as can be seen from previous post, haio dividend growth is pretty high. however, to be slightly more conservative, lets take the dividend growth rate,g=0.05 (means 5%)
my required return,r=10%=0.1, D0=current dividend=RM0.42
using this
price=D0(1+g)/(r-g)
=42*(1+0.05)/(0.1-0.05)
=882
so Haio is worth RM8.82 :)
if taking r=15% (a more realistic value)
price=RM4.41
but this price might never reach.
the beauty and ugly part of the model is that there is presumption
so, let's change again
PV=42*(1+0.08)/(0.15-0.08)=42*(1+0.08)/(0.15-0.08)=6.48
if haiO next year cant give me 8% growth,
then I will sell the share if i buy now
means final div + interim div is 45.36 cent
and eps growth at least 8%*1.2 = 9.6% with 20% buffer
today, haio up 6% so far, reaching as high as RM6.7
just now i was haste, i thought it might not go to RM6.48 again, so, i buy in at RM6.59 if it turns out i am wrong and the stock plunge again, i take same approach, wait until it is up again, then consider buy in or not
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3 comments:
very keng, i think gotto attend cfp...
i did make a decison too haste
it went down to RM6.45 as of noon
i will wait till end of the day to see
return,r is the value gain?
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