Success in Stock Market through Value Investment
Why UEMS now? Buy before the proposed location of HSR finalised.
1. Almost 40% discount to RNAV
2. Biggest land bank for Iskandar stories at highest population growth zone (Zone B of Iskandar)
3. Proposing HSR station at Gerbang Nusajaya, which will be finalised soon and completed by 2027.
4. An independence cross border research is done for analysing strong fundamentals and opportunities for the sole developer with 4551 acre Land at Gerbang Nusajaya.
Penny but potential stock, timing to enter is the winning key, every time it's fall back 0.13 will rebound back. This time rebound is making another new high. So, expected will start correction before it's start another rebound. This time which level of collection price? I guessed 0.15.
BREAKING NEWS
April 25
Tanah Makmur's major shareholder, Pahang Crown Prince Tengku Abdullah, proposes to privatise the company at RM1.80 per share or RM285.13m
Sometimes value investing cannot work...Therefore Step 5 is very important to escape from the risk if we able to predict the outlook well. But, of course very difficult.
Globetronics
Fresh guidance from management. 1Q16 operating profit will be down 30+% due to weak demand from Heptagon as end customer rationalize their inventory. 2Q16 outlook for the proximity sensor also does not look good (10m units per month or below from 13m units per month in 1Q16); management doesn't discount that there could be a new competitor producing the proximity sensor or a design out (meaning a new sensor replacing the proximity sensor).
As for the 3D imaging sensor, adoption in 2016 model now seems unlikely with low volume forecast by client. 2017 adoption is more likely according to Heptagon.
Globetronics is one of the street's top pick with consensus earnings now at risk. Our forecast is on the lower range at MYR93m but still there is downside risk of about 30-40% should proximity sensor volume falls to 10m per month going forward and zero adoption of 3D imaging sensor.
1Q16 results will be released tomorrow. Share price has already started to react to this.
My 5 simple steps will lead me to simple but effective value investing. My way to minimise the risk and maximise the gain.
Step 1: Check the PNL. Profit? Potential turnaround to profit?
Step 2: Check the cash flow. Where is the money generate? Where is the money go?
Step 3: Check the Balance Sheet. Is it only left the shit (e.g debt)? Cash status? Retained earnings for potential bonus issue? NTA vs price? Fair value vs price vs NTA?
Step 4: Check the price status? Which wave? Uptrend? Downtrend? Consolidation? At peak? Measurement of margin of safety?
Step 5: How is the outlook of the existing business and any potential sales pipeline?
If score 1 or 2 points...forget it
If score 3 points...monitor closely
If score 4 points...collect slowly
If score 5 points...full force...sai lang
For sharing. In summary:
1. Syndicate find a company, discuss with the owner, collect the stock (take years to collect cheap).
2. Collection completed. Release or create fantastic good news. Push up the price, let the players aware. Players join the game. Push up the price again, let the next players join the game. Continue the process till the syndicate realise difficult to push up the price further. Release or create more fantastic good news and same time lock in the profit.
3. Continue sell the stock and players start aware the risk of holding the stock. By this time, syndicate almost completed the unloading. Players still buy again to average or wish for further rebound based on the creation of fantastic news. Syndicate start clearing last batch by dumping at any price. Price dip but players still feeling that this is only healthy correction. No support for next few days trade, price dump like no body want. Want cash don't want stock. Finally, players jail at high price for those still believed the fantastic news. The game is over, syndicate thanks to the players. Players said WTF.
Risk and reward - at this price trading at peak price, of course the risk at max and the reward is min.
Price is fully reflected.
Only a further grow of financial performance will able to bring it to next level. Let's see.
Release jail from stronger MYR. Wish the furnace blast able to resume production.
Look like the stock now hanging in between center. Go up or go down?
Chance to further dip is high!
Company not making profit so far, maybe high cost incurred in new business set up. Not really look into it as the timing yet to reach.
But, I did believed the online payment business is a future business trend.
Super bull drive by red bull. Aim the bull, aim red bull.
Fundamental report from RHB Research
11/4/16
1. Drbhcom (current price 1.09, TP 1.30)
- Maintain Buy
- the availability of new models and the injection of funding would help to tide Proton over in the near term.
- its key milestones would be the identification of a new foreign strategic partner and a solution to raise utilization rates
2. Fgv (current price 1.50, TP 1.41)
- Maintain Neutral
- FGV has called off the Zhong Ling Nutril Oils acquisition citing that it was unable to fulfil the conditions set out in the S&P agreement within the stipulated time.
Another new high pending to explore? What you think? Aim the value bull, aim the sushi.
I remembered I was bought the price at 0.10 before and sold 0.40. After that it keep continue trended up. But today news about the termination of contract which will has major impact to the company. I would said this will be structured impact to the bottom line of financial performance. This is value stock, unfortunately due to this change, quit the "aim" is the best strategy.
But the price trend look danger for me. I'm no brave to collect at such a "peak" price. I'm no willing to pay at this price as well.
How to read company balance sheet is very important. Why? This is the health status of the company.
In layman term:
Shareholder equity / fund and loan / borrowings = where is the money come from?
Equity = optional to give dividend (if make profit), sometimes determine by dividend policy.
Loan = borrowing from financial institutions e.g. bank. Need to pay interest.
Assets = where is the money go? Equity money or borrowing money use to set up business, build plant, buy machine, buy stock etc.
Therefore, a quality company or value stock mean manage the money (from equity or / loan) effectively. For instance:
-money use to buy machine able to increase output and improve product quality. Increased sales and profit margin.
-money use to take over profitable company. Diversification or synergy.
-money use to build a strong management team
-money use to buy quality raw material
-money use to buy latest machine to avoid obsolescence.
-money use in research and development to avoid technology obsolescence
-money use as dividend to reward shareholders and stimulate share price.
If you see a company keep loosing money, high debt, prolong negative cash flow money . So, if you buy the stock, you will likely have a sleepless night.
You don't need go so detail, don't need go any expensive seminar, you just need to understand few keys data, you will able know where is your risk of investment.
Next will write up why Profit and Loss account is important.
I think short term players will heavy "sell on fact" once it's resume.
PROPOSED ISSUANCE AND ALLOTMENT OF 559.00 MILLION NEW ORDINARY SHARES OF RM0.10 EACH IN AAB (“PROPOSED SHARES ISSUANCE”)
INTRODUCTION
On behalf of the Board of Directors of AAB (“Board”), CIMB Investment Bank Berhad (“CIMB”) and RHB Investment Bank Berhad (“RHB”), wish to announce that AAB had on 1 April 2016 entered into a conditional subscription agreement (“Subscription Agreement”) with Tune Live Sdn Bhd (“Subscriber”), an investment holding company owned by both Tan Sri Dr. Anthony Francis Fernandes (“TSTF”) and Datuk Kamarudin Bin Meranun (“DKM”) for the proposed issuance and allotment of 559.00 million new ordinary shares of RM0.10 each in AAB (“Subscription Shares”).
The Subscription Shares represent approximately 16.7% of AAB’s enlarged issued and paid-up share capital(1) , and are to be issued at an issue price of RM1.84 per Subscription Share (“Issue Price”) to be satisfied in cash.
The Issue Price was arrived at by mutual agreement between the parties to the Subscription Agreement based on the 5-market day volume weighted average price (“VWAP”) of the ordinary shares of RM0.10 each in AAB (“AAB Shares”) up to 31 March 2016, being the date immediately preceding the date of the Subscription Agreement, and on the basis that no dividends will be declared or paid on or after the date of the Subscription Agreement. On 31 March 2016, the Company declared a first and final dividend of 4 sen per AAB Share, of which the entitlement date is on 30 May 2016, subject to the approval of AAB’s shareholders at a general meeting to be convened (“Dividend Declaration”).
Accordingly, pursuant to the terms of the Subscription Agreement, the Issue Price shall be adjusted downwards by the equivalent amount to the dividends declared or to be paid per AAB Share under the Dividend Declaration. Hence, the Issue Price will be adjusted from RM1.84 per Subscription Share to RM1.80 per Subscription Share on the basis that the Subscription Shares are not entitled to the Dividend Declaration (“Adjusted Issue Price”). Based on the Adjusted Issue Price, AAB will raise a total gross cash proceeds of RM1,006.20 million.
http://www.bursamalaysia.com/market/listed-companies/company-announcements/5046813
If this is a take over with premium price, yes, the price will continue public shooting. Other than that, most of "them" will execution of buy on rumours sell on fact. Good luck. May the luck with u. Hope is not force with u, I mean force selling l.
Yes, you should do that.
My outlook for future:
1. Special dividend ~ 3 cents (still pending announcement ). Yield around 9%. Much better than bank. This is special payout from land sale. Refer my previous post.
2. Assets player with huge land and still carry history value. Market value can be surprising.
3. Price now in wave 1 ( my definition ). Quite and consolidate. Minimum risk of margin of safety
4. Rumours of PERAK CORPORATION take over.
When you're facing the challenges (treat it as testing), this will be the stimulus, how you choose to response is the key will determine the end result.
If you've bought in a value stock, that's said in the wave 1, the price still going down due to major trend impact e.g. weaken MYR, political issue. You realised that your book loss 20%. At this point of time, a stimulus hit in and requred your response.
Between stimulus and response is the freedom to choose. The bigger the gap between stimulus and response, then better of your choice. You can cut loss, or you can continue to hold it. What you need to do is just need to go back to your origin key driver decision to buy it. If it still valid, then continue to hold it (the mistake is only timing and timing is most difficult skill in investing) and vise versa.
Remember, you cannot change others, you only can change yourself how to react to stimulus.
