Feeling the Heat and Getting Burned From Bursa Trading?

The Bursa Equity market has not been kind for the past 3 weeks. As per my last posting on 4th May, the reason we have not been posting regularly is 

1st Pending for the Quarterly Result for 2015

2nd Direction from 1st Quarter Result that leads to our investment decision for the next few months.

So far the reports are generally NOT ENCOURAGING. Those FA, TA and Contra Kaki Chatroom has been quiet down. Most of  the people get caught especially in the penny stocks trading. 

Most of the reports have been announced. So, what's next?

1. Avoid Political Link Counters

2. Avoid Counters with No Fundamentals

3. Avoid Counters without the Theme Play (Properties & Commodities)

The good part is, be prepared to nibble some good counters when the month to be rolled over to June.

We believe with the current index, we may find some good shares to be invested.

=) 

  

Sell in May And Go Away - A Myth of Guidance?

This phrase is one of the longest saying on Wall Street. Does it apply to Malaysia as well? The truth is that the market doesn't crash during that period. The returns are just not exciting. In this article, we are sharing some of our input that might cause the lackluster in the stock market during May to October (no one has the right answer for this myth by the way). 

November ~ December (Portfolio Restructuring Period)

After a full 10 months of managing the Funds (Jan to Oct), generally the Fund Managers would do Portfolio Restructuring / Divestment of 'losing counters' so that their year end report card would look better. Those 'Winning Counters' or 'Average Counters' may be carried forward for year end reporting. Those cash from selling the stocks will be carried forward to next investment calender year. 

Jan ~ March (Stock Up for New Portfolio)

Old saying, early bird gets the worm. During the first and second month of the year, the Fund Managers / Institutional will be buying new shares with the cash they have. It is a brand new year for new report card. That is where some of the old uncles saying 'Chinese New Year Angpau' or the Ang Mohs saying 'January Effect'. It is not because the Government wanted to give you CNY monies. It is just Portfolio Management.    

Do you know that generally Institutional / Fund Managers participation rate in Bursa is around 70% to 75%. That make our Retail Participation rate around 25% +- . Now you know who make the call for the Equities Market? 

March ~ April 

The Listed Entities report card for the 4th Quarter and Full Financial of last year will be reported by End Feb (unaudited) . While the full audited financial statements to be announced by End April (audited). For those Fund Managers who did not manage to accumulate, they still have room to buy and restructure their portfolio on Mac / April. 

Why Sell at May?  

As the Portfolio Management by Fund Managers has been done throughout Jan to April, for the month of May, it is the time for them to wait and see the 1st Quarter Report of the current Calender Year Result. If the Quarterly Report it is favorable, they will continue to invest, if stagnant or lackluster, they will choose to wait and see before making the next move. Generally the 1st Quarter of every calender year send the message/benchmark of what will be happening next for the full calender year for the particular Equities Market. 

Summary

As we do not have the crystal ball to know what will happen next, let's wait and see the upcoming Report Cards from the Bursa Listed Entities. Of course our understanding and theory of 'Sell in May and go Away' might differs from others. It is just for sharing purpose. Personally we would wait and see the result from 1st Quarter 2015 before deciding our next investment strategy.  

Till then, 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 may be citied for illustration purposes.

Regards,

Humble Pie

Bursa KLSE Return For the Past 1 Year @ 0.45%

Dear Friends,

Looking at the return for KLCI Index @ 0.45% (1 year return), it is telling us the market is getting harder to Cari Makan. GST impact just started on April 2015, we are waiting for 1st Quarter 2015 reports anxiously to see where are the market going forward.

Bear in mind, the impact from GST has not been factored in 2015 Quarterly Reports by listed entities. As we are syiok syiok talking about making monies from the market, please exercise caution as well. If possible stay away from penny stocks. I believe you already seen the impact for the past 1 week.

To pick good stocks, you do not have to trade extensively daily. Do our homework, drill their numbers and their management profile, more or less we should be OK in our investment result.

Remember:

All listed companies in Bursa comes with an underlying Business. If the BUSINESS DOES NOT MAKE A BUSINESS SENSE, IT IS NOT A GOOD BUSINESS.  

Blindly relying on rumors or tips may keeps you alive but it won't be long. Please remember, it is your hard earn money.  I have never seen a single person able to consistently make money from market by punting the stocks. He or she must be either savvy in FA or TA to survive in the stock market.

Till then 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 may be citied for illustration purposes.

Regards,

Humble Pie

Berjaya Auto - Mazda is claiming the Market Share

First posted about on 20 Feb @ Price 3.45 with the Headline:

Berjaya Auto Berhad: 5248 - Banking on upcoming Mazda Models

Since then, price has slowly climb to 4.04 (up 17%).Today I manage to have a glimpse at the 1st Quarter 2015 vehicle sales. Latest BJAUTO Quarterly report was announced on 31 Jan 2015 with EPS 5.74.

Total vehicle sales for BJAUTO 1st Quarter 2015 has improved around 50% compare to 2014. From 2.2k (1st Q 2014) to 3.3k (1st Q 2015).

As BJAUTO has launched Mazda 2 (Jan 15) and Mazda 3 (Mac 15), it would be safe to assume that the current price is reflecting the good vehicle sales recorded.  

For the balance months of 2015, the improved version of Mazda 6, CX-5 and CX-3 is yet to be launched. Banking into this, I will continue to HOLD/ADD BJAUTO. Let's look again this stock once they have announce the next quarter earnings for 30 April 2015 - Most likely End June.  

Till then 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 may be citied for illustration purposes.

Regards,

Humble Pie

PMETAL - Tough Like a Steel?

China has removed export taxes on bars and rods of primary aluminium and aluminium-alloy effective 1 May . It will definately dampen further global aluminium prices. Although there are news that stated PMETAL is able to cushion the situation well (would not want to describe how steel industry works and PMETAL's strength), I would prefer to go to the simple analysis on their Financial Health and the probabilities: 

Price: RM2.83, PMETAL trading @ 7.5x. 

Rolling 4 Quarters EPS :  4.92 + 15.68 + 11.57 + 5.48   = 37.65

P/E = 2.83/37.65 = 7.51x

From here it looks good. But let's put a more stringent measurement here:

Normally their EPS is around 5 per Quarter, we take out the extremely good EPS 15.68 and 11.57 and replace it with let's say 5.

Forecast Rolling 4 Quarters EPS for FYE 2016 :  4.92 + 5 + 5 + 5.48   = 20.40

P/E = 2.83/20.40 = 13.8x

PMETAL 10 year average P/E is about 13x. Dividend yield about 2% plus. Means after discounting the 2 Quarters EPS for year 2016, we are looking at a Fully Valued situation, From FA perspective, the margin just acceptable. 

A sharing from a friend on the TA's Perspective: 

3rd Time potential rebound? Generally I would say for long term players, do consider to avoid. We would not able to gauge the domino effect that might happen after this. Technical wise, you can always trade via technical rebound or maybe dead cat bounce. Getting the spread in between. 

To go in or not, you decide. 

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 may be citied for illustration purposes.

Regards,

Humble Pie

Company worth a watch - CAN-ONE BHD

Dear Readers,

This stock was recommended by one of our group members and I find it quite interesting:
Credit to Mr. Koo.

P/E                    = 6.48       PASS
P/BV                 = 0.79       PASS
Dividend Yield = 1.85%    FAIL
Profit Margin     = 7.9%     PASS
ROE                   = 17%      PASS
Current Ratio     = 1.35      PASS
Quick Ratio        = 1.01     PASS

From all the quick analysis, CAN ONE only fails Dividend Yield. Looking at the Quarterly Report, the NTA has been growing steadily Quarter after Quarter. Performances has been stable.

With the recent Quarterly Report announced and the P/E has dropped to 6, it is a good catch. Downside risk is limited. The only concern is the Major Litigation within Can One, Dato See is challenging the GO of Kian Joo. Looking into this, the price more or less has been priced in.

Normally for a main board company, the P/E ratio should be around 10x.
If let's say we peg the P/E to 10x:

EPS 42 x PE 10 = RM 4.20
We give 30% haircut on the pricing =  RM 2.94.
Looking to gain around 8~10% from this counter.
If the price goes against me, I am ready to hold this counter.

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 may be citied for
illustration purposes.

Regards,

Humble Pie

A Look into Healthcare Stocks - YSP, & CCM and HOVID 21 Feb vs 1st May 2015

Dear Fellow Readers / Friends,

On 21 Feb, my comments on Healthcare Stocks:

Faber, KPJ and IHH - P/E is too high, I will Keep in View
YSP & CCM - Good dividend & Good FA, I will Monitor/Consider
APEX, PETERLABS, Pharma - I will Keep in view (I may consider if quarterly earnings improved and with new catalysts) -Neutral 
Hovid - P/E is high but having catalysts - I May Monitor/Consider.

Fast forward, let's look at the result for 21 Feb VS 1st May 2015: 

YSP increased 0.17cents = 12% 
CCMBIO increased          = 35.7%
Hovid increased               = 13.6% 

The one DID NOT recommended but the prices did shoot up: 

Apex Healthcare, Peterlabs, PHARMA, Focus Point and Careplus 
All hospital stocks: Faber, KPJ and IHH 

From this exercise, we did MISS A LOT OF OPPORTUNITIES for ignoring other healthcare stocks. But looking at the call for YSP, CCMBIO and HOVID we are SATISFIED with the results. Fundamental approach is always meant for a more tightening stock selection basis. We are still maintaining our stocks selection method in a more stringent way. 
(To note, personally did not manage to buy Hovid - was monitoring for too long - the one that got away).

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 may be citied for
illustration purposes.

Regards,

Humble Pie