PANAMY (3719) or its full name Panasonic Manufacturing Malaysia Bhd is publicly listed in the Malaysian market in 1966. After 50 years, it is still generating cash like clock-work.
I was surprised that 90 % of its equity is coming from profits. In other words, the shareholders only contribute about 10 % of the capital while the rest is coming from retained earnings. It seems to me that the company is generating more cash faster than it could spend.
Cash is king. – Najib
Its return-on-equity, ROE, is 17 % with no practically no debt. Using the rule of 72, PANAMY could double its assets (mainly cash) in under 5 years without the need to increase its liabilities.
ROE and rule of 72
Example: with a return of 17 %, you could double your capital in less than 5 years (72 / 17 = 4.23 years).
This is equivalent to saying that: If you were the owner who had $ 1 million invested, you were entitled to $ 200 thousand of the earnings each year.
The engine of growth is still on
Cash-cow PANAMY: Idiot-proof business
PANAMY is an idiot-proof business with well-known brand where you generate more money than you can spend by selling fans, rice cookers, vacuums, etc. In my home at Miri, I found Panasonic products everywhere.
It is an ideal stock for retirement. Another good news is, it pays good dividends too at around 4 %.
Let see if its stock price doubles in 5 years time.