Hi Elaine, DPR means devidend payout ratio ? I thought DPR result from devidend per share / Earning per share. >From your example below, you divide it with the price stock ?? Thank's
rgds Ruslim > > *Listen to me. I'll explain this as simple as possible. Okay? > First, you > > must BUY now. That's all. lol..[?] okay seriously, you should > consider > > comparing stocks' DPR (dividend/price ratio) vs RFRR (Risk free > rate of > > return) or simply the average bank deposit rate + 1% spread. > > > > Dividend/Price Ratio should NEVER be allowed to go above RFR ratio. > > (otherwise it's undervalued) > > > > Example: > > Let's say a stock price is 1000. The dividend forecast is around > 100. That > > makes the DPR = 100/1000=10%. while the current risk free rate of > return > > (RFRR) is only at 8% > > > > You see the DPR is higher than the current RFRR. So, the stock > price MAY > > adjust itself to have 8% DPR, means the stock price' fair value > would be > > around 100/8% = 1250. So the stock may advance around 25% from 1000 > (to > > 1250) usually until the dividend is paid. > > > > Let's say for other stock, the dividend forecast is only 10. That > makes the > > DPR = 10/1000=1%, this means the stock price is way too high > compared to its > > dividend. So the stock price MAY plunge to 10/8%= 125 at worst, > usually soon > > after the dividend is paid. > > > > Case 1: > > BUMI. On June 2008, BUMI price was 8000. The announced > > > <http://economy.okezone.com/index.php/ReadStory/2008/06/12/21/118016/b > umi-bagi-dividen-usd317-jt>dividend > > was 111, and RFRR is, let's say, 8%. The simple calculation would > be 111/8% > > = 13xx. That'd be the fair value of BUMI. > > > > Case 2: > > INCO. On Nov 1, 2007, INCO announced > > <http://www.antara.co.id/en/arc/2007/11/1/pt-inco-tbk-approves-an- > interim-2007-dividend-of-09787-per-share/>that > > it'd pay a dividend of $1 or around IDR 9000. INCO was 100k/share. > The RFRR > > is 8%, so INCO had a chance to rise to 9000/8% = 112k before the > dividend is > > finally paid. But the nickel price was already plunged at that > time, so the > > next dividend forecast fell, and so did the price. The latest > dividend cmiiw > > was around $0.2, that makes current fair value of INCO is around > 25xx. > > > > I made you confused, didn't I..? [?] this post makes me > less 'mysterious' lol > > wth.. I guess you'd love to have a night class with Elaine.. [?] > j/k.. > > > > Elaine > > * > > 2009/1/4 Richard S <richard...@...> > > > > > > Para Suhu2x yg saya hormati.. saya sebagai newbi punya pertanyan > > > fundamental mohon bimbingannya .. > > > Bagai mana cari tau harga wajar sebuah saham, apakah dia uda > terlalu mahal > > > untuk di beli ato sudah mura dan boleh di beli? > > > Thanks in advance, Richard. > > > > > > > > > > > > > >
