Leading stock market legend Warret Buffertt, who becomes the world second richest people after Microsoft's Bill Gates via investment in shares market, invest in brand name or what he call "Consumer Monopoly" like Coca Cola, McDonald, Wall Mart etc.
Usually, I feel company list on Reader's Digest Trusted Brand Award are company with good quality product. York air conditional, market by Malaysian leading company OYL Industries Bhd, perceived to be a blue chip stock after Genting before the company divested by Hong Leong group. share price go up to RM50 at one point of time before Asia financial crisis. The same shares price trend was seen on another regular recipient of Trsted Brand Award, Panasonic.
Non listed MNC product, like biscuit product categories recipient....Jacob's by Danone, also has good quality. I wouldn't invest in local biscuit company like Hwa Tai, Hup Seng etc unless they able to produce the same quality product like Jacob's.
Base on the above, there seem to be a relation between share price performance and recipient Reader's Digest Trusted Brand Award.
However, some value become too high, like Nestle at PE ratio of 21.3. Spritzr.... PE ratio at 17.4. Shares price already appear expensive.But, they is some gem yet to be discover.
One of it is Poh Kong under Jewellery categogy. It PE ratio was only 5.3. That means you can recoup you investment within 5.3 years if the company able to maintain it current profit, which is likely if it was listed on Trusted Brand Award. Your invetsment will be double without any grow. However, usually a strong brand company, or what Warren Buffett term as company that enjoy Consumer Monopoly, usually able to grow their profit. If a company able to grow their profit at 20% per year. Profit will be double within 5 years.
Another company I like is Amway, it is the most Trusted Brand under water purifier category and Vitamin/Health supplement category. It attraction is it dividend yield at 8.8%. It is more than double, almost triple than fixed deposit rate at around 3%. Thus, can bet on it if your aim is dividend.
The other recipient on of Vitamin/Health Supplement category...Appeton. The brand was under Mesdaq listed Kotra. However, it PE ratio at 9, more expensive than Poh Kong and did not pay dividend as much as Amway. Dividend yield less than bank's fixed deposit rate.
Thus, my bet is on Poh Kong and Amway on share aprreciation and dividend respectively.
TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse
