EPF is not buying Nestle’s products but it is buying Nestle’s listed shares on almost every trading day which you can see from the company’s announcements.
The price chart below shows the share price of Nestles. The average price in the last 9 months is about Rm 1.46 per share
The above table shows that EPF has been buying Nestles on almost every trading. On 1st March 2019, EPF reported it bought 10,700 shares on 26Th Feb. and it has a total of 18,030,200 shares which has an open market value of 18,030,200 X Rm 146 = Rm 2,632,409,200. All this money came from EPF contributors.
4th quarter ending Dec 2018 EPS 52.6 sen
3rd quarter ending Sept 2018 EPS 58.72 sen
2nd quarter ending June 2018 EPS 70.82 sen
1st quarter ending March 2018 EPS 98.6 sen.
Nestle’s quarterly profit has been dropping is the last one year. That is why its share price is not moving higher. Its last traded price is Rm 149 per share.
Obviously EPF does not know how to select good shares to make money for you.
KYY Share Selection Golden Rule: Nestle does not comply with my share selection golden rule which is the company must report increasing profit for 2 consecutive quarters and it should be selling at P/E below 10.
Everyone must know that when he buys any share, his aim is to earn from dividend and share price improvement. Nestles share price is not increasing and its profit has been reducing in the last few quarters.
Nestle’s EPS for the whole year 2018 was Rm 2.80 and it is selling at Rm 149. P/E is Rm 149 divided by Rm 2.80 = 53
P/E of 53 means that if you buy Nestle’s share at Rm 149 and if the company gave you all its profit, you can only recover you initial capital in 53 years.
As I mentioned EPF has a total of 18 million Nestle shares and based on its last traded price of Rm 149 per share is worth Rm 2,682 million. All this money belongs to the EPF contributors.
I hope you all will circulate the article to all your contacts and hope they will circulate it to all their contacts. Eventually our PM Tun Dr Mahathir and our Finance Minister Lim Guan Eng will read it and change some members of the EPF Board to save your money.
