Help me evaluate this investment

[RISP]

What you seem to be asking for overall is for someone to do some footwork investigating this company in depth and then to argue on the basis of their footwork.

You don't say. What tipped you off -the title of the thread ("Help me evaluate this investment")? The sentence "If anybody enjoys this kind of exercise, I would be glad if you shared some insights"? The fact that I linked financial statements?

[...] I have no interest in that exercise. [...]

Wait a second, let me get that straight. So what you are saying is, you come here with a list of questions the size of the SAT test, and after I dutifully work through all of them in great detail, you tell me that you never had any intention to provide some useful input of your own? That's incredibly rude.

My equity in a company is what the stock trades at.

You have every right to dream up your own reality, but I'm not going to argue with somebody who does not understand the difference between market cap and book value. Good day.

 

[RISP]

What you're asking me to do is not something that I am comfortable as an individual investor in doing, and that is investing based on earnings projections.

Thanks for your two posts nash. I'm still trying to wrap my head around the above sentence. What else than a projection of the future would you base an investment decision on? The past is already priced in, isn't it?

Looking into and attempting to project the future is the very definition of "speculation".

I probably shouldn't even argue that point, because I fully agree that DL is currently a speculative buy. Still, I think this is too narrow. Wikipedia defines speculation as "the purchase of a good with the hope that it will become more valuable at a future date". And according to Ben Graham in The Intelligent Investor, "some speculation is necessary and unavoidable, for in many common-stock situations, there are substantial possibilities of both profit and loss, and the risks therein must be assumed by someone."

As a value investor, which I fully understand you may not be, this issue doesn't pass the sniff test of even a cursory evaluation and I would personally stay away.

What measures, in your opinion, should a value investor look at, and what are the criteria to judge them? Is it P/E<x , P/B<y and so on, or something entirely different?

 

[Lucantes]

You don't say. What tipped you off -the title of the thread ("Help me evaluate this investment")? The sentence "If anybody enjoys this kind of exercise, I would be glad if you shared some insights"? The fact that I linked financial statements?
Wait a second, let me get that straight. So what you are saying is, you come here with a list of questions the size of the SAT test, and after I dutifully work through all of them in great detail, you tell me that you never had any intention to provide some useful input of your own? That's incredibly rude.
You have every right to dream up your own reality, but I'm not going to argue with somebody who does not understand the difference between market cap and book value. Good day.

He he he...gotta say RISP your responses made me laugh!
I mean I know nothing about what you are asking, which is why I haven't commented or contributed......

 

[4nursebee]

Doing what you want is unreasonable.

A simple analogy or comparison. I am out shopping at a mass retailer and a total stranger asks for help car shopping, lists a few simple things about the car they like. Am I going to go to the car lot to look at the car, drive the car, read the literature, thoughtfully consider the appropriateness of the car for myself or for them? No.

Now if this stranger and I are in the checkout line, perhaps we might casually converse about such a thing. But if the stranger that has asked for help has a counter argument for every point raised and is upset I won't go kick the tires on their car consideration, I might stop engaging in conversation and perhaps even switch lines.

 

[RISP]

He he he...gotta say RISP your responses made me laugh!

Thanks, then not all was in vain.

 

[RISP]

Doing what you want is unreasonable.

A simple analogy or comparison. I am out shopping at a mass retailer and a total stranger asks for help car shopping, lists a few simple things about the car they like. Am I going to go to the car lot to look at the car, drive the car, read the literature, thoughtfully consider the appropriateness of the car for myself or for them? No.

Now if this stranger and I are in the checkout line, perhaps we might casually converse about such a thing. But if the stranger that has asked for help has a counter argument for every point raised and is upset I won't go kick the tires on their car consideration, I might stop engaging in conversation and perhaps even switch lines.

Trust me, I'm much more amused than upset.

I didn't ask you specifically; I posted a polite request in an online discussion forum literally called "Stock Picking and Market Strategy". To stay in your analogy, I held up a sign asking for help near the check-out cashier. At a podium discussion about cars, not a mass retailer, by the way.
Now, telling the stranger with the sign "no thanks" is perfectly fine.
Walking by them ignoring them is perfectly fine (about 99.96% of the members on this board choose that option by just not posting in this thread).
Engaging the stranger in a conversation, asking them a ton of questions, and then AFTER THEY JUMP THROUGH ALL YOUR HOOPS telling them "f*ck you and your stupid sign, I never wanted to help you in the first place" is, in my humble opinion, inappropriate.

I might stop engaging in conversation and perhaps even switch lines.

I would be really grateful if you could just do that.

 

[RISP]

What else could you do with this money instead? For instance, suppose for some reason you were prohibited from ever buying this stock. What would you do with the money?

Just noticed that I have not replied to your post yet, sorry. It's in the fun money account, so I'd say hookers and blow.

No seriously, I would of course look for some other stock to buy. But if we go down that slippery slope, we need to analyze and compare SEVERAL investments. Given the results so far, what's the chance of that ever happening?

 

[gayl]

I don't investing in anything under $5 a share and this is only trading about 800 shares a day . So if I was to buy it I'd be the only one buying. Do you know why it can't cost $5?

 

[gayl]

Making this as clear as possible. I just got caught by a thinly traded exchange traded fund which delisted 2 days ago and I was trying to figure out why it didn't sell since it met my limit order. I discovered it Dlisted when I was attempting to reenter that sell limit order. In addition to not trading anything that trades under $5 a share I am now instituting a personal policy where I will not trade anything that is as thinly traded as this stock or the one of mine traded thst thinly after I stopped watching it and Dlisted. I advise you to do similar. Although the $400 that you would stick into this is basically the cost of a large dinner out.

 

[nash031]

Thanks for your two posts nash. I'm still trying to wrap my head around the above sentence. What else than a projection of the future would you base an investment decision on? The past is already priced in, isn't it?





I probably shouldn't even argue that point, because I fully agree that DL is currently a speculative buy. Still, I think this is too narrow. Wikipedia defines speculation as "the purchase of a good with the hope that it will become more valuable at a future date". And according to Ben Graham in The Intelligent Investor, "some speculation is necessary and unavoidable, for in many common-stock situations, there are substantial possibilities of both profit and loss, and the risks therein must be assumed by someone."





What measures, in your opinion, should a value investor look at, and what are the criteria to judge them? Is it P/E<x , P/B<y and so on, or something entirely different?

Sure, PE is a metric to look at to help determine value. I typically stay away from smaller stocks in the individual realm. Things I look at are very Grahamian: market cap, dividend payment, debt to assets, etc. Key also is: Do I understand enough about how these guys make their money? Does their risk statement make sense and do I understand the factors affecting their business?

In the case of the company you asked for analysis, I've provided one simple go-no-go: the recent stop and start of the dividend, and particularly starting at a rate which seems unwarranted and unsustainable to me on first glance.

Others: Market cap is too small. Earnings record - yes, I'd rather look at that than analyst projections, not understanding the business... There may be others, I didn't dig terribly deep into it after a cursory look.

Hope that helps explain.

 

[nash031]

I should say, PE based on historical earnings, not earnings projections, is valid IMO.

 

[RISP]

Time for a quick update! Delta Lloyd climbed steadily to around 4.10€ over the last weeks, also paying a 0.10€ interim dividend in September, which I took in stocks rather than cash. This morning, Dutch insurer NN Group announced a plan to take over Delta Lloyd, offering 5.30€ per share.

The stock is currently trading at 5.34€, an increase of ~58% since I started this thread (including dividends). I'm feeling pretty smart right now.

 

[nash031]

I'm glad it is working out for you!

 

[RISP]

Update: NN Group have increased their takeover offer to 5.40€ per share, which I accepted today.