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Author: Larry01Gott Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3433  
Subject: New Qtr's Analysis of China Five... Date: 8/14/2003 1:43 AM
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...plus Five more, which will include three more China stocks (CHINA, ASIA, & PCNTF), 
plus Omnivision - my #3 rated stock, plus Oracle. Oracle is included because I like 
to include one "Legacy Tech" stock for comparison -- to show how there are so many 
better choices than to get back into the Legacy stocks.

A few comments before, some imbedded within, and some after.

Before: 
I am monitoring PACT -- PacificNet, but this Singapore company has such a poor trail of 
financials, that I am unable to put together the most recent quarter. So for the moment, 
I have left it off the analysis -- but it grades about a 46.0 on the scale of 100.0

I am not yet monitoring the two cellular giants, as I mentioned earlier.

When used, "nmf" means "no meaningful figure" which usually means that it cannot be calculated for 
some mathematical reason.

The stocks are listed from left to right in the order of my overall rating -- which I have put at  
the top and at the bottom for reference.

	                SINA	SOHU	OVTI	NTES	NTE	UTSI	CHINA	ORCL	PCNTF	ASIA
Current Price - 8/13/03	30.03	32.42	41.39	45.31	22.84	41.66	9.05	11.90	6.60	7.22
								
Report Date & Price	
        - 8/8/03	31.98	32.27	42.21	44.34	21.95	38.82	9.10	11.45	6.73	6.74
								
LG system rating	84.93	84.70	81.42	81.25	78.83	73.75	63.01	53.94	41.33	31.11
     100.0 is the perfect stock, 50.0 is average, 0.00 is the poorest possible. 
The 55 fast-growing stocks I monitor average 72.0.
	
Next Qtr P/E Ratio	60.69	54.69	51.48	43.05	19.09	27.73	102.25	24.89	143.54	518.46
     P/E Ratio is the relationship between the stock price (P) and the earnings (E) of the company. 
Generally, the lower the better. But PEG (below) is a much better indicator of both safety and value.
										
Next Qtr PEG	        0.306	0.261	0.274	0.251	0.143	0.335	2.157	5.274	15.291	nmf
     The PEG measures the relationship between the P/E ratio and the growth rate of the company. 
Anything under 1.00 [growth rate higher than P/E] is considered more safe than anything over, and
stocks where the growth rate is twice the P/E ratio or more [PEG under 0.50], are considered even 
more safe, and better valued. The above figures are telling us that all the China Five have PEGs 
under 0.335 [i.e. that the P/E ratio is less than a third of the growth rate], but in comparison, 
that Oracle has a P/E that is !five times! its growth rate. A typical legacy stock.
									
	                SINA	SOHU	OVTI	NTES	NTE	UTSI	CHINA	ORCL	PCNTF	ASIA
Market Capitalization	1663.0	1290.8	1076.4	1449.9	810.0	4829.2	908.2	61326.2	119.7	297.9
      Size of the company as measured by the number of outstanding shares times the current price.
As you could guess, this fluctuates somewhat minute-by-minute.
									
10-qtr Sales 	
& Earning Momentum      100.0	100.0	92.2	100.0	86.1	95.5	82.2	37.7	58.8	-1.6
     Here and right below, a grade of 100.00 means that BOTH the sales AND earnings have exceeded 
every other prior quarter SEQUENTIALLY during the last ten quarters. It says nothing about Y2Y  
percentage gain, only that the earnings and revenues [E & R] continually increased upward. 
A grade of 0.00 means that E & R equally increased and decreased throughout the ten quarters. 
A negative grade indicates more declines than increases.
							
10-qtr profit margin	
 percent momentum      100.0	100.0	87.4	89.2	66.4	60.8	95.6	48.4	59.0	22.2
     Rated as above. This indicates the upward percentage progression of the Profit Margin.
									
	                SINA	SOHU	OVTI	NTES	NTE	UTSI	CHINA	ORCL	PCNTF	ASIA
Next Qtr Profit Margin	37.70%	40.43%	15.14%	52.68%	9.56%	11.01%	15.83%	22.33%	0.60%	1.47%
      All "next qtr" figures here and elsewhere are based on trendlines through the last 
four quarters, plus guidance. Different companies calculate profit margin (net income) somewhat
differently. I have only tried to stay consistent within the company, and not to standardize all 
figures to GAAP or pro forma.
				
Curr Qtr Oper Margin	33.85%	37.82%	22.31%	56.97%	9.34%	13.70%	-0.91%	44.84%	1.14%	-5.20%
     Operating Margin is a little more standardized, being revenues less operating costs.						

Curr Qtr ROE				
(Return-on-Equity)	12.29%	22.80%	18.21%	29.77%	16.23%	19.12%	0.46%	37.10%	2.25%	0.38%
     As I have elsewhere, I may change this to ROIC (Return on Invested Capital) in the future.
Both measure how well your money is working for you. 4 quarters of earnings are divided by the
average shareholder equity in the period being evaluated.
								
Curr Ratio	
(Curr assets/curr liab)	5.45	5.30	5.51	15.10	2.39	1.70	5.46	2.22	1.39	3.83
     Current Ratio tells how much 'buffer' a company has between short term assets (basically 
cash or equivalents, receivables, and inventory), and short-term liabilities (basically 
payables). Note that UTSI gets downgraded here. 
							
                        SINA	SOHU	OVTI	NTES	NTE	UTSI	CHINA	ORCL	PCNTF	ASIA	
Next Qtr Sales Y2Y ROG	196.1%	206.7%	179.2%	127.8%	139.0%	86.4%	49.1%	6.0%	12.1%	-8.0%
     Compare with Curr Qtr just finished below. NTES trending down, NTE & UTSI trending up, 
SINA and SOHU stable. CHINA stretching its wings, Oracle stagnant, PCNTF & ASIA struggling. 
									
Curr Qtr Sales Y2Y ROG	202.3%	216.4%	204.6%	258.7%	123.1%	75.3%	44.1%	2.1%	3.9%	-26.5%

								
Next Qtr	
Price/Sales Ratio	19.01	19.18	7.74	23.09	1.95	3.15	11.79	6.39	1.28	2.68
      Low is good, high is bad. All four portals are off the scale here, negatively. A small 
warning sign among other glittering statistics for the portals.
										
Next Qtr Earn Y2Y ROG	999.90%	999.90%	343.75%	999.90%	113.11%	76.95%	215.15%	39.94%	-46.43%	-5.96%
      999.90% can mean 1) higher than 1000%, or 2)uncalculatable, coming from a loss 
a year ago to a profit this year. Likewise right below.
									
Curr Qtr Earn Y2Y ROG	999.90%	933.33%	281.25%	999.90%	116.98%	53.31%	132.66%	30.79%	-95.45%	-129.17%
										
FREE CASH FLOW Margin	15.75%	22.36%	-6.39%	6.40%	3.27%	-26.77%	17.54%	31.75%	11.55%	17.36%
     As I have said elsewhere, and the Fool states, its hard to grow 100% a year and have good FCF. 
But some of these companies accomplish it. UTSI is downgraded here due to using cash to purchase 
a tremendous amount of inventory. If this is a one-time issue, the FCF should return to positive 
territory next quarter.
									
Equity /Liab ratio	6.15	5.19	4.49	14.57	2.98	0.47	3.10	1.74	1.16	3.13
      The higher the better. That means we as investors have a lot of interest compared to 
small amounts due to creditors. Again UTSI is downgraded, but I think this is also a one-time 
event. We'll look at it closely next qtr.
						
                        SINA	SOHU	OVTI	NTES	NTE	UTSI	CHINA	ORCL	PCNTF	ASIA	
LG system rating	84.93	84.70	81.42	81.25	78.83	73.75	63.01	53.94	41.33	31.11

Well, there you have it. It's late here in Dallas (12:30am), and I'm going to bed.
I'm sure you'll have lots of comments and questions, so let them come!

If this prints wider than the page or wraps around obnoxiously, which it probably will, 
try copying the whole thing and pasting it into Word in a smaller font. But FIRST, try the 
"Format for Printing" Icon below.

Hope this helps you make great decisions on your stock purchases.

Blessings,
Larry


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