Investing For Value

Tips E-45: A 1-minute summary of my fundamental analysis of Amkor Technology (NASDAQ: AMKR)       Investment Thesis Amkor is well positioned for semiconductor growth, but value creation remains constrained by persistent margin pressures. The company benefits from exposure to AI, 5G, and automotive electronics and has delivered strong revenue and earnings growth. However, through-cycle returns have generally remained below its cost of capital, suggesting limited shareholder value creation despite sound operations. Main Business Amkor is a pure-play OSAT provider focused on packaging and testing semiconductor devices worldwide. Growth Revenue grew at a 9.1% CAGR from 2015 to 2024 despite industry cyclicality. Growth was supported by successful transitions from mobile devices to automotive, computing, AI, and 5G applications, demonstrating the company's ability to evolve with customer requirements. Profitability Profit growth was driven more by scale and fixed-c...

Value Investing Case Study 130-1: A fundamental analysis of Hartalega Holdings Berhad to assess whether it is an investment opportunity.      For years, Hartalega was one of Malaysia's best-run companies, known for innovation, automation and strong returns. Then the pandemic sent glove demand and profits to unprecedented levels. Like many industry players, Hartalega expanded aggressively to meet what appeared to be a structural increase in demand. The problem? The boom proved temporary. As demand normalized, the industry was left with too much capacity. Hartalega's production facilities became underutilized, causing margins and returns to fall sharply. Yet my analysis suggests that the issue is not a loss of competitiveness, but rather the after-effects of overexpansion. Despite the recent downturn, several strengths remain. It has a strong balance sheet with RM1.1 billion in cash and excellent long-term cash generation. Among major glove manufacturers, Hartalega...

This is Chapter 15 of my book Mastering Value Investing: Practical Strategies for Real-World Results . Go there for links to the other chapters.   In Chapter 15 of Mastering Value Investing, I explain why I never rely on a single valuation approach. Instead, I cross-check value from different angles to avoid being fooled by optimistic forecasts. Here are some of the key insights: The balance sheet can reveal your downside risk. Book value, net tangible assets, liquidation value and reproduction value provide clues about what a business might be worth even if things go badly. Asset values help establish a valuation floor. Rather than relying solely on accounting numbers, I also show how AI-assisted industry data can estimate the real-world cost of rebuilding a business. This provides an economic reality check on asset values. Peer comparisons are not as straightforward as they appear. Different accounting policies, capital structures and business models can make "compa...

Tips E-43: A 1-minute summary of my fundamental analysis of Progress Software Corporation (NASDAQ: PRGS)     Investment Thesis Progress Software combines durable software moats with strong cash generation, but acquisitions rather than organic growth drove the story. Long-term attractiveness depends on whether management can convert its enlarged product portfolio into sustainable organic growth and improved efficiency, neither of which has been convincingly demonstrated. Main Business Progress Software provides the infrastructure tools that enable enterprises to build, secure, and operate critical applications. Revenue is increasingly subscription-based, with maintenance contracts still forming the core of the business and the US contributing slightly more than half of total sales. Growth Revenue expanded at nearly 10% annually, but acquisitions rather than internal expansion were the primary engine. Management is emphasizing AI-enabled SaaS offerings, but given it...

Value Investing Case Study 129-1: A fundamental analysis of Genting Malaysia Berhad to assess whether it is an investment opportunity.     Over the past decade, Genting Malaysia has quietly transformed itself from a Malaysian casino operator into a global integrated resort group spanning gaming, hotels, theme parks, retail and entertainment. The strategy worked in one sense. Revenue has fully recovered from the COVID-19 disruption and has surpassed pre-pandemic levels. But there is a puzzle. Despite higher revenue, profits and shareholder returns have not recovered to their former highs. Has Genting Malaysia sacrificed profitability in exchange for a larger and more diversified business? The answer is not straightforward. On one hand, the Group now has a much larger asset base and derives revenue from multiple sources. Management has also improved asset utilization and capital efficiency, suggesting that the company may finally be entering the harvesting phase aft...