Tuesday, December 28, 2010
The Trengganu government wishes to upgrade this tourist destination by putting up a duty-free shopping complex. It has allocated 20 hectares of land in one of the islands for this purpose.
Lake Kenyir is home to 8000 species of flowers, 2500 species of plants, 1000 species of birds, 370 species of orchids and much much more. Read more here.
EPIC is given the enviable task to build this shopping paradise. This is bullish for EPIC which is one of my picks for a profitable 2011.
To know more about EPIC, click here.
Friday, December 24, 2010
Today the stock had a good run. It opened trading at RM5.75 and moved up steadily. With 567 lots traded for the day, the stock hit RM6 at 4.40 p.m. with 120 lots traded at that price. It closed at RM5.96 for a gain of 26 sen for the day.
Now that this sleeping beauty is stirring in its slumber, I think it's time for it to wake up. By the first quarter of 2011, it should move up another 50 to 80 sen without much difficulty. But I am hoping it reaches this target within the rest of the trading days in 2010.
Who knows? It may actually be there in the next trading day.
Tomorrow is Christmas Day, and I wish all my Christmas friends, "Merry Christmas and a Happy & Prosperous Happy New Year."
Tuesday, December 21, 2010
Thursday, December 16, 2010
There are many reasons for these changes, such as change in management, risk profile, management team’s experience, foresight, financial appetite, over-gearing etc.
Prior to 2005, listed companies that are in this PN17 condition are classified under PN4.
Thursday, December 09, 2010
Gold’s Recent Decade-Long Run
Odds are, you’ve seen and heard a ton of advertisements for and news articles about gold over the past few years. Starting in mid-2001, gold has grossly out-performed the broad stock market indices, increasing four-fold versus the S&P 500′s 0% return.
Remove any decorative magnet from refrigerators
Remove any decorative magnet from refrigerators,
and put it far away from any food.
Interesting but very important finding!
A number of researchers at Princeton 's University have discovered something scary!
For several months, they were feeding two groups of mice:
The first group with food kept in a refrigerator, and the second group with food kept in a refrigerator as well but with several decorative magnets on the door.
The objective of this experiment was to see how electromagnetic radiation (that coming out from the decorative magnets on the door) affect food items.
Amazingly, rigorous clinical studies stated that the group of mice that consumed the “radiated” food had as much as 87 % higher probability to get cancer than the other group of mice.
Inexplicably no Governments or health associations, institutions have given any statement in this regard.
However and just in case, is recommendable to remove any decorative magnet from refrigerators, and put it far away from any food.
(The above article is sent to be by one of my blogger friends. If you are not sure what is what, remember:
Discretion is the better part of valor.
Prov. It is good to be brave, but it is also good to be careful.; If you are careful, you will not get into situations that require you to be brave. Son: Can I go hang gliding with my friends? Father: No. Son: But they'll say I'm chicken if I don't go! Father: Discretion is the better part of valor, and I'd rather have them call you chicken than risk your life.)
Tuesday, December 07, 2010
Among the emerging markets that have done well since 2009, Malaysia is placed 3rd place from the bottom. Indonesia gets the pride of place. Turkey gets the silver and Thailand gets the bronze.
Singapore stands at the 10th place among the 14 countries mentioned. Malaysia, being the laggard has a lot of catch-up to do. If it wants to get any where near Indonesia, there is a tremendous amount of space to cover. Does this mean that Malaysia is poised to move up fast from now?
One threat facing these emerging markets, according to David Sterman is: Inflation. Read more.
Sunday, December 05, 2010
The purposes of M & A are to enhance competitiveness, create cost-efficiency, boost revenue, and improve earnings per share. Hence, the rage when an M & A is announced.
A merger is different from an acquisition. When two companies combine forces to build a new entity, it's called a merger. A new name will probably come about for the new company. If Proton and MBMR merge, a new name, something like P & M may emerge as the new company.
When a big company takes over a small company, its called an acquisition. The small company simply disappeared while the big company retains its old name. The reverse of M & A are spinoffs and carve-outs.
An M & A is supposed to create a win-win situation. But not all M &As are bed of roses. Many have not turned out to be as lucrative as envisaged, and many are fiascos. One reason why an acquisition may fail is that the style of management of the acquiring company may not suit the old guards of the acquired company. Flexible working hours, a relaxed dress code and easy access to top management may become things of the past. This may create resentment resulting in shrinking production.
Thus when an M & A is announced, it may not be a time to cheer but a time to weep and fear. Nevertheless, an M & A announcement is often a catalyst that has a dramatic impact on the stock price. This creates the opportunity to make some fast bucks.
In an acquisition, the target company's stock price will rise the fastest. If you have the ability to identify companies that are likely candidates for takeovers, you hold the key to great wealth. Of course this ability does not come without much knowledge and experience. So it is not easy. But then, who says that money-making is easy?
They accounted for 28.38 per cent of the total value of trade in November worth RM39 billion, with local institutional funds accounting for 30.16 per cent of the value traded.
International investors' purchases are at their highest in more than one-and-a-half decade, as low returns from abroad and Malaysia's own economic liberalisation help attract investments into equities.
The appreciating ringgit, ease of credit and inflow of capital helped push Malaysia as the fastest growing market for mergers and acquisitions in the Asia-Pacific region this year with some RM21.3 billion deals on the table. Read more.
Sunday, November 28, 2010
The 3rd Qtr result shows EPS of 12.82 sen. For the 9 months ended 30.9.10, the EPS is 27.48. This compares favorably with the same period of the preceding year of 15.29 sen. This better result is achieved because of higher fruit production and higher CPO prices by 7% and 13% respectively.
In the hospital division, the number of patients increased by 5%. The brings about an improvement in revenue and profit by 16% and 38% respectively.
The torn in the flesh continues to be in the poultry industry. Weak demand for processed chickens weakened prices. The sector lost 0.4m for the 9 months. (The company should switch this sector to swiftlet farming.)
Looking ahead, I expect better days for TDM. For the month of October, 2010, fresh fruit productions have increased to 62,127 metric tons from 54,109 in September. This upward trend of fruit production coupled with good CPO prices which are expected to be maintained should result in TDM having an excellent year. My estimated EPS for TDM is about 42 sen per share.
As at 30.9.10, its cash position is extremely strong at RM121,971,000. I am expecting it to pay a dividend of not less than 15 sen per share for the financial year of 2010.
At the last traded price of RM2.43, there is upside potential for TDM. Hold on to your stock unless you have a better stock to switch to.
As usual, you buy, sell, or hold at your own risk absolutely.
Have a great day!
Friday, November 26, 2010
Thursday, November 25, 2010
Friday, November 19, 2010
What you may not realise is that a cholesterol caused stroke could occur anywhere in your body. If the cholesterol doesn't kill you, it can still be very disabling. I saw a photo of foot that had had a stroke caused by cholesterol. It looked yuk and the person may have been going to lose it.
People can lose their eyesight when cholesterol deposits build up in the blood vessels feeding the eyes, even dementia may result from the effects of cholesterol buildups in the veins and arteries feeding the brain.
High cholesterol is not a game, you may feel well, but cholesterol can still be doing it's thing... That's why cholesterol is called a silent killer. Read more.
Wednesday, November 17, 2010
Chairman Tun Musa Hitam told shareholders that Sime would leave it to the MACC and SC to take further action against those responsible for the losses. Read more.
Tuesday, November 16, 2010
Third Quarter 2010 Financial Results
The Company recorded total revenues of $25.9 million for the three months ended September 30, 2010, an increase of $8.2 million or 46.4% compared to $17.7 million for the three months ended September 30 2009. The increase in revenues was primarily due to the sales generated from the electric vehicle business, which the Company acquired on May 4, 2009. Sales of electric vehicles for the three months ended September 30, 2010 were $13.9 million, compared to $6.7million for the three months ended September 30, 2009. Read more.
Monday, November 15, 2010
• Contract marks Company’s first project in Libya • Plant to produce 40,000 m3 of desalinated water per day
Singapore, 15 November, 2010 – Mainboard-listed Hyflux Ltd (“Hyflux” or “The Company”) has been awarded a contract worth about USD 100 million to carry out engineering, procurement and construction (“EPC”) works for a seawater desalination plant at Tobruk in northeastern Libya. The project is the first in the country for Hyflux.
The contract was awarded by the General People’s Committee for Utilities of the Great Socialist People's Libyan Arab Jamahiriya (the Ministry of Utilities in Libya), the result of an international bid held earlier in the year.
The desalination plant, which will use reverse osmosis technology, will produce 40,000 m3 of desalinated water per day when fully operational. Construction works will commence upon satisfaction of conditions set in the EPC contract and will take 24 months from receipt of the Notice to Proceed.
Ms Olivia Lum, Group CEO of Hyflux, said: “Even though this project is not as sizeable as some of our other projects, we are pleased with our increasing presence in North Africa beyond Algeria.”
The contract also includes operations and maintenance of the desalination plant for a period of three years from the start of commercial operations of the plant.
Sunday, November 14, 2010
Revenue grew 11.2% to RM3.6bil compared with RM3.3bil.
The divestment of the glass operations resulted in a gain of RM382mil. Read more.
Saturday, November 13, 2010
Its revenue shed 24% quarter-on-quarter (q-o-q) to S$744.02 million from S$979.26 million while posting earnings per share of 1.5 cents versus 3.27 cents in the second quarter.
Market consensus expected a drop in profits but not an over 50% plunge in the quarterly earnings. Analysts said the sharp decline could be an indicator that the excitement over the opening of a new casino has waned in the republic. Click here to read more.
Thursday, November 11, 2010
Posted Nov 10th 2010 10:40AM by Steven Halpern
Filed under: International Markets, China, Newsletters, Stocks to Buy, Green Stocks
"China is quickly becoming the global leader in the development and production of alternative energy technologies," says Keith Fitz-Gerald.
The editor of The New China Trader suggests, "One way to play the trend is with Advanced Battery Technologies (ABAT), which engages in the design, manufacture, and marketing of rechargeable polymer lithium-ion (PLI) batteries.
"Founded in September, 2002, Advanced Battery Technologies is officially based in New York. However, it also keeps executive offices in Beijing and Hong Kong, while its manufacturing facilities are in China -- so for all intents and purposes this is a Chinese company.
"The company's PLI batteries are used in electric automobiles, motorcycles, mine-use lamps, notebook computers, and walkie-talkies, as well as other electronic devices.
"With hybrid vehicle technology moving closer and closer to the forefront of many global automakers' agendas as the world attempts to move away from fossil-fuel-based transportation, ABAT's PLI technology could fuel (pun intended) company profits for years to come.
"Speaking of profits, from 2007 to 2009, the company saw revenue and net income increase an average of 43.85% and 45.2% (respectively).
"That's great growth, and with a share price of only $3.99 and a PE of merely 7.70, this company is cheap.
"It sports a very impressive 42.11% profit margin and equally impressive 25.55% ROE, not to mention, it is sitting on $62.4 million in cash and has no long-term debt.
"With a market cap of just $270 million, ABAT still has enormous room to grow in the future. As a matter of fact, Wall Street tags a one-year estimate on the company at $6.00.
"But considering it has beat its last three earnings estimates by an average of 59.04%, I wouldn't be surprised to see the company exceed that price target.
"Buy a 50% position in Advanced Battery Technologies under $4.60 and plan on adding the remaining 50% if ABAT trades below $3.50."
Steven Halpern's TheStockAdvisors.com offers a free daily review of the favorite stock ideas of the nation's top financial newsletter advisors.
Wednesday, November 10, 2010
HwangDBS Investment Management Bhd chief investment officer David Ng said at a briefing yesterday that the local market could very well experience the bullrun of the early nineties when stocks were traded up to 30 times price-to-earnings ratio largely as a result of all the cheap money. Click here to read more.
Tuesday, November 09, 2010
The proposed disposal, once completed, will eventually increase the Terengganu state government's shareholding in Epic from 39.9 per cent currently to over 60 per cent.
Thanks to AZRB and the Terengganu state government, the price of EPIC shot up to a high of 2.62 when the market opened this morning. At the time of this post, the price is traded at 2.44 for a gain of 35 sen. If I am not mistaken, I think the price that AZRB agrees to sell is 3.099 sen per share.
Monday, November 08, 2010
Friday, November 05, 2010
Creating a false market is manipulation. While the man in the street will lose because of manipulation, professionals in the game of trading will win. These are the experts in chart reading. As for insider trading, the insiders have a very high percentage of winning. But sometimes, they lose as well. This is because "big snakes eat small snakes." Think about it; you will know what I mean.
For one general to succeed, thousands have to die. Thats what happened in a war. And when you are in the stock market, you are in a war. This is especially true when you trade or speculate.
Every trade you do is a battle between you and someone. If you make a profit, you are the winner and the smarter of the two. If you lose, it's the other way round.
Next time, when you are about to buy a stock, ask yourself why you are buying it. Is it for investment or for trading? How much do you know about the stock? How much do you expect to make? And how much do you expect to lose, if things go against you? Don't forget that you are pitting yourself against some of the best brains in the world.
The stock market is not the place for you to have some fun. Here, your hard-earned money is at stake. Be serious about it, or very soon your money will bid you farewell or say bye-bye, and leave you frustrated and demoralized.
Easy money is not easily made. You can be sure of that. Over the counter, you see nothing, but under it, much have been done. Plan your trade well. Remember this adage: If you fail to plan, you plan to fail.
Thursday, November 04, 2010
Greater KL/KV covers 10 areas namely Kuala Lumpur Putrajaya, Shah Alam, Petaling Jaya, Klang, Kajang, Subang Jaya, Selayang, Ampang Jaya and Sepang with a combined population of six million contributing RM263bil or 30% to the nation’s GNI. Click here to read more.
Wednesday, November 03, 2010
Its a great move for a better environment. I believe this ruling will be followed by other states and by other countries as well. Companies making plastic bags will be hit badly. Which are these companies that are listed at Bursa? Please share if you know. Thanks.
Monday, November 01, 2010
Wednesday, October 27, 2010
Wednesday October 27, 2010
Bentong council paid RM871 for a toilet sign
THE Bentong municipal council paid RM871 for a toilet sign when the item could be bought for only RM65.
This was one of many items the council had grossly overpaid to spruce up its Rest House.
The Auditor-General’s Report said the council had overspent on furniture and fixtures by RM80,594.
Among others, the council spent RM38,700 on a set of spiral pendant lights, although the market price for the item was between RM1,500 and RM9,200.
A total of RM49,420 was spent on 14 nyatoh timber leg armchairs, or RM3,530 each, although the market price for a unit was RM990.
The municipal council also paid RM5,379 each for two units of nya toh timber leg three-seater sofas, which cost RM2,040 each in the market.
Like the “Male” and “Female” toilet signs, other signs were also grossly overpaid.
A “bedroom number” that can be bought at the store for RM38 each cost the council RM542 each.
The council paid RM542 for the “surau” sign, which normally costs RM60.
Three sets of a certain type of wall light, which sells between RM165 and RM225 each in the market, were bought by the local authority at RM968 each.
These items – bedroom signs, toilet signs, surau signs and wall lights – were bought at what was deemed “unreasonable” prices and led to excessive expenditure of RM8,859, the report said.
During an audit check at the Rest House, nine shower curtains, nine curtain tracks, two wall lights and a receptical could not be traced.
The total value of the missing items was RM8,765, said the re-port.
Monday, October 25, 2010
This is a maglev train. The sooner we have one in Malaysia, the better. Imagine how much benefit we will get if we can travel from KL to Singapore in one hour. Land value in Malaysia is sure to skyrocket, esp. those in KL, Klang Valley and the Iskandar region.
Saturday, October 23, 2010
Lithium will be in great demand and this demand will continue to increase as HEV become more and more popular. This commodity is most efficiently obtained from brines (water strongly impregnated with salt). But not all salt water contains lithium. Seawater does not contain lithium.
The key component in the next-generation electric car batteries is lithium.
One company that is listed in the NYSE stands to benefit the most in this respect. This company has the largest deposits of lithium in the world, thanks to its salt flat known as Salar de Atacama in Chile. Because of its location and the quality of its water, lithium produced by this company is about 30-50% cheaper than other lithium miners. Another advantage for this company is that the climatic condition there is such that the company can work all the year round.
Besides lithium, the company also produces fertilizer and many other industrial chemicals. I think this company will do very well in 2011 and beyond. Its price is likely to shoot up.
If you wish to know the name of this company, please join as a member of this blog, and write me an e-mail briefly introducing yourself.
As to when is the best time to buy the stock, I can't tell you because, simply put, I don't know. You will have to figure that out yourself.
Those who are already members of this blog can SMS or call me to find out. My phone no. is: 016-9321849.
Friday, October 22, 2010
Hyflux and Japan’s Mitsui & Co Ltd (Mitsui), a global diversified trading, investment and service group, have tied up to form a formidable partnership to capture the growth opportunities in the water sector of China... To read more, click here.
Wednesday, October 20, 2010
Only 3% of the world's water is fresh. Each day, more than one billion people do not have enough fresh water.
China has a population of 1.3 billion which is about one-fifth of the world's population. It has, however, only about 7% of the world's fresh water.
Industrial activities in the country has made the situation worse. Many rivers are now polluted with chemical waste. There is a heavy price to pay if China does not take steps to quickly reverse the deteriorating atmosphere.
Every industry, be it pharmaceutical, electronics, construction, food and beverages, etc. need fresh water.
Luckily, fresh water can now be created by converting salt water to fresh water by a process called: Desalination. The company which has this technology is practically sitting on a goldmine.
I have been hunting high and low for a safe company that has the potential to become great, to invest. After much time and effort, I finally short-listed a few. Among them, there is one company which I like most. This company is a pioneer in converting waste water and salt water into fresh water. It is a leading provider of integrated water management and environmental solutions with operations and projects in Singapore, Southeast Asia, China, India, Algeria, the Middle East and North Africa.
Here's some info about the company from a source which is as follows:
From 2004 to 2009. top-line growth was +594%. Earnings rose nearly +250%. From 2002 to 2009, the stock has returned 826%. The stock is listed in the Singapore Stock Exchange.
Going forward, I think there are huge potentials for this company which has won many awards and is among the Forbes Best of 200. The company excels in special filters used in desalinization. In 2008, it was selected as the supplier for the largest plant in Algeria.
Some of you may know the name of the stock. But for those who do not know but wish to invest in the stock, they can send me an e-mail requesting for the name of the stock.
My e-mail address is at the top right-hand side of this page.
Tuesday, October 19, 2010
This sleeping beauty is well on track to hit RM6 by year end. Volume has improved slightly with an improvement in the price. The stock is likely to announce sterling performance for the quarter ended 30.9.10 as palm oil price has been doing well the past few months. At the time of this post, the stock has put on 24 sen and traded at RM5.36. Better prices are ahead, in my opinion.
Monday, October 18, 2010
Sunday, October 17, 2010
The Bentong Chamang Waterfall is indeed a sight to behold. Located about 12 km outside the Bentong town, it is easily accessible by cars and buses. During certain week-ends as many as ten buses have visited the place in a day. If you have not been there, it's time for you to plan a visit.
This place will do well if developed further. The clean water, fresh air and natural atmosphere with its lush flora and fauna greenery coupled with tall trees and mountains are ideal for a week-end retreat. At one time it was rumored to have a cable-car connection to Genting. Unfortunately, the idea did not materialize. If it did, Bentong would have been up-rated and up-graded.
Those with the financial muscles and the right connection should bid to privatize the place and turn it into a viable beautiful resort.
The money is there for the taking. The big boys should think about it.
To read more, click here.
Lemongrass, known as Serai in Malay is a tropical grass native to India & Sri Lanka. It has a pungent smell and is widely used in Asian cooking, especially in curry and seafood soup. The grass is also used for making perfumes. Used as a tea, it is said that the substance, citral, in Lemongrass, causes cancer cells to commit suicide. You can plant some at home in your planting pots and have them every day if you wish.
To know more, click here.
Friday, October 15, 2010
In some of my predictions I might be wrong, but on this one, I was right.
Below is an article about silver which I believe has plenty of upside in the years to come:
You Can Still Catch Silver's Rising Star
Christopher Barker October 14, 2010
These days it displays all the speed of a shooting star -- but shows none of the propensity for petering out.
I am speaking, of course, of silver, which is tethered to gold by the slingshot effect. Investors are witnessing that slingshot effect in action, as silver has surged briskly to bring the gold-to-silver price ratio nearer to the range of modern historical averages. Long-term, I expect silver to outpace gold until a ratio of about 40:1 is achieved, but at the present level of roughly 56:1, we are already well on the road to correcting the anomalous peak of 80:1 reached in 2008.
Silver's meteoric 36% rise -- from about $18 in late August, to more than $24.50 on Thursday -- has translated into some noteworthy moves among the shares of silver miners and explorers. Silver Wheaton (NYSE: SLW) has led the charge all year long, bringing my top stock pick for 2010 to an 84% increase year to date. Shares of junior miner Endeavour Silver (AMEX: EXK) have surged more than 50% since my mid-August interview with CEO Bradford Cooke documented his on-the-money call for a strong rise in silver prices. Popular Fool favorite Hecla Mining (NYSE: HL) has enjoyed a similar rise, though its shares have yet to record a fresh 52-week high.
Although I foresee a meaningful continuation of this secular bull market trend for silver (toward my long-term target price of $50 per ounce), I understand the difficult position that newcomers face in mulling fresh exposure to silver at these elevated price levels. Back in May, I proposed that any silver stock will do, but as the trend matures further, effective stock picking becomes increasingly significant as a means to ease concerns over downside risk.
When I want to sleep well at night while investing in a red-hot space like silver, I hunt for value. For newcomers seeking the widest value moat in the business, I recommend a careful look at major producer Pan American Silver (Nasdaq: PAAS).
At nearly twice the market capitalization of low-cost sensation Silvercorp Metals (NYSE: SVM), Pan American Silver is a well-established leader among primary silver producers that seems to garner little attention from investors. Following a long-awaited breakout through the $30 threshold, however, I suspect these shares could begin to rapidly close what I have presented as a meaningful valuation gap. This miner has a net cash position, holds massive untapped reserves, expects 23.4 million ounces of low-cost silver production for 2010, and even pays a small dividend. It is my contention that a major rift remains between the stock's present level and anything approaching fair value.
I am eager to hear your thoughts on the matter and encourage you to share your opinions in the comments section below.
As usual, you invest at your own risk absolutely.
Wednesday, October 13, 2010
About one third of the industrial waste water and more than 90 percent of household sewage in China is released into rivers and lakes without being treated. Nearly 80 percent of China's cities (278 of them) have no sewage treatment facilities and few have plans to build any and underground water supplies in 90 percent of the cites are contaminated.
To read more, click here.
Sunday, October 10, 2010
(Reuters) - Here are the key ways of mining lithium, a highly reactive material that is used in batteries for electric and hybrid vehicles. Demand is likely to double over the next decade as more electric vehicles arrive on the road.
Lithium is mined from three sources: lithium brines, spodumene and clay deposits.
Analysts generally agree that cost of production for lithium brines is about half that of spodumene, which is a hard rock. As a result, salt lake exploration has boomed.
Concentration: Not all salt lakes contain lithium, and in order to be cost effective, the concentration should be 600 mg of lithium per liter.
Magnesium: Too much magnesium can also cause problems, a ratio of more than 9:1 magnesium to lithium is considered uneconomical.
Evaporation: With brines, salt water containing lithium is pumped from the ground and into an evaporation pond. Filling the pond takes about a year, then the evaporation process can take anywhere from about eight months to three years.
MAIN BRINE PRODUCERS:
SQM - Atacama, Chile - over 1000 mg lithium per liter
Rockwood - Atacama, Chile - over 1000 mg lithium per liter
Rockwood - Silver Peak, U.S. - 200 mg lithium per liter
FMC - Hombre Muerto, Argentina - 600 mg lithium per liter
Bolivia - Salar de Uyuni - largest lithium deposit in the world
China - Zabuye, Dongtai, Xitai deposits in Tibet
With spodumene deposits, the rock must be mined, heated up to 1,100 degrees Celsius and then pulverized before the spodumene crystal are processed with acid to produce lithium.
Friday, October 08, 2010
Tuesday, October 05, 2010
Is Advanced Battery Technologies a Buy?
If you've followed the development of the lithium-ion-battery industry, you may have noticed that two kinds of companies emerging: companies that promise results and those that deliver.
For years, American battery makers Ener1 (Nasdaq: HEV) and A123 Systems (Nasdaq: AONE) have talked about the promise of their technologies and the number of partnerships they've developed with the automotive industry. Yet they have very little to show for all their boasting. But while we've been distracted by federal grants and presidential speeches, Advanced Battery Technologies (Nasdaq: ABAT) has built a profitable business overseas in China.
Part of Advanced Battery's success lies in its diversified product line of battery-powered products. Ener1 and A123 are still trying to build a business by selling to auto manufacturers, while Advanced Battery Technologies is running a business by selling electric scooters, bicycles, and sport-utility vehicles and providing batteries for electric motorcycles in the United States. Its business model is similar to that of Buffett pick BYD, which sells much more than just batteries.
The following table illustrates the contrast of potential versus reality. If the electric-vehicle market takes off, Ener1 and A123 could enjoy a big-time upside, but Advanced Battery Technologies already has proven revenue and profits.
Sources: fool.com, Yahoo! Finance.
No one really knows how the electric-vehicle industry will develop or how much of its promise will come true. But whatever happens, with these three companies you have a choice between the hope of earnings and proven earnings. I'll take Advanced Battery Technologies' proven track record seven days a week over the competition.
More on Batteries and Electric Vehicles:
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Saturday, October 02, 2010
As at June 30, 2010, PC has cash and bank balances of 231.64 million. From the sale of its JIB shares, it will add more than 130 million to its coffers. With so much cash in hand and little borrowings, PC is likely to give out some goodies to its shareholders. A bonus issue and a special dividend are possibilities. PC has a small paid-up capital of only RM117,482,000. Its par value per share is RM1.
EPS for the 6 months ended 30.6.10 was 36.23 sen. And according to the management, the group's prospects for the remaining 6 months are expected to be good. Using this figure to annulize, the EPS for the year would be 72.46 sen.
PC closed at 4.52 per share last Friday. At his price, the forward PE is 6.237. This is undemanding as the average PE in the property sector is much higher. If PC is rated at a PE of 8, which I think is not unreasonable, the price goes up to 5.80. Hence, there is still money to be made from PC if you buy the stock now.
The much-talked-about Economic Transformation Programme (ETP) which includes the mass rapid transit (MRT) and the high-speed train projects which if implemented successfully would result in rapid rise in the prices of land in Malaysia. This will boost the value of PC whose core businesses are in property development, construction, and education.
Stock prices are extremely difficult to predict. So, as usual, you buy or sell at your own risk absolutely.
Thursday, September 30, 2010
TDM secures Kalimantan site for plantation project
The company currently has planted over 1,000 hectares with oil palm trees on the land, he said.
"We target to plant 3,000 hectares by end of the year and 5,000 hectares for every subsequent year," Badrul Hisham said.
"It takes eight to 10 years to finish the Kalimantan project but when fully completed, it will basically double the size of the company," he said at a press conference here.
The company is currently in negotiations to secure another 15,000 hectares of land to achieve its target to manage 40,000 hectares of oil palm estate in Kalimantan.
TDM is a key player in Malaysia's plantation sector, managing 12 oil palm estates with a total of about 35,000 hectares in Terengganu.
Badrul Hisham said the Kalimantan project will provide a much bigger impact to the company compared to its hospital development project in Indera Mahkota, Kuantan, which is expected to be completed in early 2013.
On the hospital project, he said the company was about to conclude the 150-room modern hospital tender process.
"We will try to expedite the development process so that we can complete the project within our targeted date," Badrul Hisham said, adding that the standard contract period for the project is two years.
TDM has obtained its shareholders' approval on the proposed allotment and issuance of a total of 1.82 million new TDM shares under its employees' shares option scheme (ESOS).
At its extraordinary general meeting (EGM) in Kuala Terengganu yesterday, the shareholders also agreed on the proposed allotment of issuance of a total 305,000 new TDM shares to the chief executive officer under the ESOS.
Two resolutions to issue ESOS to each of the independent directors, however, were withdrawn before polling because the company wanted to be responsive to the opinion of the minority shareholders. -- BERNAMA
Reasons for Holding onto a Securityby Warren Buffett
We do not sell holdings just because they have appreciated or because we have held them for a long time. (Of Wall Street maxims the most foolish may be "You can't go broke taking a profit.") We are quite content to hold any security indefinitely, so long as the prospective return on equity capital of the underlying business is satisfactory,management is competent and honest, and the marketdoes not overvalue the business.
Wednesday, September 29, 2010
- It's something of an afterthought today, but Uranium was a really trendy investment a couple of years ago as crude oil was getting up near $140/barrel.
That was the summer of 2007, and right around then Mike and I were visiting a very large, very successful, very famous New York-based hedge fund that will remain nameless. Trust me, though. You've heard of these guys.
In every trader's office was a gigantic white board. We have a white board in our office too and it's where we sketch out all of our early-stage ideas. So I made a point to pay attention to the stuff on their white boards. It was sort of like being allowed to have a free peek at what goes on inside the mind of geniuses.
On nearly every single white board was "Uranium." Sure, that was then and this is now and a lot has changed since the world was staring down the barrel of peak oil and stratospheric power bills. But investing in nuclear energy was one of their major long-term macro ideas.
If this idea was good enough for one of the best hedge funds in the history of hedge funds, might it be good enough for the rest of us? Our long-term macro thesis is that we are on the doorstep of a decade of hardship and investors are going to have to work a little harder than they did during the last few decades.
Could Uranium and nuclear energy make life a little easier and more profitable for us all?
How nuclear works
Nuclear reactors are pretty cool. You know we like to talk about other things aside from the nuts and bolts of investing so I'll give you a quick, non-technical explanation of how it works. Remember that it is all connected; you never know where knowledge will take you, however insignificant it may seem at first.
Uranium-235 is one of the few elements that can undergo a fancy process called "induced fission." For the non-scientists, "fission" is just a fancy way of saying "division." Anyway, if you put a chunk of Uranium into a reactor and throw some neutrons at it, one of those Uranium-235 atoms will split and in the process release a couple of extra neutrons. Those neutrons will then collide with other U-235 atoms and cause those little atoms to split and release some more neutrons. The chain reaction continues. Every time one of these atoms split, energy gets released. It releases quite a bit of energy too: one little uranium fuel pellet contains the same amount of energy as an entire ton of coal!
If you put these Uranium fuel rods in some water when you throw neutrons at them, the surrounding water will heat up as all this energy is released. When the water heats up it turns into steam. Then we use that rising steam to turn a big turbine which generates electricity the same way a windmill does.
It's actually quite simple.
The good news about Uranium is that it's naturally occurring in the Earth's crust and there's a whole bunch of it out there. According to the OECD, there's enough uranium on the earth to last for at least a century at current consumption rates. It's not the solution to the world's energy demand woes, but it's a part of it.
The future for Uranium
Here's a chart of Uranium prices: (Click to enlarge)
As you can see, Uranium prices didn't really go anywhere for a long time. A lot of that had to do with the fact that pretty much everybody in the world stopped building nuclear reactors after Three Mile Island and Chernobyl, and so there wasn't any new demand. Politics also played a big role too as politicians weren't sure how to sell the issue of storing the nuclear waste. Keep in mind nuclear power plants don't pollute and there are plenty of ways to safely process the waste. But, whatever. The phrase "nuclear waste" carries certain connotations. Public perception and politics are the biggest hurdles for the industry and its future.
I doubt Homer Simpson has helped either.
But that perception is slowly changing as traditional forms of energy are getting more expensive and demand for electricity continues to rise. The U.S. has indicated that it seems to favor coal since we have so much of it, but nuclear energy will play a role too. It was a big part of Obama's and John McCain's campaigns, but Obama hasn't been as aggressive about pushing nuclear since he got elected. Hmm.
In any case, we're all getting a little more open-minded about the idea again and according to Gallup, support for nuclear power is at an all time high of 62%. That's good, but still nowhere near the support we show for other forms of energy. Ultimately, the only thing that will get the U.S. to really embrace large-scale nuclear development will be higher prices for coal, oil, and natural gas. The U.S. has a pretty good track record of compromising its moral values when it involves lower cost or higher profits.
On a cost-per-megawatt basis, nuclear is cheaper than wind and way cheaper than solar. But it's still more expensive than coal and natural gas, which in this country is suuuper cheap. (C'mon people, get on board with the Pickens Plan!) The Department of Energy just published a fairly comprehensive report about the relative cost of various forms of energy. It's worth a look. Watch these annual reports from the DoE and when you see nuclear becoming a relatively cheaper option I'd expect the U.S. to start to show legitimate excitement for it.
Other countries feel much differently about nuclear energy. France generates about 80% of its electricity from nuclear plants and they have the cleanest air of any industrialized country and the cheapest energy in all of Europe. South Korea is increasing its number of reactors by 50% and will eventually be generating over half of its electricity from nuclear sources. Would you believe that even the United Arab Emirates, the third largest oil exporter in the world, has proposed construction of 11 nuclear power plants? India currently has 6 plants under construction and another 23 on the way. China has a major energy need in the coming decade and nuclear power plants will play a major role over there. Last month, China made a big public announcement that they were going to buy a bunch of yellowcake this year and in the years to come. They're planning to build at least 60 new nuclear reactors in the coming decade and have proposals to build 120 more.
It takes a while to get a new reactor built and fully operational. But that's a lot of additional Uranium that the world is going to need. I think that the expectation of future demand has put in something of a floor in prices over the last couple of years. The bubble euphoria has died out and the market is now starting to look ahead towards the future with some sense of rationality. Prices make sense again.
On the supply side there was about 50,000 tons of uranium mined last year around the world. All of that uranium already had demand from the current marketplace, from existing nuclear reactors. To put China's plan into perspective, they alone may be demanding an additional 20,000 tons/year of uranium by the end of the decade. That new supply is going to have to come from somewhere or the price of the existing supply will need to increase to clear the market. It's simple economics, and quite beneficial if you're in the business of mining uranium.
That's a good way to execute our investment thesis too, from the supply side.
How to play it
This is a long-term investment. Uranium is for investors who are looking out a decade or two and want to add some interesting, alternative investments to their portfolio. A lot can happen between now and then. You can't just put on the trade and hop through the wormhole with profits waiting for you on the other side.
Anyway, the easiest and most direct way to do it is through the stock of a company that mines it.
Cameco (CCJ) is the first to look at. They're the biggest. They're a Canadian company which scores them points right off the bat. Canada has a better base currency and a government much less prone to monkeying around with the private sector. The regulation up there is not as onerous and inefficient as it is in this country, nor does it carry the same degree of political correctness, which matters with something like nuclear energy.
China has a contract with Cameco to buy a bunch of uranium over the next 10 years. There really aren't that many companies in the world as engaged in mining Uranium, so barring any meltdowns in China (and I mean that literally) the demand will be there for Cameco's product.
Cameco has an excellent balance sheet, too. They've got about $1.5 billion in cash, about $5 billion of Uranium reserves, and less than $1 billion of debt. They generate good free cash flow and their 34% profit margin is outstanding relative to their peers. If I'm going to make an investment in a company for the next decade or so, that's the kind of corporate foundation I'd like them to have.
It trades over 20 times next year's earnings. So the stock is a little pricey. But at least there's some firmness in the foundation. There are far too many stocks out there that trade at high multiples based only the promise of an idea, with neither sales nor a balance sheet to back that up.
Generally speaking, I'm a fan of the perspective that the ubiquitous Dennis Gartman is always promoting. He wants to own stuff that hurts if you drop it on your foot, stuff like gold, copper, steel and coal. He also likes the stock of companies that dig this stuff up out of the ground and sell it to countries that need it. Cameco is squarely in that category.
Paladin Energy is another to take a look at (PALAF.PK). They're based in Australia and they have a couple of mines working in Africa as well. They're a much smaller miner -- only about $115 million of revenue last year -- though they seem to be on the rise, developing new mines. They're not a bad bet if you want a little more spice.
Olympic Dam Uranium Mine
BHP Billiton (BHP) owns the world's largest Uranium deposit, Olympic Dam in South Australia. But Uranium is a relatively small portion of all the stuff BHP Billiton mines. If you want a bigger, broader, more diversified mining company then check 'em out. Their stock is somewhat expensive as well, trading a little over 20 times next year's earnings on the back of a simply phenomenal decade. The next 10 years aren't going to resemble their last, but relative to the rest of the market, you can do a whole lot worse than a company like BHP. They produce all the stuff that the developing world needs and they're a direct play on resource-driven global growth. Even we market bears need a little bit of that in our portfolio.
I also just noticed a nice interview over at Seeking Alpha that covers a bunch of other different uranium-related companies. Most of the names are small, but the article is a great supplement to this one.
From the demand side
You can also buy the stock of a power company that operates the plants. Exelon (EXC) is probably the best and certainly the biggest of breed. Over 90% of their power plants are nuclear and they operate the largest fleet in the nation and third largest in the world. It's a pure play on the energy generation side, a way to take advantage of rising U.S. demand for nuclear power should that someday happen.
These guys get me a little more excited, if only because they're a little more boring. I told you I was an odd bird. Exelon trades at only 10 times next year's earnings, but hey, they're a utility. Growing revenues isn't exactly their gig, but that could happen if the U.S. gets more serious about nuclear plants. They pay a 5% dividend which is very cool. And they only have about $11 billion of long term debt against $25 billion worth of power plants and another $25 billion of cash, receivables, and other assets. Their operating margins are also fantastic, underscoring the efficiency of nuclear power in general and their plants in particular.
It's interesting to see that trait on both sides of the uranium coin. Remember what we all learned in our college Econ classes? Firms with higher margins have better pricing power. That's really important in the world of commodities -- it's profitable for shareholders when demand is strong, and should demand weaken there's already a built-in cushion to absorb some of the slack.
Electricite de France (ECIFF.PK) operates the biggest fleet of reactors in the world and they've been doing it for a long time. Despite their $75 billion market cap, their stock only trades on the Pink Sheets in the U.S. If your broker offers global trading and the ability to buy stuff on the French exchange (Euronext) you might be better off doing it that way. Be aware of the currency risk, too. Your stock will be denominated in Euros!
If you'd rather not deal with that hassle, another option is the Market Vectors Nuclear Energy ETF (NLR). Electricite de France is the single biggest position in that fund and Exelon is number two. Plus, you get exposure to a basket of other energy companies and uranium miners. This fund was launched almost exactly at the peak of the Uranium bubble, which probably shouldn't come as a surprise. It was a sign of the times. The ETF hasn't performed very well since then, which also is not a surprise since Uranium prices have collapsed. But now that prices have stabilized there is potential on path from here forward.
As with any stock, these companies will fluctuate with the market. My guess, though, is that these are much better bets to outperform the market over the next decade than a lot of other companies out there.
A final caveat
Ultimately, I'm of the belief that the best way to play alternative energy is through traditional energy companies. All these wind, solar, and nuclear companies may be great investments some day, but there doesn't exist a world in which alternative energy does well and traditional energy does not do well. That's a tricky concept, so I'll repeat it a different way: a wind energy company is only a good investment if the price of coal or crude oil gets very high. Should that happen, then a coal miner or traditional oil & gas company has also been a very good investment. I think that traditional energy is a lower risk way to play alternative energy.
But when it comes to alternative energy, Uranium is clearly the way to go. The margins are much better than wind or solar, and it's a much more practical way to generate electricity (on a cost-per-megawatt basis). I know Greenpeace still hates nuclear, but surely they have to understand that wind and solar can't come anywhere close to satisfying the world's energy needs, and certainly not at the price it would cost to do so. Nuclear energy is an interesting middle ground, a blend of practical efficiency and less environmental impact than coal or gas.
Odds are this kind of thing will probably be a pretty boring investment. There are a few risks -- both general economic risks and uranium-specific risks -- to consider, and make sure you consider them and size the trade appropriately. In aggregate, it boils down to an investment with:
- limited downside
- quantifiable and stable upside
- the chance for substantial appreciation if the cards fall a certain way
Most of the stocks in this sector are trading at relatively low levels, having been forsaken by investors for flashier opportunities. I don't think that's such a bad thing, though. I like out-of-favor investments where you buy a little bit and stash it away. I think the odds are high that the U.S. gets really excited about nuclear energy and Uranium again at some point in the coming decade. I haven't a clue when that could happen. But when it does these companies will get exciting again and the market will reward them with higher multiples.
We're still in the first inning of a brand new game for nuclear energy.
(The above article is by Jeffrey Dow Jones of Draco Capital Management. Blog: The Draconian)