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Picture

Payback ‼️

August 26th, 2021
1.5 minute read

Finance 1.01
  • If you have down a finance degree, you probably spent quite a lot of time studying various projects to work out the IRRs, present values & payback periods.
  • This was to teach about making decisions on what to invest in.
  • The theory doesn’t always get used in practice… but it does work. Here’s three examples from stocks which we cover.

SIMP
  • First example is SIMP here in Indonesia. The last 12 months free Cashflow is 800 billion rupiah.
  • The non cash assets which they invested in are now 33 trillion rupiah. This would make the payback 41 years..
  • The market value of SIMP is 6.7 trillion rupiah which is 0.2X those assets & the shares are -20% the last 5 years.

AAPL
  • Next is world’s largest stock, AAPL. Last 12 months Cashflow is 96 billion dollars!
  • The non cash & financial assets which they invested in are 136 billion dollars. That means the payback is only about 1.4 years.
  • The market value of AAPL is 2.45 trillion dollars or 18X those assets & the shares are up 5.5X the last five years.

MRNA
  • Next is the most topical stock, Moderna… in this second quarter alone Cashflow was 7 billion dollars.
  • The assets which they invested in excluding cash, receivables & financial assets is 1.9 billion dollars. That makes their payback 24 days.
  • The market value is 161 billion dollars or 85X the assets & the shares are up 21.4X the last five years…

Lessons
  • The lessons of basic finance do work well in the real world. The faster the payback, the higher the valuation & share performance will be.
  • Here in Indonesia companies don’t make big enough sales & margins are too low.
  • But the current situation seems too extreme. The payback of basic materials is too low & downstream technology is too high.
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  • Asjmp
  • English
  • ABMM
  • ADMF
  • AVIA
  • BBTN
  • BISI
  • BLTZ
  • BNII
  • BNLI
  • BRMS
  • BUKK
  • BVIC
  • CMNP
  • CMNT
  • DLTA
  • DRMA
  • DVLA
  • DYAN
  • EAST
  • FASW
  • GOTO
  • HEXA
  • INTD
  • IPPE
  • ITMG
  • JIHD
  • KDSI
  • KIJA
  • MEGA
  • MERK
  • MMLP
  • MPMX
  • MTDL
  • MTEL
  • NFCX
  • NISP
  • OKAS
  • SLIS
  • STAA
  • STTP
  • TGKA
  • VICI
  • WEHA
  • WIRG
  • WOMF
  • Home
  • BERK
  • CVX
  • CVX
  • FB
  • GOLD
  • INTC
  • MAR
  • PEP
  • PG
  • TSN
  • TWTR
  • TXN
  • Presents
  • Kenny
  • Ranks
  • Palmweekly
  • Stockbit
  • TIRA
  • Meeting
  • MBAP
  • HTUFS
  • 7Steps
  • INTA
  • Model
  • MCOL
  • ESTI
  • Intern
  • Stockbitapp
  • SONA
  • Model1
  • Pdf
  • OBMD
  • PSKT
  • DGIK
  • Data
  • Above
  • IATA
  • mm
  • Untitled
  • Capital