Reinvestment risk


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An old post discussing reinvestment risks posted in May 16, 2017.  Data of Aeon Credit then was unadjusted for capital changes that have occurred since.


http://www.investlah.com/forum/index.php/topic,78077.msg1522231.html#msg1522231


Aeon Credit  May 16, 2017

FY                      HPr      LPr      adjDPS (sen)

28-Feb-17       18.06     12.94       63
29-Feb-16       15.62     11.92       63.23
20-Feb-15       14.86     11.00       28.22
20-Feb-14       18.00     10.30       46.3
20-Feb-13       18.86     10.38       32.15
20-Feb-12       13.72       5.50      25
20-Feb-11         5.75       3.09      22.08
20-Feb-10         3.48       3.02      18.75



 May 16, 2017
The price of Aeon Credit peaked in 2013. After then, it went on a decline.

I remembered discussing this company with fellow forum participant, cockcroach (who has since disappeared, hopefully temporarily).

Cockcroach sold his Aeon Credit around 16.00 per share.#

After selling a share at a certain price, when can we say we have made a profit from the sale?

For those who are long term invested into stocks, what do they do with the cash from the sale?

1. By selling a share at a certain price, have I made a profit?

Yes, since I bought the stock at a lower price in the past.

No, since I bought the stock at a higher price in the past.

2. What would you do with the cash from the sale?

I am out of the market, forever. In that case, you would have realised a gain or a loss, which is definite.

I am in the market for the long run. I would have to reinvest this cash into another stock or the same stock.

3. When would you have realised a gain, after selling a stock, if you were to be in the market for the long term?

I would have realised a gain, IF I am able to buy the same stock back at a lower price than I sold.

I would have realised a loss, IF I were to buy the same stock back at a higher price than I sold.

I would have also to take into account the dividends I did not receive (if any) while I was holding cash and out of the stock for that period.

4. Can you predict the short term volatility of the share prices of your stock?

I believe I cannot. Those who can, are either having uncanny abilities or are lying.

AEONCR November 03, 2017
Price 14.30
Market Capital (RM): 3.536b
Number of Share: 247.25m
EPS (cent): 119.03 *
P/E Ratio: 12.01
ROE (%): 24.54
Dividend (cent): 63.000 ^
Dividend Yield (%): 4.41
Dividend Policy (%): 0
NTA (RM): 4.850
Par Value (RM): 0.500

Price of 14.30 above is equivalent to 14.10 today when adjusted for capital changes.

AEONCR 27.1.2019
Price 15.98
Market Capital (RM): 4.007b
Number of Share: 250.78m
EPS (cent): 139.29 *
P/E Ratio: 11.47
ROE (%): 24.61
Dividend (cent): 41.130 ^
Dividend Yield (%): 2.57
Dividend Policy (%): 0
NTA (RM): 5.660
Par Value (RM): 0.500

Since Nov 2017, the share price of Aeon Credit has gained 13.3% (15.98/14/10 = 113%), excluding dividends received.

#(16.00 per share is equivalent to 15.78 per share today, adjusted for capital changes.)

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