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 $Grab Holdings(GRAB)$
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
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- shining87·2023-02-17TOPWill 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!3Report
- YaleBrewster·2023-02-17TOPI have average cost at $12. Does it have potential to get back that high?3Report
- Ericdao·2023-02-17TOPIt'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.3Report
- fishinglo·2023-02-17TOPExpect 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.2Report
- BruceBryant·2023-02-17TOPGrab can go back to the SG stock market or HK stock market. Much better for its price.3Report
- JohnMitchell·2023-02-17TOPI know Grab is very popular in South East Asian market. I want to try it when I travel to Singapore or Malaysia.2Report
- XantheJuliana·2023-02-17TOPThe uber report just signifies more potential for grab in this sectoral play ..1Report
- LMSunshine·2023-02-17Awesome post buddy❣️ Loved your 4 division metric. Missed your posts🥰LikeReport
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