SCH - the change of wind

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?

Aim the bull: SCH business is trading quarry machine and equipment. Last year due to stonger USD and GST impact, the sales seriously affected. However, the company still able to maintain profitable.

Score : 1 due to still profit despite business slow down.

Step 2: Check the cash flow. Where is the money generate? Where is the money go?

Aim the bull: Cash and debt about equally same. But still able to pay dividend.

Score: 0 due to not a net cash company.

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?

Aim the bull: Manageable debt but risk of cash flow if business continuely no improvement. High retain earning but partly offset by merger deficit.

Score: 0 risk of debt default if business continue slow down

Step 4: Check the price status? Which wave? Uptrend? Downtrend? Consolidation? At peak? Measurement of margin of safety?

Aim the bull: Price still at bottom level, no sign of recover. If you noticed the history movement, it will rebound after touching 0.20.

Score: 1 due to better margin of safety.

Step 5: How is the outlook of the existing business and any potential sales pipeline?

Aim the bull: Below is my outlook which will lead to better performance or turnaround:
1. Stronger MYR able to import machine and equipment at better price.
2. GST impact slowly realignment to demand.
3. Mega infrastructure projects kick off soon e.g. Pan Borneo and MRT 2 projects will lead to higher demand of capital and operating spending for quarry operators.

Score: 1 due to "wind will change"

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

Overall 3 points...the risk is the wind still stay no change i.e. USD continue rise up and slow implementation of the mega infrastructure project.

Stock movement = Human nature

There is nothing new on Wall Street or in stock speculation. What has happened in the past will happen again, and again and again. This is because human nature does not change, and it is human emotion, solidly built into human nature, that always gets in the way of human intelligence.
"Of this I am sure."
-Jesse Livermore

This is explained why stock movement pattern can be detected with your TA and FA skill and most important your "feeling". What you need is a simple trend analysis, able to understand simple financial data, and most important based on your reading how you feel it, feel good, feel risky, feel high chance, feel must buy, feel must let go now... your feeling will be your final decision.

This will a "basic" to enter a buy or sell, even you make a wrong decision, you will still happy with it as this is your decision. Also, you learned from mistake, your own the mistake, and willing to accept it.

No need to attend expensive workshop, just follow aim the bull 5 steps. :)

Human Mind...

D&O financial performance health check update

PnL profit by quarter before tax increased, so good sign. Then how about cash flow, is it improve? Good profit doesn't mean good cash flow in, need to further check. 

Ok, that's look good. Operating cash flow positive mean is real cash generated by real profit. The cash use to reduce bank borrowing and reduce interest cost as well. Sometimes the profit increased can be from non cash item, therefore need to be very careful to check for completeness as complete as possible or a better full picture. Don't fall into trap of fantastic PnL performance. Cash flow is another checking point. That's easy right? 

No need to attend any expensive workshop, just use aim the bull  5 steps measurement can help you avoid unnecessary loss. For instance, VIVOCOM showing so nice profit, but poor cash flow, then you know what I mean

D&O - Getting stronger from automotive market

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?

Aim the bull: Profit growing with higher sale mainly from better margin automotive product sales pipeline. As automotive product required more stringent quality level, therefore is not easy for competitors to come into the business to share the cake. As D&O already successful penetrate into this market, this will be sustainable income for next few years.
Score : 1

Step 2: Check the cash flow. Where is the money generate? Where is the money go?

Aim the bull: After cash received from Epistar (big LED coy) to join development together, company cash level improved but still is not net cash company. Cash mainly spend on machines and R&D project. My thinking, R&D is very important spending to move company forward. If company is keeping at same position is equal to waiting to game over.

Score: 1

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?

Aim the bull: Price trading at above NTA. Cash and debt at manageable level. Mainly PE play. The continue profitable and positive cash flow is under monitoring by Aim The Bull.

Score:0

Step 4: Check the price status? Which wave? Uptrend? Downtrend? Consolidation? At peak? Measurement of margin of safety?

Aim the bull: Still in downtrend process. Price now trading at 0.30. Worth to close monitoring. My way is don't chase the high or the peak. Go search any stock with high chance to rebound. D&O can be the next, and need a better financial result to trigger it rebound.

Score: 0.5 as I'm not sure 0.30 is bottom.

Step 5: How is the outlook of the existing business and any potential sales pipeline?

Aim the bull: I like Green tech business. I monitor D&O because the automotive LED business outlook is very promising as now many new cars start to change conventional car light to LED light due to its lower power consumption, therefore this is a sun rise business and with attractive margin.
Score: 1

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

Overall 3.5 points...the risk is the price might not bottom reaching yet and fluctuation of techno business cycle.

Higher profit and tax recoverable

Take note of high goodwill value with risk of write down as a loss, cash mainly from. proceed from share subscription by Epistar. High inventory level also risk of material scrap if business slow down. High borrowing but manageable as sales is increasing with profit. Remember sales increase without profit will damage cash flow.

Higher spending in R&D to avoid the company outdated. Cash from operating still in red, manage to get new fund. I forsea if the automotive product mix ratio increased will lead to better margin and better cash as well. Remember company must generate profit with positive cash flow. Do not trap by high profit but cash in red.

VIVICOM - Profit and Loss very nice performance but...

Sales and profit look fantastic up. But, this is not a whole story yet.

The operating cash flow still in negative, that's not a good sign. Mean it need money from somewhere to support the business. Lucky that's private placement, to support the normal businesses activities to avoid stuck. Private placement always better than borrowing from bank.

Goodwill is something not tangible assets, you cannot touch it, u cannot see it, u can only feel it. Be careful for such of big value, it tend to risk of write down. Can gone any time from now. Unless you have intangible assets like facebook, google, Microsoft, etc, or else pls be worry.

As VIVOCOM trading at peak price but still within the uptrend line, so need to monitor closely. Any big drop and not able to reach back to its uptrend should be decided a profit lock or cut loss (if you're at the peak).

It just aim the bull opinion, so decision always on your side, I might be wrong due to lacking of information.

Refer 5 Steps to further understanding. 

MJPERAK - Injection theme park business and live in Bursa

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?

Aim the bull: Yes, 2015 profit mainly from sale of land. The rest of businesses so so only.
But, new sales pipeline is coming like affordable housing project but still in early stage.

Step 2: Check the cash flow. Where is the money generate? Where is the money go?

Aim the bull: After cash received from land sale, pay to the mother company for the borrowing, it is still in net cash. Good news is dividend will be given.

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?

Aim the bull: Book value still undervalue as assets still in historical price. NTA 1.13 vs price 0.30. Damp, too cheap. But this is normal property stock trading below NTA. Therefore, need more land sale for book value update. So, risk to buy at 0.30 is damp low, safe and save.

Step 4: Check the price status? Which wave? Uptrend? Downtrend? Consolidation? At peak? Measurement of margin of safety?

Aim the bull: Mega sale discounted price! Margin of safety is best.

Step 5: How is the outlook of the existing business and any potential sales pipeline?

Aim the bull: Green tech business, Movie Animation Theme Park might use MJPERAK to list in Bursa. This is purely my outlook only, not an insider information.

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

Overall 4 points...the risk is no sustainable and profitable business as is now except land sale business.

RGB - penny but pretty

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?

Aim the bull: Yes, profitable. Able to turnaround after hit by Cambodia business crisis, lucky they able to relocate the machines to other location when government cancel the licensing.  Nevertheless, business now turn positive, double digit growing.

Step 2: Check the cash flow. Where is the money generate? Where is the money go?

Aim the bull: Net cash position now. Money generate from profit now, not borrowing.

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?

Aim the bull: Retained earning still in red, but expected turnaround soon. Overall balance sheet health look good. No suspected value in risk.

Step 4: Check the price status? Which wave? Uptrend? Downtrend? Consolidation? At peak? Measurement of margin of safety?

Aim the bull: Now in consolidation price. Good for entry, i always like to buy at consolidation mode or bottom mode. Or when no public shooting. I don't like join the crowd to rush for buy.

Step 5: How is the outlook of the existing business and any potential sales pipeline?

Aim the bull: The management now smarter in handle risk management, business now start growing aggressively, ambitious team, visionary boss. Outlook promisingly.

All check: green light to go buy
Next Strategy : Buy in batch.
Target price: 0.30 but i wish it can be my 2nd IFCAMSC selection move.

Trade @ own risk

GTRONIC - Today top down

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.

Aim the bull 5 steps for value investing

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