DIGI

Ok guys, just bought 20 lots of DIGI at an average price of 4.59. Lets see what how much we can earn from there:

Why i like DIGI?

• Take their last year (2012) EPS and also their dividend. Their PE is ~11. Not very undervalued but nevertheless, it still provides me with a certain margin of safety. Im willing to take a certain risk.
• 2011 profit per share is 33.63...2012 profit per share is 41.81 (EPS+dividend)...take note that 2012 is a bad year for DIGI; with the tax structure higher that chipped away their profit, the network optimization progressed slower than anticipated that resulted in less aggressive customer conversion. However, they still managed to grow at an impressive rate of 24% PROFIT margin! 2013 will be where their network is optimized, no more tax to worry about....so make your own assumption.
• Potential for growth is immense. Telecom is the same as roads. We as a developing nation with one eye aimed at becoming developed nation. it is important to have a good telecommunications network. And Digi stands to benefit from that.
• Migrant sector is well defended. Awesome profit margin there!
• Youngsters LOVE DIGI. When you grab them young, they will likely stick with you for the rest of their lives unless something compelling urges them to change to another telco ( probable but highly unlikely)
• Growth in the data revenue. With more and more youngsters getting their hands on smartphones ( thanks to our Government) the data requirements will likely increase from the youngsters. ( refer to point number 4). Biggest beneficiary, DIGI
• Cost savings with their tie up with Celcom, potential to boost their bottom line.
• With the Government looking to allow foreign ownership up to 70% in telcos, Telenor is definite to buy up the stocks to make up for the 70%. Moreover, EPF is also definitely buying up the stocks so that they can generate the returns for their shareholders from DIGI dividends. When two behemoths are eyeing the same piece of pie, chances of it going up is high.
• DIGI is looking to change the company structure to a trust so that they can pay even higher dividends! when that happens, imagine the funds that will rush in to buy

Currently, all funds are eyeing DIGI but are afraid to go in. Either its because of the General Election or because they are just plain dumb ( im sticking with the latter)..truth is, its a wonderful choice.