Friday, April 19, 2013

MARCO Groups - Fundamental Strong, Cash Rich and High Dividend Yield

Recently, I have been searching for fundamentally strong company. Why fundamental strong company at this uncertain times? Well, fundamental strong company tends to play well in uncertain times especially in down trend because they are more resilient to price drop.

Fundamentally strong company will be have sustainable stock price as compared to fundamentally weak company. So, I came across an interesting company - Marco Group (

Marco Group Company Overview
Marco Group is a company mainly doing its business  in Asia region. Their company has their business in Malaysia, Singapore, Myanmar, Vietnam, Thailand, Brunei and Cambodia. Their core business is as distributor of timepiece, consumer electronics, electronics musical instrument and digital still camera.

Some of the major brands distributed by Marco Group are:

  • Casio
  • Hush Puppies
  • Movado
  • Baby G
  • Caterpillar
  • Dunlop
  • Privia
  • Exilim

This is an interesting company to put in the watch list because they are the official distributor for all these branded products for Asia region.

Fundamental Financial of Marco Group
This is my analysis on Marco Group on their Financial position.

Net Tangible Asset
Shareholder's Fund/Equity 95355403
Total Shares 754414100
NTA 0.126396634
Free Cash Flow
Free Cash Flow 41037848
Total Shares 754414100
Free Cash Flow Per Share 0.054396979
Income Statement Profit/Loss
Net Profit attributable  14212350
EPS 0.018838924
Cash Flow Statement Profit/Loss
Operating Activities 18560394
Investing Activities -38656
Financing Activities -16485100
Exchange Rate 0
Cash at beginning of Year 39001210
Total 41037848
Cash of selling 49% Stake 0
Net Cash 41037848
EPS VS NTA 14.90460902
Cash Per Share VS NTA 43.0367307
Price Per Share 0.14
PE 7.431422249
If PE 10, what is the price? 0.188389241
Expected Percentage Earn 34.56374386

From this analysis, we can see the main item highlighted in Bold.

1. Free Cash Flow per Share
Free cash flow per share of Marco Group is around RM0.0544 per share. This means that for every share you own, you are actually owning RM0.054 of the cash of the company.

Earning per share (EPS) VS Net Tangible Asset (NTA) of Marco Group is 14.9%. This means that the Earning per share of the company is actually quite good. The management team of Marco Group is able to create 14.9% earnings power from the net tangible asset.

3. Cash Per Share VS NTA
Cash per share VS NTA shows that 43.04%. This means that Marco Group has big amount of cash. The amount of cash is around 43% of their NTA. (NTA is the actual value of the company which include their cash and asset). From this, we can see that Marco Group is RICH in cash.

For normal stock, their PE is normally around 10. For Marco Group, their current PE is around 7.43. So, if we do the following assumption:
1. If PE is 10, what is the share price of Marco Group?
if PE is 10, Marco Group should be selling at RM0.188 per share.

2. Expected Percentage to earn by buying the share of Marco Group?
With the current price of RM0.14 per share, we can expect to earn 34.56% from this stock.

What about dividend per annum?
Well, based on the current share price, the dividend per annum is 10% per year.

So, do you think Marco Group is undervalued? Personally, I think it is undervalued. It is a worth investment. With the additional 10% dividend per annum, it is a very worth while investment in uncertain market.


Richard Gere said...

Informative post. Thank you for sharing. Investing in dividend stocks yields you good income if selected a perfect portfolio observing the changing market trends. A good investor has to keep the thorough knowledge about the global market and the industries before investing.

high dividend stocks

Related Posts with Thumbnails