Google+ Followers

Monday, 19 October 2015

Top Glove on Top of The World

1. Management Team / Major Shareholders:
Tan Sri Lim humble beggining since 1991 has made Topglove the largest rubber glove manufacturer in the world commanding 25% market share. Company is paying consistent dividends. Renewal of mandate buying back her own shares is a good news. Proposal of Bonus Issue and Share Grant Plan is indeed a good move to maintain the performers.






2. Financial Health Analysis 
Income Statement
i.Profit Margin = 11.2% / PASS (if < 5% fail)
ii.Profit for the past 5 years = PASS 
iii.Interest Cover = -29 / FAIL (if <3x fail)

Balance Sheet
iv.Current Ratio = 1.73x/ PASS  (if < 1x fail)                    
v.Debts to Equity Ratio = 0.38x / PASS (if > 3x fail)

Cash Flow
vi.Positive at least 1 year                     = YES / PASS

3. Pricing Analysis
i.  P/E Ratio: 
Nov 14 + Feb 15 + May 15 + Aug 15
7.85 + 9.09 + 11.7 + 16.68 = EPS 44.8
Price 8.81 / 44.80 = PE 19.5x Higher than PE for FD (Not Cheap)
ii.  P/BV 3.35 (Not Cheap)
iii. Dividend Yield 2.3% - Negligible



4. Economic / Industry - Theme play for now?
Yes. The volatility of RM/USD definately gives a good impact on TopGlove forex gain. The suprise EPS for Q4 2015 gives us the confident that the next quarter will be better due to the impact from forex gain for the period of June to Sept. We believe it has not been factored in. The challenging environment in Malaysia will be a minor issue to Topglove as most of their businesses are in oversea. The PE is 19x is indeed not cheap but it climb up from RM7.99 till 8.81 is well supported by their spetacular Quarterly Result.
Conclusion
Northcape Capital was a net sell while KWAP is accumulating from the market. From FA (di li)perspective, it is pricey and difficult to gauge. When we quoted on 'Stocks to Watch' on 11 October 2015, it was base on Theme Play (tian shi) and Price Volume Action (ren her). We were expecting a good Quarterly Report but it came out as an excellant Quarterly Report. For those investors who bought earlier last week, congratulations and do prepare to take profit. Happy Trading.

Disclaimer and Declaration

The full content of the article is for educational purposes only and should not be used as investment recommendations. We are not responsible for all investment activities conducted by the participants and cannot be held liable for any investment loss. Examples of specific shares is citied for illustration purposes.

Regards,

Humblepie188
Bursa Blue Ocean (by MIVCO)
Please like us at our facebook page - Bursa Blue Ocean

Sunday, 11 October 2015

Fundamentals Is Not By Financial Analysis Alone

Dear Members, to do thoroughly analysis on the targeted company, looking at the Financial Report card are insufficient. There are more to look at besides the company’s numbers. Most of them did not share the whole picture on how a stock being selected by using a complete checklist. We are sharing some of the commonly used parameters by Fund Managers to screen the stocks.
 
1. Management Team 
Good companies are being run by great management. Those involved before in scandals and hanky panky practices will be avoided. Their reliability and trustworthiness are low. For the announcement/speeches made by the MD/CEO, it must be in line with the company’s direction. If they say one thing and do another thing, it is a no go. Be careful on those syndicated counters. Companies go for listing to raise funds and not making money from the market. Remember that.
 
2. Financial Health Ratios
Companies must be in good health. Generally this is the main factor being used by FA clan practitioners to do their analysis. Tell me one thing; if the company is in bad shape, do you still want to put your hard earn money into it? Putting your money in the company means you are a shareholder. You share the upside and also the downside if the business.
 
3. Pricing Analysis 
You found a healthy company with good management, so what is next? Buy? Not really. Look at the price. Cheap or expensive. FD’s PE in Malaysia is around 18x, only blue chips with high dividends yield can command that valuation. Generally main board PE should be around PE10x to 14x while ace is around PE 7 to 10x. Anything more or less than the amount, you need to have a good reason / story to back your purchase.
 
4. Theme Play / Industry in Action
This is a subjective manner, people buy a stock because of the upside value. Generally funds will rotate base on what is hot now and not few years down the road. Why? If we buy base on FA, we can keep it for months and years but how about Fund Managers? For you to know they have 12 months only to invest. By the time November comes, they have to finalize their trades and cut some losing stocks to show better year end results with not much losses carry forward and some spare cash to start the next year. Basically 10 months. For your understanding, theme play is for midterm. Pure FA play is definitely more than 10 months.
 
Conclusion:
Some FA clan will argue this PE is cheaper than that PE and the forward EPS is better than that EPS. So buy A stock and not B stock. Remember, listed company is there for business purposes. It’s the Management Team who runs the day to day business. Do not rely only to Financial Health to make the investment decision. It is just a part of the Fundamental Analysis.
 
Disclaimer and Declaration
 
The full content of the article is for educational purposes only and should not be used as investment recommendations. We are not responsible for all investment activities conducted by the participants and cannot be held liable for any investment loss. Examples of specific shares is citied for illustration purposes.
 
Regards,
 
Humblepie188
Bursa Blue Ocean (by MIVCO)
Please like us at our facebook page - Bursa Blue Ocean

Pestech: My Darling Stock

1. Management Team / Major Shareholders:

After Humblepie188 sharing on 17 July @ Price 5.15, we did notice the CEO/ED Mr. Lim Pay Chuan made another purchase on 2nd Sept at the price of 5.31. This further enhances our believe that Mr. Lim has confident with his listed vehicle to continouously generating good profits. 

2. Financial Health Analysis 
Income Statement
i.Profit Margin = 14% / PASS (if < 5% fail)
ii.Profit for the past 5 years = Profit since listing in 2012 and growing / PASS 
iii.Interest Cover = 6.27x / PASS (if <3x fail)

Balance Sheet
iv.Current Ratio = 1.7x/ PASS  (if < 1x fail)                    
v.Debts to Equity Ratio = 1.3x / PASS (if > 3x fail)

Cash Flow
vi.Positive at least 1 year                     = YES / PASS

3. Pricing Analysis
i.  P/E Ratio: 
Sept 14 + Dec 14 + Mac 15 + June 15
5.06 + 5.18 + 5.37 + 16.78 = EPS 32.1
Price 5.95 / 32.10 = PE 18.5x Comparable to PE for FD (Not Cheap)
ii.  P/BV 3.65 (Not Cheap)
iii. Dividend Yield 1% - Negligible - Comstruction companies rarely pay dividends  
4. Economic / Industry - Theme play for now?
The past few months we had seen the volatility of RM/USD. From 3.50 to 4.20 It definately gives a good impact on Pestech's forex gain. The suprise EPS for Q4 2015 gives us the confident that the next quarter will be better due to the impact from forex gain for the period of June to Sept. We believe it has not been factored in. Pestech main revenues mainly comes from Cambodia and it is quoted in USD. The challenging environment is Malaysia will be a minor issue to Pestech's outlook. For construction companies like Pestech, she is defensive for current market scenario.
Conclusion
As long as Paul Lim still accumulating from the market, I'm confident with him. PE 18.5x is not cheap. For those investors who are willing to look at this counter, do prepare to hold mid to long term with less dividends. Congratulations again to Pestech who has joined the billionaire club.

Disclaimer and Declaration

The full content of the article is for educational purposes only and should not be used as investment recommendations. We are not responsible for all investment activities conducted by the participants and cannot be held liable for any investment loss. Examples of specific shares is citied for illustration purposes.

Regards,

Humblepie188
Bursa Blue Ocean (by MIVCO)
Please like us at our facebook page - Bursa Blue Ocean

12 Oct - 16 Oct 2015 Malaysia's market outlook - How long the rally can last?

Weekly Trend: Uptrend 

The weekly trend was bullish as the FBMKLCI up more than 200 points in less than 3 months time due to previous oversold sentiment, the recent strong Ringgit versus the US dollar and the possible delay of US rate hike. However, there is a “Shooting Star” candlestick pattern spotted in the index after 5 straight day’s gain which suggests possible short-term trend weakness or price consolidation.

Support: In between 1647-1652
Resistance: 1740
Support level pledged at 1647-1652 (rising window gap) while resistance level at 1740.
Sector in focus: Undervalued GLC linked counters, and water and piping related counters.

👉ENGTEX TP: 1.22, 1.30 SL:1.10
👉TOPGLOVE TP:8.60, 8.90 SL:7.70
👉OLDTOWN TP:1.42, 1.58 SL:1.24
👉FGV TP:1.80 SL:1.4
👉BONIA TP:0.81 SL:0.675
👉UEMS TP:1.45 SL:1.13
👉SUNCON TP:1.31 SL:1.16
👉PMETAL TP:2.40 SL:2.03
👉HOHUP TP:1.10 SL: 0.95

👍 Please like us at our facebook page - Bursa Blue Ocean

Sincerely,

Bursa Blue Ocean (by MIVCO)

Disclaimer and Declaration

The information is meant for the members of Bursa Blue Ocean (BBO). Disclosure and distribution of the message without the permission of BBO is prohibited. The full content of the article and write ups are for educational purposes only and should not be used as investment recommendations. We are not responsible for all investment activities conducted by the participants and cannot be held liable for any investment loss

Sunday, 4 October 2015

5 Oct-9 Oct 2015 Malaysia's Market Outlook

"Will it be a Bull Trap?"

Weekly Trend: Trending up with downside bias

FBMKLCI formed higher low and lower highs in the past 6 weeks. This suggests a bullish signal from technical point of view.

Support: 1620
Resistance: 1655

Support level pledged at 1620 while resistance level at 1655. we shall see further correction if 1620 level being violeted.

Sector in focus: Consumer. Drought causing the hike of raw food prices amid haze issues.

Stocks picked for next trading week:
1. Oldtown: TP 1.42, 1.58 SL 1.24
2. Bonia: TP 0.81 SL 1.24
3. Supermx: TP 2.20, 2.30 SL 1.92
4. Penta: TP 0.84, 0.90 SL 0.75
5. Unisem: TP 2.23, 2.30 SL 2.01
6. Comform: TP 0.865 SL 0.790
7. SunCon: TP 1.31 SL 1.16
8. Armada: TP 1.15 SL 0.885
9. Malakof: TP 1.86 SL 1.59

Please like us at our facebook page - Bursa Blue Ocean

Sincerely,
Bursa Blue Ocean (by MIVCO)

Disclaimer and Declaration

The information is meant for the members of Bursa Blue Ocean (BBO). Disclosure and distribution of the message without the permission of BBO is prohibited. The full content of the article and write ups are for educational purposes only and should not be used as investment recommendations. We are not responsible for all investment activities conducted by the participants and cannot be held liable for any investment loss.