Using Stories & Fundamentals

Using Stories for investing

In investing, it's easy to realise that we can get swayed by different types of stories. On the flip side, it's easy to look at the fundamentals and say that it's bad but why is the stock price soaring?

For example there's this story on $Grab Holdings(GRAB)$ that mentions that a Grab driver misses out on his $3 incentive by 4.8cm. This would led one to believe that all Grab drivers are suffering badly. This might be true given from touching the brick, the local SG environment seems to suggest more cab drivers abandoning Grab back to the usual Comfort. Aside, surge pricing seems to be occurring more often based on stories my friends share.

However interestingly, another relative told mehow easy it is to catch a Grab in Malaysia JB. This may mean good business, that's why many people are doing grab, or bad business as margins are probably compressed due to increased supply over demand. 

Aside, on the scene of Grab Pay, it's card appears to be nuked. Cash back has plummeted to a mere 0.3% and on top of it, to get 2,500 points for $5, you need to spend $833k. With a transaction limit of $30k per year, it will take 28 years!

Aside from that, another article highlighted that Grab's loaning functions to drivers amount to the same rates as 24% pa akin to a credit card.

So how? 

Using Fundamentals for investing

The next yardstick to check if a stock is investible, I will use Fundamental Analysis. Some high level questions I will ask would be:

Is the company profitable?

Is the company's moat wide?

What are some of the financial metrics?

For $Grab Holdings(GRAB)$ , it is not profitable. [Facepalm] 

There is no moat in my opinion as an alternative solution can always be found. [Blush] 

Here are the metrics:

Nett Tangible asset: $1.02 (Price now $3.70 USD)

Tangible book: $1.54

Gross Margin: -20.13 (negative)

ROE: -32% (negative)

On the flip side, the liquidity metrics are encouraging:

Cash to debt: 3.09

Current ratio: 7.12

Quick ratio: 7.08 

So how? 

When the story is negative and the metrics looks bad, it is a no brained toavoid.

Of course could Grab turn around?

Possibly but I think the odds are lower day by day. You can almost smell it outright. But what about other possible scenarios?

Good fundamentals and bad story = value trap or be prepared to buy and hold

Good story and bad fundamentals = speculative.

Good story and good fundamentals =Don't wait too long! check out the valuation vs price! 

What do you think? [Grin] 

Aside, I am hoping my salary increments and bonus outpaces inflation. Otherwise it'll be like that comic below. [Facepalm] 

@TigerStars @CaptainTiger @MillionaireTiger 


# 💰 Stocks to watch today?(28 Mar)

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment46

  • Top
  • Latest
  • shining87
    ·2023-02-17
    TOP
    Will be interesting to see how their delivery segment holds up as Covid restrictions ease and more people start to dine out again. Strong believer in the company w/ cost basis ~$5.25. Technicals are looking good!
    Reply
    Report
    Fold Replies
    • BenjiFuji
      Yup. Keen to study this. Although not a fan of only using technicals. [Great]
      2023-02-18
      Reply
      Report
  • YaleBrewster
    ·2023-02-17
    TOP
    I have average cost at $12. Does it have potential to get back that high?
    Reply
    Report
    Fold Replies
    • BenjiFuji
      I am not a fortune teller unfortunately. Depends on the business fundamentals and how compelling is the story. [Glance]
      2023-02-18
      Reply
      Report
  • Ericdao
    ·2023-02-17
    TOP
    It's will stay for a very long long time. Will be difficult for comfort to gain back leadership. Grab still innovating. The financial scheme should see positive results.
    Reply
    Report
    Fold Replies
    • BenjiFujiReplying toEricdao
      Thats unfortunate. [Surprised]
      2023-02-17
      Reply
      Report
    • EricdaoReplying toBenjiFuji
      I see should be minimal but most drivers unaware of the high interest rate.
      2023-02-17
      Reply
      Report
    • BenjiFujiReplying toEricdao
      Yes i read about it. Double edged. If thr drivers cant finance back, GG… [Facepalm]
      2023-02-17
      Reply
      Report
    View more 2 comments
  • fishinglo
    ·2023-02-17
    TOP
    Expect to wait 5-6 years for this dog to wag its tail. Too many shares outstanding. Too much cash sitting, doing nothing. Not enough interest from institutions, priced too low. Have a nice wait.
    Reply
    Report
    Fold Replies
    • BenjiFuji
      Yup, so not waiting for this. Cash can be employed better elsewhere. Thats also provided this dog can survive so long [LOL]
      2023-02-18
      Reply
      Report
  • BruceBryant
    ·2023-02-17
    TOP
    Grab can go back to the SG stock market or HK stock market. Much better for its price.
    Reply
    Report
    Fold Replies
    • BenjiFuji
      But lower liquidity might happen. Lets see what happens. [Great]
      2023-02-18
      Reply
      Report
  • JohnMitchell
    ·2023-02-17
    TOP
    I know Grab is very popular in South East Asian market. I want to try it when I travel to Singapore or Malaysia.
    Reply
    Report
    Fold Replies
    • BenjiFuji
      Sure, come by [Great]
      2023-02-17
      Reply
      Report
  • XantheJuliana
    ·2023-02-17
    TOP
    The uber report just signifies more potential for grab in this sectoral play ..
    Reply
    Report
    Fold Replies
    • BenjiFuji
      Potential may not translate into results. Of course we need to take consideration that Uber has a share in Grab as well and will want to up sell it.
      2023-02-18
      Reply
      Report
  • LMSunshine
    ·2023-02-17
    Awesome post buddy❣️ Loved your 4 division metric. Missed your posts🥰
    Reply
    Report
    Fold Replies
    • BenjiFuji
      Thanks [Great]
      2023-02-17
      Reply
      Report
  • JohnMitchell
    ·2023-02-17
    Small tech companies are hard in US.
    Reply
    Report
  • BenjiFuji
    ·2023-02-17
    Perhaps, since there’s greater awareness in the APAC region.
    Reply
    Report
  • Pag
    ·2023-02-22
    👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻
    Reply
    Report
  • MLFL
    ·2023-02-22
    👋
    Reply
    Report
  • Lollollol
    ·2023-02-21
    K
    Reply
    Report
  • Sunflower1991
    ·2023-02-20
    Good
    Reply
    Report
  • changgw
    ·2023-02-20
    up
    Reply
    Report
  • Than
    ·2023-02-19
    Good
    Reply
    Report
  • NgKenny
    ·2023-02-17
    Nice
    Reply
    Report
  • Linda77
    ·2023-02-17
    tks
    Reply
    Report
  • Hai777
    ·2023-02-17
    [微笑]
    Reply
    Report
  • Joe Lamborgh
    ·2023-02-17
    Ok
    Reply
    Report