Tuesday, August 26, 2014

Latitude All Set To Move Higher

Latitude is all set to move higher. The stock is now at its all time high. The chart shows a strong uptrend which is likely to continue.

For the 9 months ended 31.3.14, the EPS equal 47.66 sen. Thus, the average EPS for each quarter work out to be 15.88 sen (47.66 / 3)

EPS for the 3 Qtrs are  follows: 1Qtr = 15.02 sen; 2Qtr = 19.52 sen; 3Qtr = 13.12. Traditionally, the 4 Qtr is better than any of the previous quarters.

On a conservative estimate, I shall take the 4Qtr EPS to be 15.88 sen. Thus EPS for the full fiscal year ended 30.06.14 will come in at 63.54 sen. At the last traded price of RM3.65, the PE is at an undemanding low of 5.74.

Latitude has a very strong balance sheet with little borrowings. If the stock is traded at a PE of 7.5, the price would be RM4.76!!!

My recommendation: Hold on to your shares or buy more at the present price.

You listen to me at your own risk.

Sunday, August 24, 2014

A Gambler Can Be An Investor

The beauty of the stock market is that you can either trade or invest. To make money by trading is much harder than to make money by investing. I wouldn't say you can't make money by trading. Actually you can, but you have to learn the skill first. So, unless you have the skill, do not trade.
To trade means to buy and sell shares with the intention and hope to make a profit within a few days to a few weeks. 
Most of these traders generally do not make any research themselves. They buy and sell based on tips from friends, remisers and analyst recommendations in the media.
They are usually small players with small amount of capital. Most of them lose money. They lose money because they lack the necessary skill to trade intelligently. Their transaction cost is high because they can't get special rates. Their cost of fund is probably high as well because they probably play on margins and a bank loan. 
With time constraint, high cost of transaction, high cost of fund, and a lack of knowledge, is there any wonder that the odds of winning are heavily against them? 
When you place a bet with the odds against you, you are  gambling. For example, when you go to bet in a casino, you are a gambler because the odds are against you. 
Can a gambler be an investor? Yes, a gambler can be an investor.
Peter Lynch, a well-know and successful investor, puts it this way. He said, " A gamble is an investment if you can tilt the odds to favor you." So in this context, a professional trader or gambler can be called an investor. Whether you agree with him or not is up to you to decide. 
A common mistake of traders, is that they take small profits and suffer big losses. When they have a winning stock, they sell when they have a small profit, but when they have a  losing stock, they will hold until there is a big loss before selling. This is what we call, "Eating like a chicken, and pooping like an elephant."
You can't win without skill. So if you wish to trade, learn the skill first. If you know a winning trader, get close to him, and learn from him. If you know of none, then you have to self-taught and learn from experience. 
Our present bull market is now well into its 6th year. It stared at the end of the bear market in March 2009. 
If you can't make money in a bull market, obviously something is wrong with you. You need to revise your way of play completely to turn around.  
You can't expect a different result if you have been doing the same thing again and again. You need to change; you need to find a better way to play the market. Otherwise, when the bears finally take over, your chance to make money is zero, and you are likely to suffer substantial losses.
Your need a license to drive, but you don't need any license to play in the market. Do you know why? 
Simply because, your mistake in the stock market is somebody's gain. So, the more inexperience or unskillful you are, the more welcome you are.
Think well before you speculate in the stock market. Do not borrow money; speculate only what you can comfortably lose. 
Better still, don't speculate at all. Just invest, invest and invest. 

Friday, August 15, 2014

3 Signs of a Market Top

When euphoria is gripping the markets it can be hard to stand back from the frenzy and see that things may be heading for a reversal. This is why vigilant investors must dismiss emotions and remain focused on what the market is saying. A rising market will eventually correct and there are often early warning signs before the fall occurs. An investor who is aware of these signs can take profits in a rising market and then be on the sidelines for the correction, waiting patiently for prices to rise again. 

Can We Predict Market Tops?
Markets are dynamic and as such, the chance of picking an exact top (or bottom) is unlikely and also not required in order to profit from the markets. Capturing the bulk of atrending move will provide substantial reward; therefore, there's no need to try to squeeze out every penny. Such attempts will likely result in the trader hanging on for too long, and then giving up profits when panic selling kicks in. 

If you wish to read the full article, click here.

Wednesday, August 06, 2014

SEAL it with a kiss

Seal Incorporated Berhad (SEAL) is Malaysia-based companies engaged in property investment, building contractors, project managers for property development, trading of goods and extraction and sale of timber.

Financial quarter ended 31.03.14 shows a huge improvement over the preceding quarter and the corresponding quarter of the previous year. EPS of 24.84 sen for the quarter is unprecedented. Some key statistics of the company are as follows:

Paid-up capital: RM88.56m
Par value: 40 sen
Current assets: RM295.66m
Current Liabilities: RM88.16
Current ratio: 3.35
Borrowings: RM1.101m
Cash in hand and in banks: RM113.63m (This amount is part of the current assets)
NTA: RM1.16 per share

From the above figures, it is easily seen that the company is cash-flushed and solvent. 

The management expects continued improvement in the group's  performance in the remaining quarter. 

At the last traded price of RM1.37, I rate this stock a buy. 

The above chart shows that the stock is in correction mode. For those who have idle money, they can buy now. For short-term players, they should wait until the chat turns positive,

As usual, YOU BUY AT YOUR OWN RISK. Please do not make any comments. I don't read them.

Tuesday, August 05, 2014

Bullshit may propel you to the top, but it will not keep you up there

There was a wild cock that was trying to fly up to a high branch of a tree. It tried and tried, but it was not successful. 

A bull nearby saw what the cock was trying to so. 
The bull said to the cock, "hi! cock, since you do not have enough energy to fly high, I suggest you take some of my shit. My shit is full of energy. It is sure to help you to fly high." 

The cock agreed to the proposal, where upon, the bull pooped out some shit on the ground which the Cock devoured. After eating the shit, the cock felt itself steaming with energy. With one leap and flipping its wings, it flied to the highest branch of the tree. It was very proud of its achievement and gave out a loud crow. 

The crowing attracted a hunter who was nearby. The hunter quickly took aim of the cock. With one shot, he was right on target. He shot the cock down. 

Next time, when you are about to bullshit, remember this: bullshit may propel you to the top, but it will not keep you up there.