The cigar butt special

These three promotions are full of warts, but they are quite cheap. In fact, what are you not a noble: jinx and saliva are slow.

By Mickey Maldec k-30 March 2021 Mickey Mald i-March 30, 202 1-5 minutes lecture Free member Free member Joined Intelligent Investor now Enter the 5-digit test code sent to.<>"Change number"Change number', user.FirstName) >> Enter your mobile phone number and click "Send" to send text news with authentication code.

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A wet cigarette lying in the gutter may not be the best puff, but it's free, and the last puff is pure profit. Warren Buffett uses a cigar butt to explain investing:

Key Points

• Cigar Pick 1: Meyer
• Cigar Pick 2: Donaco Int'l
• Cigar Stock Pick 3: Quina Securities

Cigar Bat investors look for stocks that are trading at exceptionally low multiples or at large discounts from their liquidation value. This usually results in a list of worthless, risky, or dying companies (often all three) from which investors can squeeze the last of their cash for free by paying a low enough price.

But Warren Buffett has said, "My cigar-picking strategy has worked very well for me as long as I've managed small amounts. In fact, the dozens of cigars I smoked for free in the 1950s made the last decade the best decade of my life in terms of relative and absolute investment returns."

With the market in a frenzy for growth and quality, now may be the perfect time to get your hands on the ugly side of this market. Here are three companies, each uniquely tested and available at bargain prices.

But before we get to that, a disclaimer: the promotions below are not recommendations. They are small, illiquid, and carry a certain amount of loss. This list is for entertainment purposes only, a starting point for experienced investors who like to do their own research. So let's dive in.

Cigar butt #1: Myer

Everyone knows Myer is dead. The department store model is outdated, real estate giants like Centra are trying to kill them with rent, nimble online startups are relentlessly thriving, and the pandemic is shifting shopping behavior online.

Myer's stock price is down 90% from where it was a decade ago, and it seems destined to go the way of JC Penney and Sears.

But what if it was wrong? The company has developed a new strategy, reduces territories, reduces costs, and improves its assortment. The most important thing is to use the Internet. Very fast.

In fact, Meyer is currently spending 21 % of Meyer as a whole. Are you surprised? Probably, when Meyer is compared with other retailers, the head begins to become cloudy.

For example, online retailers, popular temples and webster market, market capitalization costs $ 120 billion. Or a Universal Store of Omnikanal Retail, which had been acquired for $ 500 million a while ago. The sales of these companies in the first half of the year reached $ 162 million, $ 118 million.

At the $ 300 million market price, Meyer can buy it for a quarter of the cost of the temple and half of the universal cos t-and that and the other 79 % of sales are said. It generates more online sales than both taken together. However, when the situation is actually confused, this is, in effect, the last si x-year Meyer is producing the same way for empty currency and for his personalization. Don't pay attention to the fact that the actual job keeper is being thrown into your eyes.

In fact, the management of Meyer Department Store is a terminal crisis, and the reconstruction of chain stores is huge. This will not happen to Meyer for another 10 years. However, if the company can continue to receive a free foreign exchange method, we have a dividend during this time more than the shared cost, and a long victory in the online business provides a circle of salvation to shareholders. It has a possibility.

Cigar butt #2: Donaco International

Donaco, a casino operator in Southeast Asian, was dramatic and sometimes full of humorous events.

Donaco personally lent the main assets of Cambodian casino Star Vegas to the politically connected Thai entrepreneur, Sombon Sukjaloen Luseri. Soon, these stakeholders related to Sungbourne opened a casino near the lane, as if they had not met the criteria of not competing.

The lawsuit began and everything was going to be out of the way when Thai traders threatened to create a wall around Donaco's casinos, stop electricity, and discontinue Donaco's lease agreement earlier than planned.

Donaco executives believed that there was a proof that they could not be denied, but unusually, the Cambodian judicial system, the lighthouse of justice, concluded for a politically connected big. 。

For a while in Donaco's Vietnamese casino "Aristo", Chinese illegal syndicate threatened the VIP party, sought protection funds, and drove off gamblers. However, Donaco's owner, Joey Rim (a member of the Gentin Home Empire), was full of his own personal thoughts. Inspired by the founder's will and experiencing divorce, Rim, who had been divorced, defaulted his loan and ruled hedge funds of 27 %.

After a harsh power competition battle, the provisions were changed to all executives, and Thai traders regained the control of the company last year after reckless cash.

Now, as a result of the pandemic, the Poipet border has been closed, and Donaco's Star Vegas Casino has lost his Thai sponsor. This is probably the most cautious situation in Donaco's life in terms of fateful dramaticness.

The company's stock prices have fallen by more than 90 % since IPO, and it is absolutely acceptable that the company is not an investment target, considering the cocktail of the initial overseas risk, unclear management, and the closed limit. However, there is one important reason to focus concerns in Donaco.

She has the ability to provide funds. When Donaco acquired the Star Vegas casino in 2015, he gained more than $ 150 million debts. The company plans to pay $ 115 million in three years and repay the full amount required by the end of 2021, despite any difficulties. This is about the fact that casinos generate a large amount of money when they are in perfect condition.

Currently, Donaco can be bought for only $ 80 million. The instructions of the company, which paid more than $ 500 million to Star Vegas, just six years ago, should not forget that the company will soon be in debt. At its peak, he abandoned more than $ 40 million free currency, and did not estimate the price of Aristo.

Donaco is definitely a very annoying advertisement in this list, but no one says that cigar butts are actually good. If you're lucky, you're still there.

Cigar butt #3: Kina Securities

Founded in 1985 and listed in ASX in 2015, Kinaseculty's is an economic company that offers banking, fund management and money planning services. Former CEO of the Asia Pacific sector in the West Pack has led a high track record in profitability, dividends, and cash flow.

The only condition is based on Papua New Guinea. Papua New Guinea's crime level is the world's highest level. The tribes during the war switched bow and arrow to automatic pistols, and the villages on the frontiers exist in accordance with individual laws, as they have no trust in the police.

Economist magazine has announced that the country is always reborn as a "ful l-fledged crest classy".

If you throw it all out for a while, it's a "bull" project. In 2019, Kina bought assets from Papua New Guinea's ANZ Bank, and in 2020 she bought Papua New Guinea and Fiji waistpacks. In particular, the cautious acquisition of the West Pack business was perfect with the low cost before and after the Cobid recession. By integrating buyers, debt collection, and divisions, the synergistic effect should be enormous, as Kina can get a great scale effect, and in the worst year, instructions to reduce duplicate costs.

In rea l-time, Kina is considered to be the number 2 banking bank in the Papua New Guinea, and has the ability to be sampled by the initial fund coefficient (CET1). There are 20 levels that are considerably larger than the Australian bank.

It is an ambiguous issue to see how much the number 2 of Bank 2, which has a capital power in Papua New Guinea, but considering that bank promotion is traded in a predictable yield of more than 2022, it is the highest year. You may receive a dividend or refund.

Undoubtedly, Kina is responsible for its own danger. The judicial system is vulnerable and the access to the law enforcement agency is poor, so it is easy to get caught up in crime, and is susceptible to financial crisis and unstable district economy, which can fall in credit rating. The configuration, corruption, and political turmoil are also likely to be a disability.

However, Kina has expanded its business in this area, shows its own legal ability to pay dividends, has acquired its own powerful rivals, and establishes its status as a number 2 bank in this area. I did it. Kina will never have a maximum magnification bargain, but in 2022, four times the profit is expected, and 18 % of the yield is expected without a franchise, so if the West Pack is safe, if the West Pack is safe, Shareholders have a good chance to achieve bad results as long as they overcome the Met Risk.

Note: This manufacturer has Donaco-Promotion (entertainment host).

Important: Intelligent Investor is issued by InvestSMART Financial Services Pty Limited AFSL 226435 (the Licensee). This information concerns general advice on financial products. Before making any investment decision, you should consider your personal objectives, financial situation and needs and consult the Product Disclosure Statement. InvestSMART Funds Management Limited (RE) is the manager of various managed investment schemes and is a related party of the Licensee. RE may own and buy or sell the shares offered in this article during or after publication. Such transactions may affect the share price. All returns are historical and are not indicative of future performance.

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For more information on the companies featured in this article, click on the companies of your interest. Donaco International Limited (DNA) | Kina Securities Limited (KSL) | Myer Holdings Limited (MYR)

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The content below is a combination of human-created and automatically generated. This section is currently in beta testing. If you would like to report inaccuracies, please contact analyst@intelligentinvestor. com. au.

What is the concept of cigar investing?

Cigar investing is a strategy where an investor looks for companies that may not be in their best shape but are cheap enough to offer a chance to sniff the last of value. It's like finding a lingering puff of smoke in a discarded cigar butt. Stickiness is the profit that can be made from a company before it goes bankrupt.

Who is famous for the cigar butt investment strategy?

The cigar butt investment strategy was made famous by Warren Buffett early in his career. However, he later moved away from the strategy, preferring to invest in quality companies at reasonable prices.

What are some examples of "cigar butt" stocks mentioned in the article?

The article gives several examples of "cigar butt" stocks, including AMP, Myer, and Unibail-Rodamco-Westfield. These companies are struggling, but are considered cheap enough that they could suffer a final sell-off.

Why did Warren Buffett move away from his "Cigar-Ass" investing strategy?

Warren Buffett has abandoned the "CigaretSignslab" investment strategy. In fact, he was able to get a great cost with a very highly possible cost and a wonderful cost than a wonderful company.

Cigar Bat "What are the risks associated with the investment strategy?

The risk associated with the cigarbat investment strategy is that investment companies may own the lon g-term disadvantageous odds. But they have all the possibilities to provide the opportunity to make the last jerk, still have a risk, in fact, they have all the possibilities to keep struggling and lose their own investment. I have sex.

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