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. 

PRK Corp

Perak Corporation Berhad is engaged in property and investment holding, real property development and provision of management services. The Company operates in three segments: Infrastructure engaged in maritime services in respect of the development of an integrated privatized project and encompassing operations of multipurpose port facilities, operation and maintenance of a bulk terminal, sales and rental of port related land and other ancillary activities; Township development, which is engaged in township development of real property and ancillary services, and Management services and others that provides provision of management services and other business segments, which include property investment and distribution. The Company's township developments include government offices, shop lot, bungalow, semi detached and other type houses. In October 2011, the Company disposed of its associate, West Coast Expressway Sdn Bhd.

For the financial year ended 30.12. 2012,  the key statistics of the company are as follows:

Paid capital: RM100 million

Par Value: RM1 per share

EPS: 38.10 sen

Reference Price RM2.02

PE:5.36

NTA: RM4.68 per share

Dividend Paid: 8.5 sen less tax and 1.1 sen tax free

Current Assets: RM511,455,796 of which RM184.95 million is in cash

Current Liabilities:RM135,427,648

Major Shareholder: Perbadanan Kemajuan Negeri Perak

Most of the earnings in 2012 came in the last two quarters. (3Q = 12.58 sen and 4Q = 15.93 sen)

The above figures show that the company is fundamentally strong and solid.

As at 31 December 2012, PRKCorp has sufficient credit in the 108 balance and balance in the tax exempt income account to pay dividends amounting to approximately RM19,642,000 (31.12.2011 : RM21,892,000) out of its retained earnings. The Company may distribute the balance of the retained earnings of approximately RM50,064,000 (31.12.2011 : RM43,069,000) as dividends under the single tier system.

Technically speaking, the stock is now in an uptrend and undergoing a small correction. 

I am long on the stock and intend to buy more.

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

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ECS Highlights of 2012

Expanded tablet PC range

– Appointed by ASUS to distribute the Google Nexus 7 tablet PC in Malaysia

– Now a major tablet PC distributor to the local market, with extensive product model portfolio from Apple, Samsung, Asus and Lenovo

Established new smartphone distribution channel

– Signed distribution agreement with China’s Huawei to distribute the Huawei Ascend P1 smartphone

Enhanced Enterprise Systems portfolio

– Appointed by Huawei to distribute its full range of enterprise systems products and solutions

Undertook 1-for-2 Bonus Issue

– Implemented on 31 October 2012

– Group’s share capital increased to 180 million shares of 50 sen each (from 120 million shares of 50 sen each previously)

Investment Merits (as at 30 Apr 2013)

Market leader in ICT distribution in Malaysia 

Domestic ICT market continues to be growth industry 

Cloud computing and mobility devices to be growth catalysts 

Net cash position allows for future expansion Dividend policy of 30% payout Single-digit PE valuation an affordable entry into ICT growth proxy

Source: ECS Annual Report

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TDM not in full bloom yet

TDM not in full bloom yet.

TDM eyes higher profit this year

2013/04/26 KEMAMAN: TDM Bhd (TDM) expects to record a higher profit this year, contributed by its healthcare segment and its oil palm plantation arm. Chairman Datuk Roslan Awang Chik said of its 40,000 ha landbank in Kalimantan, Indonesia, 11,000 ha of planted area is expected to mature next year, and TDM is building a RM80 million palm oil mill there. TDM expects its 30,000 ha oil palm plantation in Terengganu to also contribute to the profit. "We also expect profit to come from our four healthcare centres, which are operating here and in Kuantan and Kuala Lumpur," he told Bernama when met at the handing over of house keys to TDM staff at Kompleks TDMB in Padang Kubu here. Roslan said last year the company posted a profit for the third year in a row of RM149 million, compared to RM220.6 million in 2011 and RM197 million in 2010.-- Bernama

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Kenanga Upbeat with ECS

Kenanga upbeat with ECS

The casino always wins

When you go to a casino to gamble, you are more likely to lose than to win. More fortunes have been lost than won by people who frequent casinos. This is evidenced by the fact that casinos rake in billions of dollars year after year. Look and Genting as an example.

Do you know why casinos always win? Actually, the answer is quite simple. Casinos always win because you have to play the games accordingly to their rules. And you can be sure that the rules are always made in favor of the house. In other words, the odds are always against you. That's why you lose.

In the stock market, things are different. You don't have to trade or invest accordingly to anybody's rules except your own. Thus, it is imperative for you to set up your rules if you want to win.

My rules are as follows:

01. Insist on value when you buy.
This means you will only buy stocks that promise safety of principal and an adequate or at least a moderate return. The company behind the stock must have strong fundamentals and growth.

02. Never catch a falling dagger.
When a stock is in a downtrend, you must avoid it until the downtrend ends before you buy.

03. Always buy in an uptrend.
When a stock that you like is moving in a tight narrow side trend, keep a close watch on it. Buy in the upside breakout. If you miss that, then buy in the pullback.

04. Write down the reason as to why you buy a particular stock. If you don't have a good one, don't buy.

05. When you are ahead, don't allow fear to control you. A premature sale is a most common mistake. You can never become rich making pennies. Most people cut profit early and regret later. Don't be one of them.

06. Never buy liabilities.
A rubbish share is a liability. A stock with high debts and no earnings or dividend payouts are rubbish shares. These must be avoided.

Every one of us is different in character and financial standing. If the above rules are good for you, follow them. If you don't like them, choose your own.

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Hell has no fury like people scorned

Upper most, In the mind of everyone, is the GE13. Never in the history of Malaysia has the opposition a better chance than now to wrestle control of power from the ruling party. Not only the young and educated are firmly behind the opposition, the older generation and those who know how to use a computer, ipad or smartphone are in the same boat.

The wind of change has commenced. The spirit of righteousness is awaken. Like wild fire, it is spreading quickly far and wide; its intensity severe and demanding.

Ubah! ubah! ubah! Reformasi! reformasi! reformasi, these are being heard loud and clear. The people's power is in action now.

Hell has no fury like people scorned. Corruption, cronyism, crime and violence have angered the people. They are now bent on change, and change of the government is what they want.

By the May 6, 2013, we shall come to the end of the tunnel. Who's going to rule Malaysia from then? At the moment, it is still anybody's guess. The opposition appears to be the underdog, but its strength should not underestimated. It has a very good chance to surprise and surprise immensely.

What's going to happen to our stock market if PR wins? I believe that foreigners will like it because corruption will not longer be present, at least for the time being.

I would not be surprised if the market jumps some 20 points to create a new high immediately after the change of guards.

God bless Malaysia.

Pos Office Special Dividend Likely

HwangDBS Vickers Research in a report in December said Pos Malaysia has tax credits amounting to some RM317mil which is expiring by Dec 31, 2013, and is likely to declare a special dividend of 59 sen per share in the near future.

It said Pos Malaysia is a cash cow, supported by RM1.24 per share net cash or RM665mil by end-financial year 2014. Read more.

Quality of Earnings Matters

Earnings are important, but it's the quality of the earnings that counts.

When it comes to fundamental analysis, the most important item is earnings. Indeed earnings are the lifeblood of a company. Without earnings, a company cannot survive. When a company reports earnings that are above expectation, the price of the stock rises. And when it reports earnings that are below expectation, the stock price drops.

When we look at earnings, we should look at earnings per share (EPS) and not only at the amount. A company earning RM10 million with an issued capital of RM10 million comprising of 10 million shares issued at RM1 each is better than a company earning RM100 million but with a capital of RM500 million comprising 500 million shares of RM1 each. While the former's EPS is RM1, the latter's EPS is only 20 sen. Many people look only at the amount earned when they should be looking at the EPS.

Another feature often overlooked is the quality of the earnings. Earnings from sales and received in cash is the highest quality of earnings. Earnings placed under Accounts Receivable may not be fully realized, and therefore has a lower quality. Earnings from sale of assets, not repeatable, are the lowest form of earnings. So when you look at earnings, you must take into consideration the quality of the earnings.

Ideally, earnings should go up in tandem with sales of the company's products or services, year after year. Sometimes earnings improvement is the result of cost cutting. If the cost cutting comes from decreasing the labor force thus demanding more work from each worker, this is not so good even though competency is enhanced.

The best scenario is that the quality of its products is upgraded resulting in more sales and better margins.

Next time you look at EPS, don't forget to look at the quality of the earnings.

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ECS ICT EARNINGS TO IMPROVE

Malaysia’s leading ICT distributor ECS ICT Berhad and Samsung Malaysia Electronics (SME) have signed a business-to-business (B2B) distribution agreement that will see ECS distributing the global leading consumer electronics provider’s entire range of IT and mobility products to the enterprise market.

ECS and IBM Partner to Deliver SmartCloud Solutions

ECS inks deal with CA Technologies

Read about them here.

ICT products are part and parcel of life in our modern world. The importance of these products needs no explanation. One company that stands to benefit much from these products is ECS ICT Berhad which is a leading ICT distributor. The 3 activities mentioned above will go a long way to improve its revenue and earnings. At the last traded price of Rm1.16, there is plenty of value for your money.

Buy at your own risk.

TDM Bonus and Share Split

TDM has announced a bonus issue of 1 for 5, and a share-split of 5 for 1. This means that for every five shares you have, you get 1 share free. And after the share-split you will then have a total of 30 shares.

TDM closed at RM4.21 yesterday. It will be interesting to see how the investors react to announcement.

TDM first and final dividend of 22 sen tax free

TDM said that for the financial year ended 31.12.12, it would propose a first and final dividend of 22 sen tax free under the single-tier tax system. This is good news for all shareholders.

TDM Cheapest Among Plantation Stocks

Jewels Among The Rubble
In scouring for jewels in Malaysia’s plantations universe, TDM and Chin Teck stood out among the 10 cheapest plantation stocks in terms of EV per planted ha valuation. We think these stocks’ EV valuations should still be, but are not, higher than Indonesia’s. These stocks could re- rate on account of their severe under-valuation, even if the plantation sector stays unexciting.
Source: RHB The Research Team. Read more here.

Interest Seen In Faber

Faber opened at 1.57. It quickly breached its overhead resistance at 1.58, and went up to a high of 1.63 before pulling back to 1.59 for the close. This is a good entry point. Total volume traded amounted to 1,978,400 units which is high for this stock.

Buy at your own risk. Good luck.

ECS Heading To Cloud Nine

ECS is a leading ICT distributor. It is a small-cap stock with zero borrowings and plenty of cash in hand. The stock has all along been very quiet, but in the last few days, interest in the counter has picked up. This is clearly displayed in the above chart. Volume has also picked considerably.

The recent announcement that ECS is partnering IBM to provide cloud services, and an earlier announcement that the company has inked a deal with CA Technologies to distribute CA Technologies data management solutions are probably the reason that causes demand for the stock.

Going by the chart, the stock is likely to move up more.

Multico A Big Disappointment

Multico actually did well fundamentally as shown in my previous post. I had hope for a good performance today, but it did dismally. Although volume was high, the stock ended at 1.55 which is 5 sen below last Friday's close. The pattern of the chart has turned bearish with the formation of a Bearish Engulfing.

Is the stock price of Multico under manipulation? We have heard of "pump and dump." The exact opposite of this is "depress and collect."

Multico is a small-cap stock. Normally, only a small volume is traded in a trading day. Because of this, the stock can be easily pushed north or south as desired by the manipulators. Going by the chart, support should come in at 1.53, and if this is breached, the next support will be 1.46.

Multico, Time To Move Forward

THE TECHNOLOGY BEHIND THE WINNING POWER Multi-Code is synonymous with the highest standards of quality through utilizing state-of-the-art technology and extremely stringent quality control to ensure product excellence for its customers. The high quality of Multi-Code’s products meet the exacting standards demanded by the local and international markets.

Multi-Code’s relentless passion for quality has won acknowledgement and recognition when the company was awarded the ISO 9001-2000 and ISO/TS 16949:2002 accreditation for its Quality Management System from TUV Rheinland. Read more.

Multico reported 2Q13 earnings of 7.54 sen per share and revenue of 27.146 million. This compares well with the preceding year's corresponding period of EPS of 4.90 sen and revenue of 25.282 million. From this, we can easily note that its profit margin has improved. This is a good sign.

Another good sign is that its MD, Lim Ming Kee has on Feb 5, 2013 bought 64,500 shares for RM89,010.

In its latest filing with Bursa, the company said that it had won a contract of 74.1 million from PROTON for the supply of functional switches and anti-theft systems. This will enhance its future earnings.

The stock was last traded at 1.60 which is the previous high level. I believe this level will be crossed soon.

The company has declared a single-tier interim dividend of 3 sen which is the same as that for last year. Its NTA now stands at RM1.6267.

In respect of its lawsuit to recover some RM43 million from some of its former directors, the matter is still waiting for news from the court.

All in all, at RM1.60 per share, this stock is a good buy.

As usual, you buy at your own risk.

Control Your Emotion or Other People Will Control You

Many people are controlled by fear. Fear of losing an opportunity causes you to act in haste. Fear of losing your paper profit causes you to sell out too early. And fear of losing everything causes you to sell right at the bottom. Although selling right at the bottom is caused more by frustration than anything else, fear also plays a part. How do we overcome these kind of fears? Knowledge is the best weapon. When you know, people cannot scare, frighten or intimidate you. They can't con you in anyway. Knowledge is your first key to success.

Hope causes you to hold on to a falling stock. Sometimes your hope is rewarded; your stock turns around and you make a profit. Unfortunately, hope often becomes hopeless. Experience tells me that it is much better to keep an uptrend stock and let go a falling one. This strategy is vital, simply because a trend in motion is likely to continue. Hope also causes people to buy into excessively high PE stocks. I prefer what is good today and better tomorrow.

You often hear people say: "Don't be greedy." Actually greed is necessary if you want to make big money. How else can you get a ten-bagger if you are not greedy. But unsatisfied greed is bad. Bulls make money, bears make money but never a pig, so goes the saying. (A pig is someone who will not sell, not matter how high the price goes up.)

Everything has a fair price. When a stock is overpriced, your concern is to sell it at a good price. The best way I know, is to use a trailing stop-loss. If you have no idea what a trailing stop-loss is, you can check it up at Investopedia.com.

This device is to prevent you from selling out too early.

The Sure Way To Stock Market Success

Knowledge, wisdom, discipline and patience are what you must have to succeed in the stock market. Without knowledge, you can't compete. Without wisdom, you can't strategize. Without discipline, you can't implement, and without patience, you can't control your emotion. Never allow greed, hope and fear to control you.

To have a good knowledge means knowing what is happening around you locally and internationally.

What is happening in some countries, especially the big ones, like America, China, India, Brazil and the European countries can have a profound effect on small countries like Malaysia, Singapore, Indonesia, HongKong, Japan, and Taiwan, to name a few.

Of utmost importance is that you must know how to analyze an annual report of a company. Once you know this, you will be able to distinguish a good stock and that of a rotten one. A rotten stock is like a bad egg which will not hatch no matter how long you sit on it.

Wisdom is the excellent use of knowledge. Without wisdom, knowledge cannot be put to good use. For example, if you know that smoking, gambling and alcoholism are bad for you, but you continue to smoke, gamble and drink. This means you are not putting your knowledge to good use, and thus your knowledge is useless to you.

Having knowledge and knowing what to do are not good enough. You must have discipline to implement those actions needed to bring about success.

If you know that buying in a downtrend is stupid, but continue to catch the falling dagger, you have no discipline.

Impatience is the cause of many a loss. The market is designed to transfer money from the impatient to the patient. So you have to be patient. If you overpay, even for a great stock, it will be a long time before you see a good profit.

When it's not the time to buy, don't buy, otherwise you will soon say to your money, "bye, bye."

Investing in the stock market is a serious affair. Don't take it lightly. Success is sure to be yours if you have knowledge, wisdom, discipline and patience. Unless you are well prepared and well planned, success may just remain a dream.

Good luck and may God bless your every trade.

MNRB Spectacular Earnings Surprise

MNRB Holdings - Spectacular Earnings Surprise
Author: kiasutrader   |   Publish date: Fri, 1 Mar 10:10   |  >> Read article in Blog website


MNRB's  9MFY13  net  profit  at  RM97.1m  was  above  our expectations,  accounting  for 124% of our full FY13 earnings estimate. The 91.6% surge in profit was mainly due to lower  net  claims  ratio,  24.4%  higher  investment  income,  and  an  improvement  in
underwriting margins. We take the opportunity to upgrade our earnings estimates by as  much  as  50%  for  FY13/14  and  thus  upgrade  the  stock  to  a  BUY,  pegged  to  0.6x FY14  BV.  The  stock  is  a  laggard  amongst  reinsurers  in  the  region  which  trade  at closer to 1x BV with a 29% upside to our fair value.
Exceeded  expectations.  MNRB's  9MFY13  net  profit  at  RM97.1m  was  above  our expectations,  accounting  for 124%  of  our  full  year  earnings estimates.  During  3QFY2013, the  group  registered  a  net  profit  of  RM59.0m,  333%  higher  than  the previous year's corresponding period and higher q-o-q from 2Q's RM12.3m loss. The 9MFY13 profit surge of  91.6%  was  mainly  due  to:  i)  significantly  lower  net  claims  ratios  across  a  few  key business  segments,  ii)  24.4%  higher investment  income,  iii)  improvements  in  underwriting margins  as  well  as  increase  in  net  profit  margins  from  3.2%  to  5.6%.  This  was  however
offset  by:  i)  overall  moderate growth  of  8.4%  in  premiums/contributions,  and  ii)  higher  fee and commission expenses growth.
Source: OSK
Labels: MNRB

Comment
For fiscal year ended 31.3.12, a final dividend of 17% less tax was paid on 26.10.12. This is about 39% of its full-year earnings.

For fiscal year ended 31.3.13, dividend is expected to be not less than 25% less tax, assuming that the 4th quarter earning is the same or not less than 19.60 sen per share.

As at 31.12.12, the NTA of the stock was RM5.50 per share. The stock was last traded at RM2.89.

My concern about this stock is that there is no consistency in its earnings. This is perhaps the reason why the stock is being traded at such a big discount to its net tangible assets. Nonetheless, at RM2.89, the stock should eventually turn out to be an excellent buy.
As usual, you buy at your own risk.

Multico To Move Higher

Multico closed up 12sen from Thursday's close at 1.53 last Friday with 1537 lots traded which is above normal volume transacted daily. This is a bullish display. I believe the stock is on track to move higher. As shown in the chart, the resistance is at 1.60. This means that there will be a lot of sellers at 1.60. Whether this resistance will be breached or not remains to be seen. If the resistance is surpassed, then the stock is likely to move up further. Another 20 to 30 sen rise is most likely.

Multico is in the course of claiming back some RM41.77 million from some of its former directors. It is likely to be successful as the high court has ruled in favor of the company. This amount is a big sum to the company as its paid-up capital is only RM44.4047 million.

Multico was traded to as low as 10.5 sen in 2008. I became interested in the stock in 2011 when on Dec 28 of that year I bought 19000 shares at 76 sen per share. Since then I have been accumulating the stock every now and then. In fact I added another 13,000 shares at RM1.39 per share on 27 Feb 2013.

In the annual report for the year ended 31 July, 2012, I noted that Fong Siling (Cold Eye) has 1.2 million shares in the company. This give me added confidence as Mr Fong is well known as a savvy investor.

I believe Multico has a bright future, and I shall hold on to my stock.If you wish to join me on this profitable ride, you are welcome.

I am at Facebook. Anyone who wishes to befriend me there, please do so. Thanks.

Whether you buy, sell or hold as as result of this article, you do so at your own risk absolutely.

Multico More Upside On The Card

Multico moved up 4 sen in the morning session with 647 lots traded. The chart displays encouraging signals with the MACD and Stochastic hooking up. I expect the stock to have more upside from here.
Always buy at your own risk.

Gong Si Fa Chai, Happy New Year

Once again the New-Year Greetings are back in touch
To those we seldom write to, but think of much
It's time to send a greeting that's sincere and dear
Wishing them happiness, prosperity and good health
Throughout and beyond the new year.

Plan with Wisdom, stay with Wisdom, and money will come in at random.

To all my readers, I wish them good luck, good health and good profits for all their trades. "Enjoy, it's Happy New Year."

Change, Change, Change

God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.
Reinhold Niebuhr

Read more at http://www.brainyquote.com/quotes/topics/topic_change.html#ByEJFPCCO5tKqJO5.99
To improve is to change; to be perfect is to change often.
Winston Churchill


Read more at http://www.brainyquote.com/quotes/topics/topic_change.html#ByEJFPCCO5tKqJO5.99
A small group of thoughtful people could change the world. Indeed, it's the only thing that ever has.
Margaret Mead
Read more at http://www.brainyquote.com/quotes/topics/topic_change.html#hwmOBTGQfceOxBBw.99

Are We To Have a Chinese New Year Rally?

The above is a weekly chart of the FBM KLCI dated back to July 1, 2008. What is prominent in the chart is that a green candle will appear before an uptrend begins. This does not mean that when a green candle appears after a few red candles, the trend will begin. But it does mean that the trend will not commence without a green candle in place. A square is always a 4-sided figure, but not all 4-sided figures are squares. This is an analogy.

The chart shows 4 weekly red candles in the last 4 weeks. For the trend to reverse, a green weekly candle must appear first. So keep watching for this to happen. If you don't see any green candle in place, you have to assume that the downtrend will continue. This is likely as the stochastic is also trending down

Going by the chart, some support will come in at 1590, and if this is breached, the next likely support will be 1527.

So, are we going to have a Chinese New Year Rally? I don't think so. My opinion is that there will not be much fanfare until the GE13 is over. But if there is political chaos in the country over the GE13, and foreign funds pull out, the market will take a dive.

Good luck and Happy Trading. Always bet at your own risk.

The 10 Commandments

1. Thou shall not go against the trend.
If it be down, let it be down. The market is bigger and stronger than you.
Follow the market but be one step ahead of the crowd.

2. Thou shall not follow the herd instinct
Just because many people are buying a certain stock does not mean you should follow suit. If people want to buy rubbish stocks, that is their bad luck. Don't make it yours.

3. Thou shall treat the market as a business, not a casino
The stock market is not meant to be a casino and you should not be there to gamble.

4.Thou shall not buy high-debted and no-earnings stocks
All companies that folded are highly geared with negative earnings. Don't buy rubbish shares; don't buy somebody's liabilities.

5. Thou shall only buy solvent companies with good-growth prospects
Present earnings are important, but future earnings are more important. That's why we have companies selling at high PER (Price earnings ratios).

6. Thou shall not be overconfident
Overconfidence leads to overtrading. Once you overtrade, you may not be able to control your own emotion. Fear may set in when the market is not going the way you expect it. It may disrupt your plan, turning your profitable trade into a loss.

7. Thou shall invest within the comfort zone
Don't be too greedy; don't play with borrowed money. Debt is a disease. It can cause you a lot of problem if you are not careful.

8. Thou shall be patient
The market is designed to transfer money from the impatient to the patient. You must have very good reasons before you switch counters. Very often, the shares you sell move up faster than the shares you buy.

9. Thou shall be disciplined
Don't change your strategy at the eleventh hour. If you have placed a stop-loss in your chart, don't remove it unless it is replaced with a trailing stop-loss.

10. Thou shall be knowledgable
Investment in knowledge pays the best dividend. No one is so skillful that he cannot better his best. Keep learning for knowledge is boundless.

Happy investing.

The Importance Of The Trend

One of the most importance features in TA (Technical Analysis) is the trend. Before you buy or sell, you should have a look at the trend of the stock. How do you do that? The only way I know is to look at the chart. ( I wonder how people who do not believe in charts do it.)

With a chart it is easy for you to know the trend. When you see higher highs and higher lows, you have an uptrend. When you see lower highs and lower lows, you have a downtrend. Your can also have a sidetrend which means that prices are moving sideways in a narrow range.

Once you have determined the trend, you can then decide what action to take.
Buying in a downtrend should be avoided, especially when the downtrend is initially moving down after a long uptrend.

Similarly, selling in an uptrend should also be avoided, especially when the uptrend is just beginning to trend up after a long downtrend or a long sidetrend.

Many people make the mistake of selling in the initial stage of an uptrend. This is because they have been holding the stock for too long at a loss, and when they see a chance to get out at a small profit or a small loss, they quickly do it. This is a grave error, because more often than not, the price continues to move up after their sales.

How many times have you heard people say this, "I sold out just before the big rise?" Remember this: A trend in motion is likely to continue.

Never be the first to sell in an uptrend nor the last to buy. Never be the first to buy in a downtrend nor the last to sell.

If you find this article useful, please click "f" or tweet it. Thanks.

A novice trader is a sheep

Making some mistakes is part and parcel of the game. But to continue making the same mistakes again and again is unacceptable. If you are losing money consistently, better stop immediately. Upgrade yourself first and fight later.

The shrewd learn from the mistakes of others. The foolish don't even learn from their own mistakes.

A novice is bound to have many disadvantages and make many mistakes when he starts to trade. What are these mistakes and disadvantages? Below are some of them:

1. Yielding to the herd instinct

A newbie in the market is a sheep. He has not idea of his own. So he simply follow his friends, thinking there is safety in numbers. Very soon he will find out that there is no safety in numbers and some of his money has gone.

2. Listening to a tip

A tip is seldom a good tip, especially one that comes from a remiser. Why? It's simple logic. When a big boy wants to unload his stocks, he will get someone to tell his remiser that the stock is a good buy. Thus you buy what he sells.

There is only one good tip you can get from your remiser. Ask him for the name of the person who consistently wins. (Assuming there is one). Then you can watch him closely and learn from him.

3. Haste

Many mistakes come from haste. The Chinese says: 万事皆从急中错.
When you are new in the market, you have little patience to wait. Hence you move in and out of the market too frequently. You forget that every time you trade, you pay money to the government, the broker firm and Bursa.

4. Lack of experience, lack of knowledge & lack of wisdom

Experience is the best teacher. It is also the most important. Unfortunately, it is the most costly as well. And the market is the most expensive place to find this out.

5. Trading without a plan

It is said that if you failed to plan, you planned to fail. No one ever goes to business without a plan; no one ever built a house without a plan, and no one ever goes to battle without a plan. Trading in the stock market is akin to going to a battle. Do you think you can win without a plan?

6. Overestimating your own ability

This is a very common error. When you win, you say you are skillful; when you lose, you say luck is not with you.

My advice is:
Be knowledgeable, be patient, trade with a plan and always remember that
Luck Favors The Prepared Mind.

Pantech Going From Strength to Strength

Pantech made a net profit of RM15.6m (EPS 3.33 sen) for the 3rd quarter ended 30.11.12. In the previous corresponding quarter, it made only RM10.3M. The improved result is because of strong demand for its products in the oil and gas sector. It has declared a 3rd interim dividend of 1.2 sen.

At the last traded price of 75.5 sen per share, there is value in the stock. Click here to know more about Pantech.

Smartag displays bullishness

Smartag was in great demand last Friday. The above daily chart of Smartag clearly shows this. Hopefully, it is not a "false dawn".

The above chart of TMCL shows a breakout, and a pullback. The stock is likely to move higher. The last traded price is 41 sen.

Psychology & the Stockmarket

Dreman in his book, "Psychology & the Stockmarket" says:

The best chance an investor has is to stand apart from popular thinking. He must be willing to forego the thrill of being in unison with the market, in agreement with the expert opinions and with the exciting, seemingly surefire ideas currently in vogue.

This is no small sacrifice. To own the right stocks in a rising market is a heady experience. There is a wonderful blend of monetary gain and ego satisfaction in being right in a popular manner.

Man is a social animal. To succeed, the investor has to be able to withstand the tremendous pressure leading to conformity. He will face a continuing flow of negative feedback from the market, from experts and from groups of people whom he respects.

The reader may feel a little bit like the patient whose doctor has advised him to give up sex for his health.

Some of us might just prefer to die happy.

The above excerpt simply means that to succeed in the stock market, one must be able to avoid the herd instinct, have full confidence in oneself and act without referring to any one.

Shark's fin soup kills sharks and could poison you too

Think twice before you order shark's fin soup in the future, not only is it an endangered species but Chinese experts say it is potentially dangerous to your health.
Zhejiang authorities recently discovered that many shark's fins sold in the market were artificial products and some contained excessive levels of cadmium, an extremely toxic metal.
The artificial shark's fins are made of edible gelatin and seaweed gum. "These outlets purchased fake shark fins at a low price, but sold them to customers as genuine product for up to 1,000 yuan (RM488) a bowl," it said.
Similar results were found in an investigation by the province's Consumer Rights Protection Agency, which randomly selected about 10 samples of shark's fin soup collected from local restaurants for DNA testing. No shark's fin was found in any of the soups!

Insiders revealed that artificial shark's fins are widely available in the market. "Many restaurants and hotels have bought such product from me," said Lin Wenyu–a wholesaler that sells "vegetarian" shark's fin at Shanghai Tongchuanlu Seafood Market.
But it's not just the fake shark's fin soup that's dangerous. The agency also found about one-third of dried shark's fin in the province's markets contained excessive cadmium and methyl mercury.
Local news website Zjol reported that ocean pollution could lead to high levels of metals in the sharks and experts said excessive ingestion of mercury could harm pregnant woman and the development of the fetal brain and nervous system.
In recent decades, demand for shark's fin has increased, raising concerns about the sustainability and welfare of sharks. Each year, about 73 million sharks are killed around the world to meet the increasing demand for shark's fin soup.
The population of some species of shark have declined up to 99% according to WildAid, a wild animal conservation organisation that advocates shark protection.

Sharks are often alive when their fins are sliced off. Since their meat is not considered as valuable as their fins, they are thrown back into the water to drown or bleed to death.
Many Chinese celebrities, including legendary gymnast Li Ning, former NBA icon Yao Ming, retired diving queen Guo Jingjing and singer Liu Huan, have joined in shark protection campaigns.
Some luxury hotels and popular restaurants have also taken the traditional delicacy off the menu to stop the fish from becoming extinct. But many eatery operators continued to serve shark's fin soup, citing commercial concerns.
"The soup is one of the major dishes at banquets. People believe banquets would be degraded without it and they'll not hold events at our outlet if we don't provide this dish," said a restaurateur in Tianjin, who declined to give his name.
Experts said shark's fins are not as nutritious as many people believed. "What it contains is incomplete protein, of which the nutritional value is not as high as people expect," said Chen Shunsheng, professor of College of Food Science at Shanghai Ocean University.
Source: China Daily; ANN
Published: 10th January 2013

It's time to switch to bird nests.

How to do the *Gangnamstyle"

DRB-HICOM, HI HOPE, HI DANGER

If a thing appears too good to be true, it probably is.

Rumor abounds that DRB-HICOM may be privatized at between RM3.50 to 4.00.

The stock reacted fast to the rumor. It moved up 7 sen to close at 2.70 in heavy volume.

This type of news can be extremely dangerous especially to the naive players. In my opinion, Bursa should immediately suspend the stock and make an investigation as to who started the rumor. It should also take appropriate action if the rumor is created by someone who wishes to unload his stocks.

It will be failing in its duty if it fails to protect the small players.

Adventa PN 17

Adventa is now classified as a PN 17 company. What does this mean?

PN 17 stands for Practice Note 17/2005 (formerly known as PN 4).
The reasons for companies to be classified under PN17 are as follows:
1. Shareholders' funds less than 25% of their total paid-up capital.
2. Receivers have been appointed to take control of the companies’ assets.
3. The winding-up of some of their subsidiaries and associated companies.
4. The auditors have expressed adverse opinions on the companies.
5. Default in loan interest and principal repayments.
6.The companies have suspended or ceased their operations.

Adventa lost 5 sen at the close of trading this morning. It was lasted traded at 43.5 sen.

The company is not in any financial distress. I don't think there is much cause for concern. It was suspended because it sold its core business in the glove industry. It has 12 months to submit a regularization plan to Bursa and get it approved. I have no cause to opine it will fail to do this.

Sleeping Beauties, Love Them, Hold Them

Sleeping Beauties can make you rich.
The key attributes of a sleeping beauty are as follows:
1. Strong balance sheet with much cash and little or zero borrowings
2. Ill-liquid
3. Low PER (Price Earnings Ratio)
4. High NTA (Net Tangible Asset)
5. Popularity: low
6. Future Potential: great
7. Safety: High
8. Management: Passive and cautious

If you have deep pockets, and want to play safe, the best way to riches is to invest in sleeping beauties. These beauties are hard to come by, easy to love, and safe to keep. They pay you decent dividends while you wait for them to wake up.

The big money will come in when a meager or acquisition happens. Because sleeping beauties are prime candidates for takeovers, a meager or acquisition is sure to happen some time in the future.The problem is that we do not know when. If you are not patient enough, sleeping beauties are not for you.

In my investing career, I have invested in many sleeping beauties and profited much from them.

Whether they are suitable for you or not, the best person to judge is you, yourself.

Adventa HitsThe Limelight

Adventa is no longer in the glove business. It is now focusing in healthcare industry which it says is more profitable and predictable. The stock was up 19.5 sen after it went ex-dividend (XD) of RM1.70 per share. Prior to XD, the stock was last traded at 1.93. After XD, it closed at 42.5 sen on very heavy turnover. Bursa has queried the company on its sudden price-surge. If it gives a good and positive answer, the stock is likely to move up further. Interest in the stock is likely to be ongoing for a while. I like this stock because the company is in good hands with excellent principles.
Below is an extract from its website.

Company Principles

ADVENTA operates in many regions around the world, in varying political and social environments, with people of different races and cultures. The Group adheres to the following 6 organizational principles in its dealings with its customers, suppliers, shareholders, and partners:
1. Integrity
2. Corporate Responsibility
3. Quality and Value
4. Focus
5. Non-political Involvement
6. Environmental Care


Integrity
ADVENTA maintains integrity in all dealings and trade, working to achieve excellence through honesty and responsibility, and without compromising on its duty of care. Undue and illegitimate practices are not tolerated.

Corporate Responsibility
ADVENTA operates with a clear open policy when dealing with its shareholders and the authorities, making proper and timely disclosures of any and all material factors it faces. ADVENTA is to uphold and maintain the trust of its customers and shareholders.

Quality and Values
ADVENTA strives for quality in all it does, giving customers the value they expect and deserve. ADVENTA endeavors to meet customer requirements and exceed expectations with the products it manufactures and sells.

Focus
The Group maintains a clear and defined focus on its objectives and targets. ADVENTA is set to be a multi layered and multi-product group producing and distributing products used in the healthcare industry.

Non-political Involvements
ADVENTA operates for commercial enterprise and to create value and returns for its shareholders. The Group is determined to operate within the legitimate laws and regulations set down by the democratically elected governments and do not involve themselves in any political, philosophical activity or movement of any particular group, country, or region.

Environmental & Social Cares
ADVENTA operates within accepted social and environmental requirements. Its responsibility to society and social wellbeing is a priority in all its commercial decisions. ADVENTA works to achieve a cleaner and healthier environment for all employees and the societies it operates in, and uses its knowledge and ability to contribute back to its environment. The lives, careers and the rights of its employees are respected and enhanced in recognition of their loyalty and dedication in the organization.

Stock Market Report

Helium was up, feathers were down.
Paper was stationary.
Fluorescent tubing was dimmed in light trading.
Knives were up sharply.

Cows steered into a bull market.
Pencils lost a few points.

Hiking equipment was trailing. 

Elevators rose, while escalators continued their slow decline.

Weights were up in heavy trading.

Light switches were off.

Mining equipment hit rock bottom.
Diapers remain unchanged.
Shipping lines stayed at an even keel.

The market for raisins dried up.

Coca Cola fizzled.

Caterpillar stock inched up a bit.

Sun peaked at midday.

Balloon prices were inflated.
Scott Tissue touched a new bottom.

And batteries exploded in an attempt to recharge the market...

From Clyde's collection

One Up For Multico

Multico has announced that Dato Abdul Hasan (2nd Defendant) has agreed to pay back to the company Rm22,000,000, after the market closed today.

This means that for the financial year ending July 31, 2013, Multico's EPS will be boosted by 48.5 sen per share. For details of the payment, please refer to Company Announcements at Bursa.

The chart above clearly shows that accumulation of the stock has been ongoing for the past several trading days. So are charts useless or useful?

If you know how to read it, it is useful. If you don't, then of course, it is useless.

Multico is likely to move up further.

Happy New Year.