Online stock filtering and screening by profit margins and profit growth

Beside analysing stock counters investability using Return of Equity (ROE) and Return of Assets (ROA), it is also imperative in fundamental analysis to evaluate the business profitability of the stock counters. This can be achieved by looking into their profit margins and profit growth rate.

Operating profit is the profit (i.e. revenue minus the cost of goods sold) derived from the company's core business operations. Operating profit margin is the percentage of operating profit portion divided by total revenue.

A company with higher operating profit margin usually has more room to give discount (i.e. temporary lowering the profit margin in order to secure a deal), and therefore more financially healthy.

Companies which are able to maintain a high operating profit margin all the time are usually having high competition barrier, protecting them from being forced into price war with competitors. 

The operating profit margin is usually going along with the industry. Industries with generally high profit margin including high technology, cosmetics, premium consumer brands, etc. If a company's operating profit margin is above its industry average, it indicates that its management team is more capable in bringing in business profit than its industry peers.

Pretax profit is the profit that takes into account both operating income and non-operating income. Examples of non-operating income including investment gains, forex gains, profit from selling out fixed assets, etc. Pretax profit is also known as earnings before interest and tax (EBIT).

Usually, a company will have pretax profit margin that is slightly lower than its operating profit margin. If its pretax profit margin is higher than its operating profit margin, it indicates that the company is making more profit from non-operating revenue than its core business revenue.

Here is an example to perform stock filtering and screening in Rakuten Trade based on profit margins.

Login to Rakuten Trade online trading website, select the Stock Screener menu, add a new filtering criterion, and select Operating Margin (%). Set its minimum to 35%.

Then, add in another filtering criterion Pretax Margin (%). Set its minimum to 30%.

Beside having good profit margins, we might also want to see the company's profit growth year by year. Therefore, select the 3rd filtering criterion Pretax Profit Growth Rate (%) and set its minimum to 10%.

You will instantly get the list of matching stocks on your screen, which is around 40 to 50 counters at the time being.

Combined with our 2 filters of ROE and ROA, the list will be left with only around 10 counters.

You will see some rubber glove counters in the list. The rubber glove industry has been enjoying an exceptional good profit margin over the past 2 years. The question you need to ask as an investor is that: does this good profit margin sustainable, at least for another upcoming year?

Note that companies with low profit margin does not necessary mean that their industry is not profitable, provided that they are able to generate their profit by high volume of sales. Example of such industries including grocery trading, essential food trading, etc.

If you don't have a Rakuten Trade account to access to the Stock Screener above, you can use this link to open a new Rakuten Trade account for free, including no charge for opening new CDS account. By opening account with the link, you can get 500 RT Points within 30 days upon your account activation. Beside that, if you start your trading within the first 10 business days after account activation, your first online trading brokerage fee will be rebated as additional RT Points as well.

Caltex RM5 cashback with CaltexGO pump-and-go mobile app

As you might have been aware, Caltex Malaysia has recently introduced the CaltexGO pump-and-go mobile app, available in Google Play Store and Apple App Store.

Apparently, it is the same CaltexGO mobile app already in used in Caltex Singapore and Caltex Thailand for the same purpose of enabling contactless and cashless petrol refueling at their petrol station.

This is an enhancement to the existing Caltax tap, pump and go system, which you need to slot in your JOURNEY card to collect BPoints, then tap your credit card or debit card at the petrol pump terminal to refuel your vehicle.

Now, with the CaltexGO mobile app, you can bind your JOURNEY card and your credit/debit card with your user account, and you can refuel your vehicle at Caltex petrol station even without bringing those cards along with you.

CaltexGO will auto-detect the Caltex petrol station you are located at with your mobile phone GPS location detection service. You just need to enter your petrol pump terminal number into the app, then lift the petrol pump and start refueling. When you put back the pump to the terminal, your bill will be instantly generated, and you just tap a confirm button to pay for it. Your JOURNEY card loyalty points will be automatically credited too.

Currently CaltexGO in Malaysia only support VISA or Mastercard credit card or debit card. Hopefully e-wallets will be included too in the future.

As a welcome offer to encourage usage of CaltexGO mobile app, Caltex Malaysia is currently giving out RM5 cashback for petrol refueling of RM30 and above, until 31st December 2021.

Your RM5 cashback will be automatically used during your next petrol refueling of RM30 and above at Caltex station using CaltexGO. You will see it as "promotion discount" in your bill, as shown above. Your bills are paperless and stored in your app, so you can always track back your historical petrol refueling transactions in Caltex station.

This means that you will not immediately get the RM5 cashback during your first time using CaltexGO to pump petrol of RM30 and above. The next time and all subsequent times you do the same, you will get the RM5 cashback automatically, until the end of promotion period on 31st December 2021.

RM5 is equivalent to 16.67% of RM30, which is a pretty good offer, isn't it?

Malaysia year 2022 national and state public holidays

The official 2022 national and state public holidays in Malaysia has been announced by Cabinet, Constitution and Inter-Government Relation Division (BKPP), Prime Minister Department.

There are 14 days of national holiday (12 national holidays, whereby Chinese New Year and Hari Raya Puasa have 2 days of holiday respectively, and all the rest are 1 day).

1 of them fall on Friday, 1 fall on Saturday, 5 fall on Sunday, and 2 fall on Monday. Most of the states will have around 4 state holidays in addition to the national holidays. 

Kelantan and Terengganu will have 1 additional holiday for Hari Raya Qurban.

Chinese New Year falls on Tuesday and Wednesday (1st and 2nd February 2022). I believe many people will take a few days leave during the period, namely Monday, Thursday and Friday, so that to enjoy a whole week holiday.

Hari Raya Puasa falls on Tuesday and Wednesday too (3rd and 4th May 2022). Good news is, Monday 2nd May 2022 is also a replacement holiday for Labour's Day which falls on Sunday 1st May. Therefore, you can have another whole week holiday by taking leave on Thursday and Friday.

Deepavali falls on Monday (24th October 2022), so you will have a long weekend.

Click here to download the table of Malaysia year 2021 gazetted national and state public holidays.