annual PE ratio (410/28.47) = 14.40

NAV = 89.56

No of shares Issued - 36,000,000
Public Holdings - 37.22%

JFIN
03/2010 --> 139.21 Mn --> EPS 3.98
06/2010 --> 50.45 Mn --> EPS 1.44
09/2010 --> 90.45 Mn --> EPS 2.58
12/2010 --> 84.51 Mn --> EPS 2.41

Total profit --> 364.62 Mn
Annual EPS = 10.41
Current Price = 325/-
Annual PE ratio (325/10.41) = 31.21

NAV = 147.04

No of shares Issued - 35,000,000
Public Holdings - 3.45%

Monster wrote:

dmjesua wrote:Price EPS P/E
FORT LAND 410 20.6 19.90
RICHARD PIERIS 14 0.7 20.00
SUNSHINE HOLDING 45 2 22.50
HEMAS HOLDINGS 46.1 1.8 25.61
JKH 275 9.1 30.22
FINLAYS COLOMBO (+) 325.1 10.4 31.26
AITKEN SPENCE 168 4 42.00
CARSONS 669.9 14.6 45.88
HAYLEYS 385 7.7 50.00
C T HOLDINGS 211 3.7 57.03

Sector PE = 24.9

CFLB, RICH are trading at discounted price. We will wait see...

Hi dmjesua
Where did you get this details. Because according my calculation I get different PE ratio for each companies.

Guys, correct me if I am wrong

Period --> Profit --> EPS
HHL
03/2010 --> 385.66 Mn --> EPS 0.66 (3.31 - Before split)
06/2010 --> 318.58 Mn --> EPS 0.57 (2.86 - Before split)
09/2010 --> 314.37 Mn --> EPS 0.58
12/2010 --> 341.45 Mn --> EPS 0.61

Total profit --> 1,360.06 Mn
Annual EPS = 2.42
Current Price = 46/-
Annual PE ratio (46/2.42) = 19

NAV = 16.58

No of shares Issued - 512,040,620
Public Holdings - 28.05%

JKH
03/2010 --> 3,012.11 Mn --> EPS 4.59
06/2010 --> 1,076.87 Mn --> EPS 1.63
09/2010 --> 3,038.32 Mn --> EPS 4.70
12/2010 --> 2,027.07 Mn --> EPS 2.82

Total profit --> 9,154.36 Mn
Annual EPS = 13.74
Current Price = 275/-
Annual PE ratio (275/13.74) = 20.1

NAV = 87.64

No of shares Issued - 623,684,247
Public Holdings - 73.10%

SPEN
03/2010 --> 1,092.56 Mn --> EPS 1.90 (28.51 - Before split)
06/2010 --> 601.18 Mn --> EPS 1.08 (16.24 - Before split)
09/2010 --> 816.64 Mn --> EPS 1.49 (22.41 - Before split)
12/2010 --> 775.32 Mn --> EPS 1.43

Total profit --> 3285.70 Mn
Annual EPS = 5.9
Current Price = 168/-
Annual PE ratio (168/5.9) = 28.47

NAV = 50.90

No of shares Issued - 405,996,045
Public Holdings - 53.91%

RICH
03/2010 --> 443.59 Mn --> EPS 0.17 (2.58 - Before split)
06/2010 --> 343.38 Mn --> EPS 0.21
09/2010 --> 534.81 Mn --> EPS 0.22
12/2010 --> 791.59 Mn --> EPS 0.32

Total profit --> 2113.37 Mn
Annual EPS = 0.92
Current Price = 14/-
Annual PE ratio (14/0.92) = 15.21

NAV = 2.41

No of shares Issued - 1,936,841,535
Public Holdings - 44.81%

SUN
03/2010 --> 238.57 Mn --> EPS 0.63
06/2010 --> 225.90 Mn --> EPS 0.87
09/2010 --> 79.34 Mn --> EPS 0.42
12/2010 --> 294.05 Mn --> EPS 0.70

Total profit --> 837.85 Mn
Annual EPS = 2.62
Current Price = 45/-
Annual PE ratio (45/2.62) = 17.17

NAV = 15.47

No of shares Issued - 405,996,045
Public Holdings - 8.46%

HAYL
03/2010 --> 1,337.16 Mn --> EPS 12.58
06/2010 --> 340.37 Mn --> EPS 2.01
09/2010 --> 489.61 Mn --> EPS 4.53
12/2010 --> 13.79 Mn --> EPS 1.20

Total profit --> 2180.92 Mn
Annual EPS = 20.32
Current Price = 385/-
Annual PE ratio (385/20.32) = 18.94

NAV = 210.17

No of shares Issued - 75,000,000
Public Holdings - 49.30%

CTHR
03/2010 --> 435.84 Mn --> EPS 0.32
06/2010 --> 200.39 Mn --> EPS 0.54
09/2010 --> 413.96 Mn --> EPS 1.16
12/2010 --> 746.46 Mn --> EPS 1.97

Total profit --> 1796.65 Mn
Annual EPS = 3.99
Current Price = 211/-
Annual PE ratio (211/3.99) = 52.88

NAV = 51.38

No of shares Issued - 170,348,920
Public Holdings - 34.73%

CFLB
03/2010 --> 456.27 Mn --> EPS 7.82
06/2010 --> 314.95 Mn --> EPS 5.12
09/2010 --> 252.24 Mn --> EPS 3.70
12/2010 --> 834.16 Mn --> EPS 11.83

Total profit --> 1857.62 Mn
Annual EPS = 28.47
Current Price = 410/-
Annual PE ratio (410/28.47) = 14.40

NAV = 89.56

No of shares Issued - 36,000,000
Public Holdings - 37.22%

JFIN
03/2010 --> 139.21 Mn --> EPS 3.98
06/2010 --> 50.45 Mn --> EPS 1.44
09/2010 --> 90.45 Mn --> EPS 2.58
12/2010 --> 84.51 Mn --> EPS 2.41

Total profit --> 364.62 Mn
Annual EPS = 10.41
Current Price = 325/-
Annual PE ratio (325/10.41) = 31.21

NAV = 147.04

No of shares Issued - 35,000,000
Public Holdings - 3.45%

Monster:

I have not checked each details but your calculation looks accurate.

DMJESUA

I think you areonly taking 9 month EPS to caclculate PE. You should take 12 months EPS either forward or trailing.

Thanks, all those shares in the Diversified sector look like having good prospects. What about the banking sector shares, they also registered good profits. Fundamentally speaking Diversified and banking sector is ideal. Plantations, ports and construction also good at current bargain prices I suppose. These shares can give a better return than IPO etc. interest rates are also low.

STOCKS Classified under Diversified Holding Sector
JKH, HAYL, SPAN, HHL, CARS, CTHR, RICH
SUN, CFLB, CSEC, JFIN, FLCH

OTHER Stocks - Classified under sectors other than Diversified Holdings
ERI (GREG)
CIC Holdings (CIC)
LOLC Holdings (LOLC)
Renuka Holdings (RHL)
Lankem Ceylon (LCEY)
DIST
BRWN

Sector Classification is important as we usually compare SECTOR PER to decide Undervalue or Overvalue statues of a particuler stock, as those are more representative than MARKET PER.
What my observation was some stocks classified under DIVERSIFIED HOLDING SECTOR has not been much diversified, which is sometimes misleading.
The classic example is FLCH (Free Lanka Capital Holdings) .... 97% Revenue & over 90% profits from PLANTATION business. Then, is it Diversified Holding Company or Plantation Holding Company (like MPRH)??
If Sector PER
Diversified = 24.5
Plantation = 9.8
and FLCH = 10.9 -- Is is undervalued?

I have not analysed all other Diversified Stocks, but noticed that some other stocks classified under diffrent sectors having relatively more diversifications. i.e. DIST, LOLC, CIC, GREG, .... etc.

Experts ..... Should there be any criteria to classify stocks??



Decleration : This is not a negative comments on FLCH. I have FLCH in my portfolio and still worth to me at current level of 5/- (as it is the IPO price)

factFINDER wrote:STOCKS Classified under Diversified Holding Sector
Sector Classification is important as we usually compare SECTOR PER to decide Undervalue or Overvalue statues of a particuler stock, as those are more representative than MARKET PER.
What my observation was some stocks classified under DIVERSIFIED HOLDING SECTOR has not been much diversified, which is sometimes misleading.
The classic example is FLCH (Free Lanka Capital Holdings) .... 97% Revenue & over 90% profits from PLANTATION business. Then, is it Diversified Holding Company or Plantation Holding Company (like MPRH)??
If Sector PER
Diversified = 24.5
Plantation = 9.8
and FLCH = 10.9 -- Is is undervalued?

I have not analysed all other Diversified Stocks, but noticed that some other stocks classified under diffrent sectors having relatively more diversifications. i.e. DIST, LOLC, CIC, GREG, .... etc.

Experts ..... Should there be any criteria to classify stocks??



Decleration : This is not a negative comments on FLCH. I have FLCH in my portfolio and still worth to me at current level of 5/- (as it is the IPO price)

You are absolutely correct in pointing out this. However, one thing about the CSE and the PLC's are that they are perpetually in a state of evolution. Today they are Finance Companies and they next day they are into Palm Oil Plantations. One is a Hotelier and then they do the job of an Investment and Fund Manager by investing in the CSE with the monies of share holders who originally invested in the Hospitality Sector. These people do not stick to the articles of association at all. Who checks these things, huh?

Companies have the sole authority to decide their diversification strategy.. One can go for 99.9% plantations and rest .1% on anything else and vice versa..
Companies do so to generate revenue in the sectors they've identified potential and the sectors they can manage well.. If u know wat I mean, its not easy to manage plantation sector rite?

Again, all companies go thru difficult times.. we cant expect companies to have QoQ, YOY growth if natural perils, economic policies change, but they need to pay the salaries of employees so companies can engage in investment activities from their money if it generates additional revenue for them.. I do not see any issue wit these in fact I see its a strong strategy for not letting down the employees as well as investors..

Also on a more stronger outlook, companies can invest in other companies in long term to reap the benefits in time.. additionally they do this in their competitors to know the strategies used by them cuz wats most businesses are looking at is competitive advantage over others to continue to grow and increase or hold on to the market share of their business..

Sometimes these diversified companies may not be real diversified holders but these have been listed under diversified sector cuz they do engage in multi no of businesses

smallville wrote:

Sometimes these diversified companies may not be real diversified holders but these have been listed under diversified sector cuz they do engage in multi no of businesses

This is just to clarify my privious post.

I did not comment on the "right to diversify" each of those stocks, true it's up to respective management to decide. Also, I didn't want to discriminate one sector over other. (sorry, if my wordings meant that).

But, my concern was on "comparability" issues that can be experienced in current classifications, specially under DIVERSIFIED HOLDING Sector. Further, if such classifications are purely based on the request of individual companies, merely coz they're in more than one business.... It is not an impossibility to re-classify half of the existing stocks in under DIVERSIFIED HOLDING Sector, which usually in higher valuation plane. Such representations are possibly deteriorate usefulness sector indicators.

Again, this is not an attempt to let-down FLCH (as I'm a fan of FLCH at current price level) but I noticed this issue when I was analysing their financials.

hey,
i am on my academic research (firm diversification and performance in listed diversified holdings). i am confused when i checked with CSE, in the diversified sector only 11 companies are there. but when i go through each company i found further vallibel one plc, browns investments too categarized in diversified sector. some one please recommend me where i can find the right details

hey,
i am on my academic research (firm diversification and performance in listed diversified holdings). i am confused when i checked with CSE, in the diversified sector only 11 companies are there. but when i go through each company i found further vallibel one plc, browns investments too categarized in diversified sector. some one please recommend me where i can find the right details