Monday, April 28, 2008

Digi Big and Value

Digi has been performing fairly well compared to other telco companies in Malaysia. The company started to show is true strength when the company continues to deliver continuous dividend to the shareholders. This was the best year for all Digi shareholders as Digi is paying back hefty dividend RM 2.28. At this rate the div payout is around 9.4% ++ which is fairly a good deal to many investors.

Some of the key Ratio in determining a good stock

ROE 2005 (24%) , ROE 2006 (40.28%) , ROE 2007 (63.82%)

The company protrays some of the key UP signal but lets look at the liability especially the liquid liability to identify whther the current ROE is gear from Assets or Liability perspective. Current liability only increase by 5% while longterm liability decrease by 33% showing good financial health in the company. One of the key driver for high ROE is due to the huge sales which contributed to increase of 19% from the year 2006 till 2007. The revenue soared also drive Digi Net profit up by 31% from year 2006-2007 to a new high of RM 1,062,595,000 peranum. Interesting figure.

I would place this DIGI as a value share to invest as the company is really cash cow. The company is really cash cow since the company conquer most of the foreign market especially the indonesia and phillipines population by offering the lowest rates in Malaysia.

Financially the compan is doing well for the past 4 quarters