From Evernote:

Review of Property Firms - Q311 Results

Disclaimer: Please do your own due diligence when making decisions :)

Revenues

Sales is the starting point of all so let's start our review on this number. SMDC posted the highest increase in revenues compared to other companies reporting a 24% increase. MEG reported a small increase at 1%. I guess this is due to the fact that SMDC serves middle and lower income market. I interpret this as that there's a big market in middle and lower income group. It is important that revenues are increase because this means that the company is reporting growth. But i would like to caution that revenues is just a component. The gross margin plus operating expenses also comes into play for th profitability of  a company.

In terms of revenues in absolute peso, MEG still has the highest reported number

Gross Margin

MEG has the highest reported gross margin ratio followed by FLI. SMDC is trailing at 40.74%

Profit Margin on Sales

This number shows the amount of centavo a company converts to profit for each peso of revenue. MEG is still the company to beat at 32.44%. This means there's a 32 centavos for each P1 the company bills their customer. FLI follows at 28.34%. This is still a good number but the decreasing revenues of FLI worries me. It might be biased since we are only working with three quarters worth of revenue but comparing it with MEG and SMDC, these two companies were still able to increase their revenues. 

Return on Assets/Equity

Among the four companies, MEG still leads the competition by reporting the highest number of ROA/ROE followed closely by SMDC.

Summary

MEG is still the company to choose given its high profit margin on sales, ROA/ROE and positive cash flows. The company is a safe bet among the four. If one is to take a higher risk, SMDC looks promising with its increasing revenues. However, the company has to improve its operations to increase its profit margin on sales. Again, SMDC is talking a different territory so this is really promising. I particularly like SMDC because it is serving a different market thus it kinda has the first mover advantage for the market segment. (That reminds me, i should use forces of competition in next analysis). 

If you want to the details of each company please see here

MEG

FLI

SMDC

VLL

From Evernote:

VLL - Q311 Results

Vista Land's operations used cash for the period ended Q311. This is disappointing given that operations provided cash for the year 2010.  Revenues of the company declined by 14% compared with 2010. Though this is a declined the company still has one quarter to surpass last year's mark. Looking at the comparison above, it appears that the company is well poised to surpass last year's revenue.

Gross Margin remained flat at 53.03% same with Profiit Margin on Sales at 24.96%. Even these numbers did not improved, we can credit the management for being consistent. 

Return on Assets and Equity are slightly lower than last year's but considering the increase in assets and equity, these numbers are not that bad.

SMDC - Q311 Results

SMDC reports a very interesting Q311 results. Operations still consumes cash and as of the period ended Q311, it exceeded last years outflow by P1M.

Normally, we want cash flows from operations to be positive. This means that the company operates and able to provide needed cash for it to continue. Nevertheless, the revenues of the company grew by 24% at the end of the third quarter. Given that the fourth quarter results were not yet released, we expect the company to report more than 24% growth in revenues. 

Gross Profit Margin is down to 40.74% compared with last years 44.71%

Net Income was also down most probably due to lower gross margin and higher operating expenses. Profit Margin on Sales was just 22.68% for the period ending Q311 while the company was able to report 33.14% last year. Profit Margin on Sales can be interpreted as the centavo earned for each peso of sale after deducting all the expenses.

Return on Assets and Return on Equity were down as well. This is not entirely bad news because one factor for these returns is the total assets and investment of owners. Assets and investment by owners increased thus dragging the ratio down. 

From Evernote:

FilInvest Land: Q311 Results

Disclaimer:  Though i have performed diligence to make sure that my basis are reasonable, i suggest you also do your own due diligence when making decisions.

Filinvest Land's Q311 results is not good to the eyes. Though the amount of cash used in operations decreased, the net revenues for the period ending Q311 is not spectacular. Given that the four quarter results is yet to be released, 2011 revenues appear to be just equal to 2010 results. 

Gross margin also declined slightly from 61% to 58.32%

Return on Assets and Equity are also disappointing. Both ratios declined from 2010 to a reported value of 2.49% and 3.92%.

MEGAWORLD - Q311 Results

Finally, was able to set aside a few minutes to do this analysis. Similar with my previous post, a disclaimer. I have performed my analysis for my own use by relying on data downloaded from the PSE website. Though i have performed diligence to make sure that my basis are reasonable, i suggest you also do your own due diligence when making decisions.

Now, that i have that out of the way, the first focus stock is Megaworld.

Looking at the numbers above, MEG continues to report positive financial results. The operations is generating positive cash flows. Also, net revenues increased by 1%. I don't have data as to their target but I interpret this as positive because the revenues here is only for the first three quarter of the year. Definitely, Megaword's 2011 revenues will exceed that of their 2010 reported revenues.

In terms of Gross Profit Margin, it has also improved considerably from 45.66% to 64.59%. 

Return on Assets and Return on Equity showed improved results though very minimal. 

Total Assets increased both due to positive results of operation and increase in liabilities. As of Q311, Debt-Equity ratio was at 79.13% compared to 65.81%.

The Focal Point

This is the third post on my books I have read and been reading. 

If you miss the other posts, here they are

The Science of Getting Rich

Secrets of the Millionaire Mind

The Focal Point by Brian Tracy

From the book

Once upon a time, there was a major technical problem at a nuclear power plant. This
malfunction was slowing energy generation and reducing the efficiency of the entire
operation.

As much as they tried, the plant's engineers could not identify and solve the problem. So
they brought in one of the nation's top consultants on nuclear power plant construction and
engineering to see whether he could determine what was wrong. The consultant arrived, put
on a white coat, took his clipboard, and went to work. For the next two days, he walked
around, studying the hundreds of dials and gauges in the control room, taking notes, and
making calculations.

At the end of the second day, he took a black felt marker out of his pocket, climbed up on a
ladder, and put a large black "X" on one of the gauges.

"This is the problem," he explained. "Repair and replace the apparatus connected to this
meter, and the problem will be solved."

He then took off his white smock, drove back to the airport, and flew home. The engineers
disassembled the apparatus and discovered that, sure enough, this was the cause of the
problem. It was soon repaired, and the plant was back up to full capacity.

About a week later the plant manager received a bill from the consultant for $10,000 for
"services rendered."

The plant manager was surprised at the size of the bill, even though this was a multibillion-
dollar facility and the problem had been costing an enormous amount of money in lost
generating capacity. After all, he reasoned, the consultant had come in, stood around for a
couple of days, written a black "X" on one of the gauges, and then returned home. Ten
thousand dollars seemed like a high fee for such a simple job.

The plant manager wrote back to the consultant, "We have received your bill. Could you
please break down and itemize your charges? It seems that all you did was to write one 'X'
on a single gauge. Ten thousand dollars appears to be excessive for this amount of work."

Some days later, the plant manager received a new invoice from the consultant. It said, "For
placing 'X' on gauge: $1.00. For knowing which gauge to place 'X' on: $9,999."

This simple story illustrates the most important single principle of success, achievement, and
happiness in life. Knowing where to put the "X" in each part of your life is the critical
determinant of everything you accomplish.

This "X" is your focal point. This is the one thing you can do in that area, at any given
moment, to get the best result possible. Your ability to choose the correct time, place, and
activity to place your "X" on has a greater impact on your life than any other factor.

Booksale

How i came across this book is a result of one of the random things in life I do. I was wasting time in National Bookstore and was going through a pile of books on sale. If you are familiar with this bookstore, you know that occasionally they have these set of old books dumped together in a box. They don't have a listing of books included in that sale and you just got to go over the books one by one and pick something that interests you. Randomly, i saw this blue book and bought it. It was just around P100 so there's no harm in buying a cheap and an unknown book (at  least for me).

After reading it, it turns out to be a gem. There are couple of life lessons one can pick from the book.

Accepting Responsibility

The book reminds us that everything that we are and everything that we will be is our own responsibility. A cliche for some but a good reminder nonetheless. The book reiterates the back that accepting responsibility for our lives means that we refuse to make excuses or blame others for anything in our life that we are not happy about. It tells us to refuse to criticize others for any reason, refusing to complain about our situation or what has happened in the past. Lastly, it tells us to eliminate our if-onlys and what-ifs and focus instead on what we really want, where we are going and taking action.

What it means to me

Same with the other books, life does not get better by knowing and learning things, it is about taking action. What i like about this book, it suggests revisiting different aspects of our lives, identify goals on it and take action. A bit tedious exercise but it is really a good thing to do as it provides a new point of view on how we deal with life.

If you are interested, the book is available in amazon.

Focal Point: A Proven System to Simplify Your Life, Double Your Productivity, and Achieve All Your Goals

Secrets of the millionaire mind - another book about secrets

This is the second post of my book I'm reading series. If you miss the first book, here's the link.

  Secrets of the Millionaire Mind by T. Harv Ecker

Coincidentally, the second book also has a secret in its title. A bit ironic to think that I should be rich by now having read and learned the secrets. But i am not. Not just yet! and I am on my way. The book tells us that being successful in something is two part. First is the thinking or the desire of having that goal. Next is the execution. They are the two things that are needed to accomplish something. If we spend our day thinking about good stuff and all the desires that we have, it just ends there. It will not happen. We have to move and do something. 

Key points i got from the book are the concept of giving back and measuring net worth.

• Giving back
• Measuring net worth

On Giving Back

Prior to reading the book, I would say I am not a selfish guy. I give back to the Church, occasionally give money to my parents and siblings. Other than that, that's all i can say i do in terms of giving back. I guess there was something in the book that struck a chord in me telling me the importance of giving back. Giving back is showing gratitude for all the blessings that God has given me. 

This year, I started working on giving back regularly a portion of my income. It is still a small amount but I am working on giving back higher. The books suggests giving back 10% and i know that was also written in the old testament. I haven't reached that goal yet but I am working on it. Actually, this one is what fuels me to find additional sources of money. If i want to give back higher, then i must earn higher. I've chosen Unicef because i like their cause (If you want to help them, check their site http://www.unicef.org/philippines/). Or you can begin with your family. We all heard the word "Charity begins at home".  or give your money to me. hehehe. just kidding. I will never ask money. I want to earn it. 

On Measuring Net Worth

After reading about the difference between income and net worth, i started measuring my assets and liabilities last February. A bit awkward for me actually. I took up accountancy in college and worked as an external auditor and general accountant. I spent so many years preparing income statement and balance sheet of companies but I have not really tried working on my personal income statement and balance sheet. I don't know. It feels weird. Or maybe because i don't have much assets to write down. 

But thankfully, i have read the book and it motivated me to do it. A bit tedious process actually but doable. I started listing down all my savings account, checking account. Then i worked on my obligations such as credit card dues. My first draft was just that. Then i worked on improving the list by adding on assets i forgot to add such as value of mutual fund and other investment. My wife actually had done it easily as she don't have other investments when she started. It was as simple as writing down the bank accounts their value less the credit card dues. 

Income is like a faucet while net worth is the bucket. The exercise reminded me that though i am enjoying the steady flow of income from my job as a faucet, i should also think about how much water i already have in the bucket. Because one day, the faucet might stop giving me water and when that time comes, i should have enough water in my bucket to use while i am looking for a new faucet. 

The book is available at Amazon if you want to read it  (Note: affiliate link) Secrets of the Millionaire Mind

Quotable Quotes

Just like with my first post, I wanted to share key ideas worth considering

1. My income can grow only to the extent that i do!
2. If I want to change the fruits, i will first have to change the roots. If i want to change the visible, i must first change the invisible
3. Money is a result, wealth is a result, health is a result, illness is a result, my weight is a result. I live in a world of cause and effect
4. Give me five minutes and I can predict the financial future for the rest of my life
5. Thoughts lead to feelings. Feelings lead to actions. Action lead to results
6. When the subconscious mind must choose between deeply rooted emotions and logic, emotions will always win.
7. If my motivation for acquiring money or success comes from a non supportive rout such as fear, anger, or the need to "prove" myself, my money will never bring me happiness.
8. The only way to permanently change the temperature in the room is to reset the thermostat. In the same way, the only way to change my level of financial success "permanently" is to reset my financial thermostat
9. Consciousness is observing my thoughts and actions so that I can live from true choice in the present moment rather than being run by programming from the past.
10. I can choose to think in ways that will support me in my happiness and success instead of ways that don't.
11. Money is extremely important in the areas in which it works and extremely unimportant in areas in which it doesn't.
12. When i complain, i become a living, breathing "crap magnet"
13. There is no such thing as a really rich victim
14. If my goal is to be comfortable, chances are I'll never get rich. But if my goal is to be rich, chances are I'll end up mighty comfortable.
15. The number one reason most people don't get what they want is that they don't know what they want
16. If I am not fully, totally and truly committed to creating wealth, changes are I won't
17. The law of income; I will be paid in direct proportion to the value I deliver according to the market place
18. Bless that which i want
19. Leaders earn a heck of a lot more money than followers
20. The secret to success is not to try to avoid or get rid of or shrink from your problems. The secret is to grow myself so that I am bigger than any problem
21. If i have a big problem in my life, all that means is that I am being a small person
22. If I say I am worthy, I am. If I say I'm not worthy, I am not. Either way, I will live into my story.
23. If a hundred-foot oak tree had the mind of a human, it would only grow to be ten feet tall. 
24. For every giver there must be a receiver, and for every receiver there must be a giver
25. Money will only make me more of what I already am
26. How you do anything is how you do everything
27. There's nothing wrong with getting a steady paycheck unless it interferes with your ability to earn what you're worth. There's the rub. It usually does
28. Never have a ceiling on your income
29. Rich People believe "you can have your cake and eat it too". 
30. The true measure of wealth is net worth, not working income
31. Where attention goes, energy flows and results show
32. Until you show you can handle what you've got, you won't get anymore
33. The habit of managing your money is more important than the amount
34. Either you control money or it will control you
35. Action is the bridge between the inner world and the outer world
36. A true warrior can tame the cobra of fear
37. It is not necessary to try to get rid of fear in order to succeed
38. If you are willing to do only what's easy, life will be hard. But if you are willing to do what's hard, life will be easy
39. The only time you are actually growing is when you are uncomfortable
40. Training and managing your own mind is the most important skill you could ever own in terms of both happiness and success
41. You can be right or you can be rich, but you can't be both
42. Every master was once a disaster
43. To get paid the best, you must be the best