Nibong Tebal Paper Mill (NTPM) is one of the better performing stock i have in my portfolio. i actually couldn't really remember since when i bought it. It should be sometime in 2006 because by 2007 i've mentioned it as my choice of stock in an article in Personal Money magazine.
Bumping into the stock itself is sort of a story. One day my relatives in Alor Star asked me whether we should buy its stock. The boss of NTPM (i guess has retired) has sent his photocopy machine to my relatives' shop for repair and along the way he asked my relative to buy the stock, citing that they won't regret buying it. I remembered at that time the stock was trading at about RM0.26. I briefly looked at its data. Its price has just started a strong recovery from the bottom. But i couldn't be sure about whether it worth the buy. I surveyed it for few more months, both in term of stock price as well as its product. Whenever i went to supermarket i see its product dominates the shelves. (for those who don't know, NTPM carries the brand of Premier tissue paper). As time flies and its stock price keep going up, my interest in it grows stronger. After looking at its ROE and dividend yield (back then i heavily depends on this two ratio to judge a stock i wanna buy), i decided i should buy it as one of my portfolio stock. I started buying when it was around RM0.31 (almost the same price nowadays post split. It was as high as RM0.5 just one month ago). There was no turning back afer that. In addition to rather good capital gain, it has constantaly give me a dividend above 8% yearly. Along the way, i have also seen its product growth (capturing more sales, and launching even more product ranges such as sanitary napkins). My friend has also told me that the sales people of NTPM is very 'Geng' and successfully went all out to capture the direct client market such as factories, office and hotels. I don't know how to verify that but i do see quite a number of NTPM tissue paper roll in some office and hotel toilets.
So along the way i keep 'promoting' this stock to my relatives and friends and quite a number of them have bought them and stayed a happy investor. In fact this happen to be a stock that has not only survive the current global stock market collapse, but has in fact goes up in term of stock price while maintaining dividend.
One thing that keeps puzzling me is that the major shareholder has being almost constantly keep buying back the company shares. Another institutional investor, Tabung Haji, are also keep accumulating the stock. Although to me the investment reputation of Tabung Haji is so so, the point that the major shareholder have none stop buying back shares (it has kept happening for more than 1 year already by now) make me feel confident that holding NTPM stock is good.
As such i've never dump its stock. So, to answer my blog title, i will have a long standing BUY call on this stock.....until business situation has really changed for the company. As for now, with a cheap raw material price and a good size of market share plus a resilient consumer product, i see little risk in holding this stock. In fact i should keep buying it.
Table belows list some data for NTPM, for those who are interested to take a closer look onto it. One new thing that i learn from this table is that
the B/S ACCRUALS RATIO has improved over the years. Its sales/cash collected ratio is also improving and is already very healthy (next to no bad debt). Its debt increased a lot in 2007 for factory expansion but has since reduced a bit.
credit goes to my investment friend Calvin Kuek who is the original creator of this table.
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