Monday, August 26, 2013

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?

Saturday, August 24, 2013

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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Monday, August 19, 2013

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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Tuesday, August 13, 2013

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.

Tuesday, August 06, 2013

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.

Saturday, August 03, 2013

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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