One For 2014 Buy Hold and Monitor

Palm oil is the cheapest edible oil among other edible oils like Sunflower, Rapeseed and Soya oil. This is because on the same acreage of land, the production of palm oil is several times more than that of the other oils and not because it is inferior to them in anyway. 

People all over the world consume palm oil daily. Much of the usage is in the food industry. Being a versatile oil, it is also used as biodiesel and the manufacturing of products like soap, detergent, shower cream, shampoo, candles, nylon strings, vitamins, and other cosmetic and pharmaceutical products. 

Oil palm biomass is also useful. It can be turned into biofuel, fiberboard, pulp and paper, and fertilizer. 

Demand for palm oil is envisaged to grow in tandem with the world's population growth. This coupled with innovation for palm oil has resulted in the crop having an excellent future. 

All oil palm plantations (except the very small ones) have one thing in common. They all need palm oil mills. These mills are necessary to extract palm oil from fresh fruit bunches (FFB). 

One company that has the expertise and experience to supply, install, build and maintain these mills is listed in Bursa. In fact it is the only listed company in Bursa that has this technology. 

Not all palm oil mills are the same. Modipalm Engineering Sdn Bhd (MESB) working in close cooperation with Malaysian Palm Oil Board (MPOB) has devised a system known as the Continuous Sterilization System to extract oil from FFB efficiently. This is the latest new technology that is much favored by oil palm plantations. 

The main advantages of this system is higher oil extraction and lower labor cost when compared to the conventional type of palm oil mills. To date, MESB has built some 80 such mills. 

MESB is not a listed company, but its parent company, CBIP is. In September 2013, CBIP announced that MESB has been awarded by PT Rafi K.A., a subsidy of TDM Berhad to construct  a 60 tones per hour Continuous Sterilization Palm Oil Mill (CSPOM) and to deliver 3 units of Double Deck Continuous Sterlization System at a total cost of RM53,304,400.

In October 2013, MESB made another announcement which said that PT Windu N.A. of Indonesia had awarded letters of award to it to construct a 60 tones per hour CSPOM at the cost of RM33,001,088. 

The management of CBIP says that these contracts will contribute positively to earnings for the financial years 2013, 2014 and 2015.

While these contracts are not really that big, it does show one thing. It shows that Modipalm Continuous Sterilization System is efficient and competent and in demand. This augurs an excellent future stream of profits for CBIP.

In plantation, CBIP has 70,088 hectares of land. Most of these lands are in Indonesia. Presently only 10,426 hectares are planted. 

Other businesses of CBIP are: Special Purpose Vehicles and Steam Energy.

Fundamentally speaking, CBIP has a strong balance sheet and pays regular dividends. At the present price of RM3.20 plus, this stock is good to buy, hold and monitor. I am long on stock and intend to accumulate more.

As usual, you listen to me at your own risk. 

To all my readers, I wish them, Good Luck, Good Profits, Merry Christmas and Happy New Year. 

Goldis Post Higher Profits

KUALA LUMPUR, Dec 10 (Bernama) -- Goldis Bhd's pre-tax profit for the third quarter ended Oct 31, 2013 surged to RM37.51 million from RM9.87 million in the same period last year.

Revenue rose to RM32.89 million from RM23.12 million in the same period last year, the company said in a filing to Bursa Malaysia Tuesday.

"The higher result was due to higher contributions from the property investment and development segment," the company added.

Goldis is an investment company with private equity investments in Malaysia and China. It focuses on life sciences, water and waste water treatment, information and communications technology and organic aquaculture.

-- BERNAMA

Thong Guan Good For Long Term

Thong Guan was founded by the late Ang Thong Guan with a mere Capital of $50.

Established in 1942 as a tea merchant under the 888 brand name and also in the business of  packaging, the company has grown well over the years. Its base is in Kedah where it has 30 acres of factory land.

Today the company is one Asia Pacific's largest plastic packaging companies. Its main products are : cast pallet stretch film and garbage bags. To a small extent, it is also a trader in tea, coffee and biscuits. 

In the latest quarter ended 30.9.13, the company reported EPS of 10.51 sen. This is a big jump from the previous quarter of 5.05 sen. 

In the corresponding period of 2012, its EPS was only 5.65 sen. The management attributed this improvement in profits to better margins and higher demand for its products. Appended below is an extract from its filing with Bursa regarding its prospects going forward:

Current year prospect

The Group's stretch film division which was boosted by the full production of two new European cast stretch film lines last year has seen the increase in production volume, margin has also improved especially in the third quarter due to the group's efforts to focus on more value added products.

The PVC food wrap division had seen continuous improvements in profitability since the full operations of the second line last year. The group is expanding its operations further with the installation of 2 new lines which is expected to be commission in the first quarter of 2014.

The Group's new subsidiary company, TGSH Plastic Industries Sdn Bhd has continued to improve on its bottom line with its more aggressive pricing strategy and contributions from newly installed machineries. Its operations will be further expanded as well. Its garbage bag divisions in both Malaysia and China has continued to be profitable while the industrial bags division in Malaysia has witnessed marked improvements in the third quarter. There are plans to further expand the operation of this division.

The Group's compounding division which was expanded last year has continued to be consistent, contributor to profitability. New machineries will be installed before the year end and early next year to further increase its production output. The Group's operations in Sabah has also been profitable as well.

The food, beverage and other consumable business unit has continued to grow and is expected to continue its steady progress despite suffering a drop in profitability this year. The Group is confident of the continuous progressive contributions from its business units and has chartered further growth prospects.

The stock was lasted at RM1.80 per share. It has a solid balance sheet with little borrowings. The dividend for last year was 7 sen. I expect this dividend to be improved to 9 sen for fiscal year 2013. This will give a dividend yield of 5 sen if you buy it at RM1.80 per share.

For those who wish to buy and hold, this stock merits consideration.

As usual, you buy at your own risk.

What You Need to Know To Invest Successfully in the Stock Market.

Business is all about profits.

Investing in the stock market is most intelligent when it is most businesslike. This is advocated by Benjamin Graham, the father of value investing.   

Business is all about profits. Therefore, earnings are the first thing you look at when you analyze a company. When you look at earnings, look at earnings per share (EPS) instead of the total amount. 

When I look at earnings, two things come to my mind. One is whether these earnings are sustainable, and two, whether they will have further growth. 

Whether these earnings are sustainable or not, depend to a great extend on the core business of the company, the integrity of the management and the competency of the CEO. If you are not convinced that earnings are sustainable and growing, avoid the stock. 

Dividend Policy

A company should always take care of its minority shareholders. It should have a good dividend policy. Paying 30 to 50% of its earnings as dividends is to me a good dividend policy. The value of a stock depends on the amount of dividend it pays. 

Major Shareholders

A strong major shareholder is very useful. It gives added advantages and protection to a company. 

Barrier of Entry

Two companies that have the strongest barrier of entry are: Genting and Bursa. Why? Because even if you have money, you cannot go into this type of business, simply because you can't get a license for it. 

Banks also have a strong barrier of entry because bank licenses are limited. Plantations, construction and Properties do not have such a strong barrier. This means that if you have money you can easily go into such businesses. A strong barrier of entry prevents competition from becoming too intense and is therefore valuable.

Borrowings

Heavy borrowings can cause bankruptcy. In fact all companies that go bust have heavy debts which they cannot repay. So avoid companies with high debts.

The Balance Sheet

The balance sheet shows you what the company has and what it owes others. You have to study this carefully. I like to look at the current assets, and compare them to its current liabilities. The bigger the current ratio is the better. A current ratio of less than one is a red flag. 

The rest of this article is posted in my Facebook. If you wish to read it, just send me a "Friend Request."  If you don't have a Facebook a/c, open one. It's easy. 

Verdezyne to propel our palm oil industry to a greater height

Verdezyne is an US-based company. It has the technology to produce a variety of bio-based chemicals used in nylons and plastics. The company has been awarded BioNexus Status by the Malaysian Government. It is going to set up its base in Malaysia soon. Already the company is in talk with many plantation companies to bring about downstream activities in the palm oil industry. 

Click here to understand more.

Every Dark Cloud Has a Silver Lining

The revised RPGT is sure to dampen speculation in the property market. While this is good for home-occupier buyers and genuine investors, the same cannot be said for speculators. 

 Property prices have been going up and up since 2008 because of speculative demand. I bought a fully furnished corner lot in Aseana Puteri Condo at Bandar Puteri for RM380,000 in 2010. This unit can easily fetch RM650,000 presently. In 2006, this unit could be booked for RM280,000. 

The RPGT is now revised as follows:

 1. A property sold within 3 years after acquiring it, the gained tax is 30%

2.  A property sold within 4 years after acquiring it, the gained tax is 20% 

3.  A property sold within 5 years after acquiring it, the gained tax is 15% 

4.  Beyond 5 years, there is no gain tax for individuals, but for corporates, there is a

     gained tax of 5%.

Looking at the above taxes, it is hard to believe that speculation in the property sectors will not be dampened. One has also to factor in the transaction costs such as legal fees, stamp fees and brokerages. 

Once speculation is curtailed, demand will slow down. This will stabilize prices. 

It may even cause prices to drop substantially. 

What is of concern is that when demand slows down, developers will scald down their operations. This will hurt their bottom line. Companies involved in building materials will also be affected. 

For those companies that have good lands in fast-growth area like the Iskandar region, what they should do is to switch to high-end buildings that sell above RM1 million because foreigners are only allowed to buy properties priced above RM1 million. I think it is good for the country if more foreigners buy our properties as this simply mean an influx of foreign funds and foreigners who are financially sound.

Security means everything to every everybody. It is heartening to see that the government is cognizant of this fact, and have taken steps to beef up our military force and the police. When a country is not safe, not only tourism will be greatly affected, overall business will be affected as well. 

Every dark cloud has a silver lining. When speculators in the property market find it hard to make a fast buck, they may turn their attention to the stock market. Is this the silver lining? Let's wait and see what happens.

GST Vs SST

Even before budget 2014 is read out, one of the most talked-about subject is the GST. What exactly is GST? Well, it simply stands for Goods and Services Tax. Is the GST good or bad for you? This depends on who you are and your life style. As for the government, it will rake in RM20 billion more each year once it is implemented. So, definitely it is good for the government. It will also be good for the people provided the money collected is used wisely and with integrity.

Indonesia introduced GST in 1985, Thailand in 1992, and Singapore in 1994. For Malaysia it is announced to be in April 2015. So, we are the laggard in this respect.

Do not be overly concerned with the GST as some may actually benefit from it. Accordingly to Tan Sri Dr Fong Chan Onn, the GST will replace the SST (Sales and Services Tax). Presently, the sales tax is 10% and the services tax is 6%. This means that when the GST comes in,  the SST will be replaced and no longer applicable.

The purpose of the GST is to cast the tax net wider so that more people will pay taxes. Presently only about 1.7 million people pay income tax out of a population of 29 million. 

Most welcome about the GST is that some 40 basic food necessities such as rice, flour, sugar, milk powder, edible oil, wheat and oat are to be listed as zero tax items. Essential services such as healthcare may also be classified as tax-exempted.

If you wish to benefit from the GST, one way is to dine out less, and prepared your own food more often. Other ways include buying only what you need and avoid wastage. 

Cypark More Upside On The Card

This daily chart of Cypark shows the trend of the stock after this morning session. Even for the half day, volume has exceeded the volume of the previous full day. This is clearly an indication that demand for the stock has come in. It closed at RM2.21, up 4 sen. I think there is more upside for the stock.

Cypark Resources Berhad (CRB) is an integrated environmental engineering and technology provider.

Transforming dump sites, an environmental bane to an economic and environmental boon is the raison d’etre of our business. To read more, click here.

Budget 2014 A Boost to the Market?

Uppermost in everybody's mind must be Budget 2014. Najib has to put in place a people-friendly budget if he wants to have a good chance to win back the electorates. Cutting spending is not a good choice as many businesses will be affected. Increasing taxes to mitigate our debts is also not advisable as this is considered to be not people friendly.

We all know that our nation is in great debt because of corruption & cronyism. Once these are addressed, our problems are solved. Things such as a screw driver costs RM250 when it should be RM2.50 or a contract that can be done at RM10 million, but costs the government Rm100 million be must stopped.

I am sure Najib knows where our problems are. But has he really the capability to curb corruption? Let's wait and see.

My opinion is that this budget will emphasize on developments, curtail wastages, and restore credibility in the government.  

I believe that immediately after the budget, the stock market will turn bullish. This is my opinion.  I may be wrong but I have a good chance to be right. 

PKR Demand Improves

PKR completed minor round bottom with higher volume than those of the last few days. MACD has turned positive with its golden cross. The stock is likely to go higher.

BURSA UPGRADED TO RM10.10

The above daily chart of BURSA shows that the stock is in a gradual uptrend since hitting a low of RM6.90 and closing at RM7.05 with a doji on August 28, 13. It then went up to a high of RM7.65 before a minor correction brought it down RM7.40. Since then the stock has been trending up. The overhead resistance is at RM8.10. This is a important level. Once this level is decisively breached, the stock will trend higher.

HDBS Vickers Research analysts have upgraded the stock from "fully valued" to a buy with a target price at RM10.10. They predicted that Budget 2014 is likely to benefit BURSA in some ways.

Magni All Set For Higher Ground

Magni has a strong balance sheet with zero borrowings. Going by the chart, the stock is likely to trend higher.

The importance of trends & volume

Volume is an important indicator in a chart. Many people look at the price without paying any attention to the volume. This is a grave error.

A chart without volume is close to being useless. Volume signifies interest. Thus, the more volume transacted the more interest and more people being involved. This is a logical assumption. 

Buyers want to buy as low as possible while sellers want to sell as high as possible.

Sometimes there is wide spread between the two. 

When a buyer is  eager to buy, but finds that sellers are not willing to sell at a certain price, he will bid at a higher price.

The higher price will entice the sellers and some will sell. If the buyer wants to buy more but sellers have dried up, he will bid a little higher again. This process will continue until his wants are satisfied. This is how we can have an uptrend.

On the other side of the coin, a seller with a large stock wants to liquidate his position, but finds that his order has no buyers. So he lowers his price. The lower price will bring in some buyers. The price will keep on coming down as long as he is more eager to sell than the buyers are eager to buy. So here is how we have a downtrend.

When you want to buy a stock and find that the stock is in a downtrend, don't be impatient. Wait and watch closely. Wait until the downtrend has abated. When a downtrend has abated, it does not mean that an uptrend has begun. The stock can go into a side trend that may continue for a long time before a new trend develops. This new trend can either be up or down. You only buy when the new trend is up. If you have studied Japanese Candlestick, this will help you immensely to determine whether the trend has reversed.

So, when is it a good time to enter a trade? Here are some recommendations:

1. Buy at major support. (A major support is an important historic low.)

2. Buy at the beginning of an uptrend after a prolonged downtrend.

3. Buy when the stock is very much undervalued. Benjamin Graham said, "Buy dollar notes for 50 sen a piece."

4. Buy in a panic sale and sell in a panic buy.

5. The doji is an important candle. If you see one after a long downtrend, it the time to buy, and if you see one at the top after a long uptrend, it the time to sell. If you have no idea what a doji is, find it out at Investopedia.com.

Good luck, and Happy Trading.

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Inari turns bullish

After a very small correction, Inari turns bullish. It looks like a good time now to buy the stock. The market is always uncertain. We just have to change with the circumstances. I bought at RM1.16 this morning. You listen to me at your own risk.

Inari likely to drift lower

The above daily chart of Inari does not look good. The stock was rising well until Khazanah said
that it was not taking any stake in the company. If you are thinking of buying the stock, I think you should wait for the price to drop until you see a buy signal.

Support is at 98.5 sen, and then at 92.5 sen. This is from the technical point of view.

You listen to me at your own risk.

SPACs High Risk, High Reward

Is it advisable to invest in SPACs? SPACs stands for Special-Purpose Acquisition Companies. These companies are actually shell companies with nothing to show. They don't have any track record, any brand name or any asset. 

Basically, SPACs are meant to promote private equity investments, spur corporate transformation, and encourage merger & acquisitions.

 When you invest in SPACs, it means that you are handling over your money to a team of supposed-to-be professionals who will look for good assets to buy and invest. Obviously, what is most important here is the integrity and competency of the team. 

Competency without integrity is worse than integrity without competency. I wouldn't invest in a company that is either the one or the other. The worst is, when there is neither competency or integrity. Therefore, if you are about to invest in SPACs, you must, firstly, make a study of the management team. When you are convinced that the team is skillful and honest, then and only then, you hand over the team your money. Otherwise it is better to avoid them.

One more thing, don't forget that while the team is looking for qualified assets to buy, the company has to pay the team members their salaries. This means outflow of cash without any inflow. 

In America, there are more failures than successes as far as SPACs are concerned.

Presently we have three SPACs listed in Bursa. They are Hisbicus, Cliq, and Sona. More shall be coming. 

If you are risk-adversed, SPACs are not for you. 

Whatever action you take as a result of reading this article is your absolutely responsibility. 

When a bullish article is not to be taken at face value

The moment you read a bullish article about a certain stock,  do not rush in to buy. Not all bullish articles are meant for you to make money. Many are meant to benefit only a limited number of people. You know what I mean?

Bear in mind that big boys are very powerful. They are capable of manipulating the price;  they are also capable of manipulating the news.

If you don't want to be taken for a ride, you have to be careful; you must not act in haste. Many mistakes are made because of haste.

Check the latest quarterly report; check the balance sheet; check the income statement as well as the cash-flow statement. If you see some red flags that are not highlighted in the report, then that report must be read with skepticism.

Never buy a stock without having a good look at its chart. Never buy in a downtrend, and never ever go against the market. It is much stronger than you. 

If you don't listen to me, I can't help you.

A Glimpse of Heaven on Earth

The Kechara Forest Retreat will be a place like no other, nestled in the deep mountains of Chamang, Bentong, about 1 1/2 hours drive from Kuala Lumpur. This village is being created within the green tropical forest…

The Kechara Forest Retreat welcomes people from all walks of life to visit and practice. Away from the hustle and bustle of the city, it will feature various facilities and buildings designed to serve those who visit…

Click here to read more.

Founders of StemLife exit company

Corporate | SEPTEMBER 11, 2013 by Jose Barrock

Singapore listed Cordlife Group Ltd surfaced as a substantial shareholder in StemLife, buying 49.3 million shares or a 19.9% stake in the publicly traded Malaysian stem cell therapy and life- sciences company.

Interestingly enough the announcements to the local bourse indicates that the sellers are the founders off StemLife Sharon Low Su-Shing and Christina Lim Oi Wah.

According to the company’s latest annual report for FY2012 Low has 11.2% in StemLife, while Lim has 11.19% equity interest in the company.

It is not known how much Cordlife Group paid for the controlling block of StemLife, as the only detail offered was that the deal was done on September 3.

However the market seems to be positive on the entry of Cordlife. StemLife was up five sen to 37.5 sen at 3.50pm giving the company a market capitalisation of about RM92.8 million.

It is n not clear if Low the managing director and Lim the executive director will step down after selling out of the company.

Christina Lim Oi Wah (left) and Sharon Low Su-Shing

Perhaps the writing was already on the wall. In end May this year Low took 12-month sabbatical leave, leaving Lim in charge of the company. This was quite a surprise as Low has been the face of the company since its floatation exercise in October 2006.

It is also noteworthy that StemLife has billionaire businessman Vincent Tan Chee Yioun as a 12.12% shareholder in the company. Other substantial shareholders include Capital Group International Inc with 8.9% and Emerging Markets Growth Fund controlling 5% equity interest in Stemlife.

For its six months ended June this year, StemLife posted a net profit of RM1.5 million from RM8.5 million in revenue. Earnings per share for the six months was 0.62 sen.

StemLife also has a 40% stake in ThaiStemLife Co Ltd.

As for Cordlife Group, Bloomberg has the company focusing on cord blood banking services, including the collection, processing, testing preservation and storage of umbilical cord blood at birth.

A check on Cordlife’s annual report for FY2012 however reveals that as at mid-September last year, Cordlife Group Ltd’s largest shareholder was China Stem Cells (East) Co Ltd with 10.47%. Other substantial shareholders included City Challenge Global Ltd controlling with 9.4%, Coop International Ltd with 8.8% and Wells Spring Pte Ltd with 7.22%

For FY2012, Cordlife posted net profits of S$6.9 million from US$28.8 million in revenue.

Cordlife has a market capitalisation in excess of S$300 million.

MNRB First and Final Dividend of 32% less tax

OTHERS Proposed First and Final Dividend

MNRB HOLDINGS BERHAD

Type	Announcement
Subject	OTHERS
Description	Proposed First and Final Dividend
We are pleased to announce that the Board of Directors of MNRB Holdings Berhad had agreed to recommend the payment of First and Final Dividend of 32% less 25% income tax for the financial year ended 31 March 2013 to be paid on a date to be announced later, subject to approval by shareholders at the forthcoming 40th Annual General Meeting of the Company The above announcement was on 27 June 2013. But todate, no dividend has  been declared. Hopefully, it will do so later.

More about CSL

"China Stationery has always stressed on quality and integrity. We have so far
never strayed from these fundamental principles and goals which have served us
well in the past and which will continue to guide us in the future. We will continue
to work hard to please our customers and ourshareholders." (Excerpt from the speech by the CEO & Chairman)
Click here to read more.
I especially like the last statement: We will continue to work hard to please our customers and our share holders.
The stock price of CSL now stands at 24.5 sen. As shareholders of the stock, are you happy about this?

Dragons or Earth Worms (China-Based Stocks)

When Bursa opened its door to China-based companies for listing, it was expecting for Chinese dragons, but instead it was getting only earth worms. The above screen shows all the China-based companies listed at Bursa. A close look at the screen shows that all the stocks are trading at ridiculously low PEs. Said to be the best stock in the group, Xinguan is trading at PE of 2.32, and a fundamentally sound stock, CSL is trading at PE of 1.34! Today I shall talk about CSL. If you are interested, please read on.

CSL is an integrated plastic stationery company. Its products are sold under its own brands of

Sakura, Nachi and Foldersys.

CSL's IPO price was 95 sen per share. The stock was listed on 24-2.2012. The chart shows that it hit a high of RM1.80 before sliding downhill all the way to the last traded price of 24.5 sen.

What is most interesting about this stock is that is CEO, Chan Fung has been dumbing it as early as 16 Jan 2013. On that day he sold 61,413,500 shares at 90 sen a share. This left him with a balance 831,586,500 shares. His other disposals were as follows:

18.1.13: Disposed 38,586,500 shares at 90 sen per share

21.3.13 Disposed 50,000,000 shares at 60 sen per share

03.5.13 Disposed 60,000,000 shares at 45 sen per share

12.7.13 Disposed 120,000,000 shares at 30 sen per share

25.7.13 Disposed 20,000,000 shares at 30 sen per share

15.8.13 Disposed 160,000,000 shares at 30 sen per share

At this rate of disposals by the CEO, is there any wonder that the stock has dived to such a low level of 24.5 sen? What's ridiculous is that the CEO & Chairman of CSL, Chan Fung, attributed the poor performance of CSL to bad publicity associated to the S-Chips accounting fraud scandal in Singapore. (China-based companies listed in Singapore are known as S-Chips) He said investors should not paint with broad strokes and assume that all Chinese companies are the same. He likened CSL as the elusive thousand-mile horse, hidden among a herd of other, more ordinary horses. He said this and yet he has been disposing off his shares. This is incredible!!!

On paper, fundamentally, the stock is great. AS at 31.6.13 it has current assets of RM2,622,457,000 of which RM2,070,254,000 is in cash. Its current liabilities stand at RM242.86 million of which RM54.4 million is borrowing.

As at 31.12.12, some key statistics of the stock were as follows:

Shares Issued: 1,242,760,588

Par Value: S$0.001

EPS: 19 sen

Dividend Paid: 3.4 sen

NTA: 98 sen

Chan Fung has said that this was a financially sound company. Yes, indeed it is, at least on paper. Its earning for the last six months is reported as 9.64 sen per share. This is slightly lower than the EPS of 10.86 sen for the corresponding period of the previous year.

Before you buy into this stock at below 25 sen per share, please bear in mind that China-based stocks are infamous for creative accounting. A little bit of fancy financial footwork can make everything look rosy. And don't forget that as many as 493 Chinese companies listed on the NYSE have been de-listed, according to data by Shenying Wanguo and The Wall Street Journal.

Now, have a good look at the daily chart of CSL shown below. After a big long slide, the stock has been moving sideway for quite some time with a bias in favor of lowering prices.

Until you see a reversal in the trend, best to avoid it until then. But if you are risk-tolerant, and wish to have some excitement, now maybe a good time to buy CSL. Whatever you do, please remember that you are 100% responsible for your own action.

As usual, you buy, sell or hold at your own risk. Good Luck.

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How To Overcome A Premature Sale

While it's difficult to buy at the bottom, it is even more difficult to sell at the top. Many people make the mistake of selling prematurely. This means that before the stock moves up to its overvalued level or even to its fair-valued level, the stock is sold. How often have you heard your friends said, " After I sold out the stock shot up." 

This mistake of premature selling is made mostly by people who have no knowledge in technical analysis (TA), and have no knowledge about the fundamental aspects of the company behind the stock as well. 

Normally they buy on a tip or on rumors.  As soon as the stock rises and rises more, they are increasingly scared to lose back their gains. So their concern then, is to protect their profits. This make them sell the stock when it dips a little even in the early stages of an uptrend. Actually, they should be buying more at that time. When you are able to overcome  this weakness of selling too early, your profits will be greatly enhanced. 

The price of a stock never moves up in a straight line. It always moves up and down, and up and down. As it moves up, you will see higher highs and higher lows. But when it's in a downtrend, you will see lower highs and lower lows. You cannot see this unless you look at the chart of the stock.

In the stock market, you will do well to remember that it is profitable to follow strength, and never to buy in a downtrend. Thus the saying, " Never Catch a Falling Dagger."

To overcome the weakness of a premature sale, you must know TA, and have a good knowledge of the stock involved, otherwise you will never be able to hold on to it as the price rises.

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MNRB First & Final Dividend of 32%

MNRB will announce a first and final dividend of 32% for the financial year ended 31.3.2013, latest by end of this month. The stock gapped up with the opening price of RM3.58. It closed at RM3.73 for a gain of 18 sen. Volume transacted was above normal at 863, 500 shares. Going by the chart, the price is likely to improve further.
 AmanahRaya Trustee, the major shareholder of the stock has been selling the stock for quite some time. Despite this, the stock is moving up. Probably institutions are the buyers today. Hopefully, they will continue to buy more, going forward.

KSeng On Verge Of A Breakout

The above daily chart of KSeng shows that the stock is on the verge of a breakout. The overhead resistance is at RM5.34. Once this level is decisively breached, the stock should be on its way to a higher level. This stock is cash-rich and land-rich as well. Most of its lands are in the Iskandar region
where land value has improved immensely in recent years.
The indicators, MACD and Stochastic are in accord with their golden crosses. If the breakout is accompanied by high volume, it (the breakout) is likely to be genuine.

PRK Corp Displays Strong Uptrend

I highlighted PRK Corp on 19 May, 2013 in this blog. The price was then at RM2.02. Last Friday, the stock closed at RM3.13 after it hit a high of RM3.18. This means that the stock has gained RM1.11 in less than 3 months!

The company denied that the management  was in talk with any party for any merger or privatization when queried by Bursa. It is normal for the management to answer in this manner. 

In my opinion, a privatization of the stock is likely in view of the fact that the stock is very much undervalued even at today's price of RM3.13.

Its solid balance sheet showing plenty of cash in the bank, high net tangible assets and good earnings all point to the possibility of a privatization.

The above daily chart clearing displays that the stock is in an uptrend. Technical analysis says that when a trend is in motion, it (the trend) is likely to continue in the same direction. I subscribe to this notion.

How high will the stock go? I don't know. 

It's best to stay with the stock until, the chart shows a reversal of the trend.

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Crescendo Value for Premier Quality

Crescendo has a land bank of 2,975 acres, out of which 1665 acres are prime lands in the Iskandar Region. The company is in property development, manufacturing and trading in concrete products, and to a small extent in education. It is moving from medium to high-end products. This means better margins going forward.

As at Jan 31, 2013, its key statistics are as follows:

Paid-up capital: RM195.49 million

Par Value: RM1

NTA: RM 3.07 per share

EPS: 29 sen

Interim Dividend: 4 sen less tax

Final Dividend: 8 sen single tier (x-date 6.8.13; payment 30.8.13)

Current Ratio: 3.15

Quick Ratio: 2.09

Debt/Equity: 0.1558

Debt/Total Capital: 0.1312

Institutional shareholders: Public Mutual Bhd holds 7.44 million shares

Controlling shareholder: Kim Loong Bhd holds 55.73%

Chairman and CEO: Gooi Seong Lim 

From the above statistics, we can easily discern that the company has little debts and a strong balance sheet with good assets in lands.

For the financial year ending  Jan 31, 2014, the company has four on-going projects in the Iskandar region. These four projects are very well-positioned with a full spectrum of products for sale. These products are: medium industrial factories, commercial buildings, shop houses and residential houses. Demand for these products are good. Not only Singaporeans and other foreigners are keen to buy them, locals are keen to buy them as well. Thus, sale is not a problem.

In the past year, some sales were purposely held back for the purpose of better profits. This is reflected in better earnings of 9.23 sen per share for the first quarter ended April 30, 2013. In the corresponding quarter of the past year the EPS was only 6.59 sen.

Land values have always been on the rise. Some of the lands of the company were purchased way back in 2005. If a revaluation of these lands is carried out, the NTA value of the stock is sure to go up. In property counters, NTA (net tangible assets) is an important figure to consider.

Manufacturing and trading of concrete products contributed 34% of revenue. An improvement is expected with more sales to Singapore.

In Education, the campus for the Crescendo International College has been operational since May, 2013. Initial intake was reported as encouraging.

The group's future outlook is good. The 1665 acres of prime land, mentioned earlier, has a gross development value of RM7 billion according to the CEO. 

Recently the stock was traded to a high of RM3.80. It was last traded at RM3.12.

I am long on the stock. I expect it to surpass RM3.80 per share before 2014.

Your listen to me at your own risk, and buy at your own risk as well.

PRESBHD CREEPING UP

This daily chart of PRESBHD shows that the stock is moving up to challenge its immediate resistance at 2.12. Should the resistance level be decisively breached, the stock is likely to move up to a much higher level. EPF has been accumulating the stock. Buy at your own risk.

A Time to Remember

TimeCome started at RM3.49 when the market opened in the morning on Friday, 28.6.2013. It had a gradual uptrend,  and by 4.45 pm the stock was traded at  RM3.65.

 At 4.49 pm, the stock suddenly turned very active. On the sale side were selling of more than 30,000 lots,  and on the buy side were buying of about the same volume. The bid and offer price was at RM3.84. The sudden jump in the price from RM3.65 to RM3.84 was a great surprise to me. I quickly joined in the queue to sell. I keyed in at 4.49 pm to sell 100 lots,  4.50pm to sell 200 lots, and 4.51pm to sell 100 lots at RM3.84. 

When the market eventually closed, I managed to sell only 200 lots. I immediately called my remiser to enquire why the 200 lots I keyed in to sell at 4.50 pm were not sold. 

After some checking, I was told that because at 4.50 pm the computer was in the process of matching the orders, and so some entries to trade at that time were rejected. 

This taught me a valuable lesson. You should not key in at 4.50 pm to either buy or sell if you do want your orders to be rejected.

I was puzzled as to why the price jumped so much at 4.49 pm. Who was the buyer, and who were the sellers? The sellers were probably the small timers while the buyer was probably an institution that wanted to take a substantial take in the stock. 

Nowadays,  one must be extra vigilant at 4.45pm until the market closes on any trading day to make good use of any opportunity to make a fast buck.

Gold Is Unsafe at Any Price: Dicker /By Jeff Macke | Breakout

Another day another beating for gold. The yellow metal fell another 3.5% overnight bringing it to prices unseen for almost three years. The SPDR Gold Trust ETF (GLD) is now down over 25% year-to-date as retail investors find themselves on the wrong side of what is suddenly looking like one of the great boom-bust cycles in precious metal history.

As for what's driving the plummet, MercBloc president Dan Dicker says it's all about Main Street coming to the sudden realization that there is no safety whatsoever in gold. "When the retail customer gets frightened, they get frightened in a hurry and they get frightened for big numbers," Dicker says in the attached clip.

Retail investors are scared for good reasons. Gold is an investment that should have worked when the inflation which was supposed to run rampant due to currency devaluation kicked into high gear. As the inflation thesis gets debunked gold is getting mercilessly hammered. There just isn't a compelling fundamental reason to own gold and the chart is broken. The only thing left to do is hope and panic; usually in that order.

Dicker makes the point that the GLD, as a massive ETF, is forced to buy and sell physical gold holdings as the size of the fund fluctuates. When sellers start dumping the GLD it forces banks to go into the market and sell physical gold into a weak market. The result is what Dicker calls a "cyclical death spiral" that makes calling a bottom an exercise in futility.

Those looking to buy the dip in gold are fighting the trend, a tide of so called "weak-hand" sellers and a broken fundamental investment thesis. The market doesn't give out badges for bravery; hundreds of years of gold trading history suggests there are better places to put your money right now.

Is TDM on fire?

Some weird market activities happened in Bursa in the closing minutes of yesterday's trading. 

BKAWAN, TDM, CBIP, HSPLANT & COSTAL were all traded limits down in heavy volume immediately the clock hit 4.50 pm. On the plus side, we have JCY, up 24 sen, and Star, up 85 sen to

90 sen and RM3.71 respectively. 

TDM was the stock I was focusing on the whole day. It opened at RM4.09 and was traded up to a high of 4.18. In view of the weakness in Wall Street, I had sold some of my TDM shares at the average price of RM4.15 in the morning session.

At 4.45 pm, I saw big volume being quoted on the buy side and sale side at RM2.90. 

Initially, I thought someone was playing the fool with the bids and offer. Then at 4.50 pm, my computer screen blinked, and wow! more than 3 million shares were being done at RM2.90 per share. I couldn't believe what I saw. So I immediately called a remiser to find out what actually happened. I was told that the stock was indeed done at RM2.90 at the close of trading. He also told me that several stocks were also having the same unusual action.

I have no idea what had actually transpired. I think the following scenarios are more impossible than possible:

1. Someone hacked someone's account

2. Stock manipulation by traders

3. A malfunction of the computer

4. Key-in error by traders

5. Liquidation by foreign fund managers

6. Some planation lands in Indonesia are on fire

Bursa should do a through investigation into these unusual market activities and make its findings public.

What can we learn from what had happened? We learned that anything is possible in the stock market. This reminds me of the quote that if you want to achieve the impossible, you have to do the ridiculous. 

FBM KLCI to turn bearish

The DOW closed down 353.87 early this morning. This, coupled with the news that China is experiencing a slowdown will drive the FBM KLCI index down when the market opens. Support at 1742 is not likely to hold. It may come all the way down to 1720.

Three Strategies To Riches

You need a car license to drive. Why? Because your mistakes can be fatal to someone else. Therefore, before you are allowed to drive, you must prove that you are competent in driving, and know the traffic rules as well.

In the stock market, you don't need a license to trade or invest in shares. As long as you are of age, 18 and above, you can open an account with a broker firm and start  trading. You do not need any special education for this purpose. In fact, the more foolish and loaded (rich) you are, the more you are welcome, simply because, your mistakes are only fatal to yourself, and to no others. 

The market is a zero-sum game. For someone to win, some others must lose. That's why you are  most welcome if you are the most foolish and have plenty of money to lose. 

There are many ways to build up wealth. In the stock market, I know of three. They are:

1. Buy low, sell high, 2. Buy high, sell higher, & 3. Buy high and sell low.

The first two strategies are logical, but the 3rd one looks ridiculous. How can one buy high and sell low and still makes a profit? Here's the explanation:

At the end of a bear market, prices will be at very low level with little volume transacted daily. Prices are likely to be moving sideway in a tight range. This sideway movement can continue for months or even up to a year or two. It is during this period of lackadaisical trading that  savvy investors are accumulating shares. 

For those who wish to buy high and sell low, they stay awake and alert. They are waiting for an upside breakout. So as soon as one appears, they buy. This is: buy high. Assuming that after they have bought, the stock moves up, they will buy more to make more as soon as the uptrend starts. As the stock moves up higher, their concern is to take profit. For those who know technical analysis, the best time to take profit is to wait for a downside breakout to sell. This is what I mean to sell low.

I hope the above explanation is clear about the strategy, " Buy high and sell low."

Different times call for the use of different strategies. Your temperament and financial standings will decide which one of the three strategies suits you best. 

For me, I use all of them.

Smartag A Big Disappointment

Smartag is a big disappointment. Quarter after quarter, the company reported negative earnings. Investors of this stock are now cursing and wondering what is happening to the company. Last year, the company said that it had successfully tested its technology at Customs, and yet until today, the company is still running at a loss. 

The chart shows that the stock was traded to a low of 8.5 sen on April 30, May 2 & 3 this year before it was traded to a high of 20 sen on May 22. The stock then drifted down. It was well supported at 15.5 sen. 

On June 7, the stock opened at 14.5 sen, half a sen lower than the previous day's close. It was quickly pushed up to a high of 18.5 sen, and then heavy liquidation of the stock hammered unabated the stock down to 12.5 sen before closing off the day's low at 13 sen. To me, the stock was being manipulated and insiders are trading. What surprised me was that Bursa didn't queried the company of the unusual market activity on that day. 

The stock is now last traded at 10.5 sen with many red candles at its trail. If you wish to dabble in this stock, watch closely, the show is not over yet. Wait until you see a bullish signal before you buy.

Cypark All Set to Move Up

The gap shows eagerness to buy. Be ready for more upside.

ECS Correction Over

At ECS, the run-up is as fast as the run-down. Last traded at 1.17, the correction looks to be over. The stock was well supported at 1.16 as shown in the chart. I don't think the stock will fall below 1.12. So the downside is small. Now is a good time to buy into the stock. As usual, you buy at your own risk.

Multico All Set To Move Forward

Multico occupies a prominent position in my portfolio. The stock has been in a gradual uptrend  since June 7, 2012 when it was being traded at  1.14. 

Last Friday, June 7, 2013, the stock closed at 1.78. This means that the stock has moved up 56.14% within 1 year. This is commendable because the FBMKLCI moved up only 12.71% from 1575.3 to 1775.5. 

Going by the chart, the stock is now all set to move up higher. Watch it closely, come Monday morning; chase it at the opening bell. You will see the money within the next few days or even at the close of the day. 

Please remember that if you listen to me, you do so at your own risk absolutely.

Good luck and may God bless your every trade.

MHB Dead Cat Bounce?

The above chart of MHB (last trade at 3.41) looks dangerous. It is in the formation of a Dead Cat Bounce or a Bull Trap. The last two red candles portend further downtrend ahead. Be careful if you are playing this counter. It can go much lower. This is my prediction. Whatever you do, you do so at your own risk.

Beware of Red Flags

When you do a fundamental analysis of a company, always be on the lookout for Red Flags. Red flags are signals that signify trouble ahead. When you see a few Red Flags show in a company, that company is not good for investments. Some Red Flags to be awared of are as follows:-

01. Two consecutive quarterly reports of lower profits when compared to the corresponding periods of the previous year.

02. A rise in revenues that is not accompanied by a rise in profits.

03. Account Receivables go up but revenues remain the same or have become lower.

04. Current Ratio is less than 1.5, and Quick Ratio below 1.

05. Stock price trending down even though the main market is trending up.

06. Debt to equity ratio is greater than 0.5

07. Goodwill of more than 8% of capital

08. A cut in the dividend payment

09. Venturing overseas to go into business that the management is not familiar with

10. When the company is buying back it shares while insiders are selling.

Red Flags are important signals. If you choose to ignore them, you do so at your own peril.