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Saturday, December 3, 2016

Make Money From Stock Market is about FUTURE, and not just past ROI, Cash Flow, Dividend, etc

Sometimes I read a lot of arguements and disputes about who right and who is wrong.

I summarised these people into 3
1)Too much historical FA. HFA
2)Balance Approach- Future and Valuation. BL
3)Simplified Future. SF

HFA
There is one group of people who like Historical Fundamental Analysis. Talking abou net asset per share, PE ratio, dividend, cash, etc. Mostly about historical.
If a company PE ratio is super low, 4 times, a good buy. But what if the profit drop next two years? You may lose money.

If the asset worth RM10 per share, now selling at RM6 per share, good buy. But if profit keep dropping or no increase, we may not make money. Unless we are the owner, we buy at RM6 and then sell the whole company at RM10.

They will show you numbers,  then numbers and lastly numbers until your kepala pening "headache".

Don't get me wrong. All these are important. But we should spend more time thinking and searching info about the future. Nobody know about the future. You are half right. If your son is in Form 3, next year in the Future he will be in form 4. But sometimes unforeseen things happen. He decided to stop studying and concentrate on badminton and you got it wrong. We don't know 100% about the future but we can forecast based on information that we have.

BL
Balance. These group of people talk more about future, eg icon sifu. Most of the info he shared are about future, the project, the expansion, the new orders, etc. He shared details things of future. He uses and also shares past records eg profit margin, but is for the purpose of analysing the trend, future and worth. Focus mainly on future. But he doesn't stop there, he also values the stock, whether the current price are expensive. Example no point buying a stock if the profit will grow 100% but the share price is already up 300%. That's why he also touches on PE ratio etc.

Analysts are the same. They forecast and they value. That is why in research report only few simple tables showing some important figures and forecast. They don't much much about ROI, net asset per share, etc.

For me, this is the best approach.

SF
Some just said the stock is good if the profit is growing. This is too simiplied. That is why you can see many stocks 3 months later announce profit up 90% but the share price hardly move within this 3 months, because the stock price already up or PE ratio already very high.

×××××××

Just Vitamin C is not enough, that's why we need multivitamin.

I have attended a 2 full days course on fundamental, it did not benefit me much because they focus too much on cash, dividend, current ratio, etc. I thought that was just one topic, maybe Level 2 talk about Future. I went to chat with them, that's all, they just invest based in historical fundamental. The tutor was also quite surprise on the high % gain my friend made in 2013. I know why, because they focus too much on dividend and stable stock, their return per year will not be high.

Investment is about Future and Valuation. Not just future and not just valuation.

Not to say I am "Mr Know It All", I don't know all and I am learning. But because lack of time, I don't really read those just talk mainly on fundamental. Because I only have 24 hours a day, I focus on those who talk about Future and Valuation.

With this would like to thank all analysts and those who contribution information generously.

Thank you.

Saturday, November 26, 2016

JHM, DKSH, SUPERLON, TGUAN, Opensys, KESM, Oldtown, MBSB, MFCB, MFCB-WA, BioAlpha

Some updates for my personal diary for myself .

JHM
JHM stock announced good result. Big jump from previous quarter. Although revenue dropped a bit from preceding quarter, profit improved due to better margin on product mix. I think short term may not have big push upward, medium term hoping for catalysts from i)new Europe and Japan market profits, ii)aerospace certification and iii)transfering to Bursa Main Market in 2018. The growth is still there, but may need some time. Made another 100% return from a stock and this stock will remain in my list. You can see that I will not take out the stock from my list if made 10% or 20% or even 100%. Make decision not base on %, but the PE ratio and future growth.

DKSH Holdings stock.
Result is bad and DKSH share price down. Few weeks ago I took off OCK and Vitrox from my list. I have forgotten about DKSH.
Poor judgement on DKSH was due to:
i)The guidance of better result from management was wrong. Weak demand recorded.
ii)Reference of good future from a popular blogger was wrong.
iii)I have forgotten to exclude profit from the lost of major telco customer many months ago, which will make the PE ratio high.
DKSH has been taken out from my list. Damages? Less than 10% because the first entry price was low.

Taken out from the list not because of the drop or recent profit, but there is no concrete future growth.

You can see that average down is good only if the future is good. And do not hesitate to take off the stock from our list.

Superlon stock.
Superln as reported saw KWSG emerged as a substatial shareholder.

Thong Guan stock.
TGuan recent result is good and share price has improved.

Some of the growth stories from The Star...
The company is projecting a “double-digit percentage” growth in its revenue and bottom line.

.....He said the strongest growing markets were now in the Philippines, Vietnam and South Korea. The company, he said, is getting strong orders from Japan, Australia, New Zealand and South Africa.

.......On the outlook for the first quarter of 2017, Ang said the group had received enquiries and orders for the new value-added products such as the nano-layered stretch film materials, stretch hood materials, and films for automatic-packing machines.

The future growth is still there, so TGuan stock will remain in the list.

Opensystem stock.
Opensys profit not good. Share price also down. I  did not manage to get the reason on why revenue up but profit down except that it was due to currency fluatuation. Will continue to monitor because the customers' orders are still a lot for the coming months.

KESM stock.
Result good but the share price very hard to cross the RM10 consistently. If it crosses, probably another 100% gain for me.

BioAlpha Holdings.
BIOHLDG result as expected, nothing. But it is more for the future after the rights issue. Rights issue has been announced and ex date coming soon. The company will use the proceeds from rights issue to grow.

Mega First Corporatiob Bhd.
MFCB result for me is expected, drop on existing business but made from new hydro plant construction. Not sure how market will react. Past few weeks MFCB share price dropped because of uncertainty after the US Election and the volatility of Ringgit and Bursa Malaysia. I saw high % of its assets are in USD so strong USD should not be a problem. Although the share price was hit badly, now it has recovered nicely.

If we look at MFCB-WA, the price has recovered and went up higher than before it drop.

It is still not too late for those who wish to sell their mothers/cars/houses to sai lang on MFCB-WA. When Chinese friends took me that someone no waist, no backbone and no brain, it doesn't mean that. No waist means the lady's waist is big. No backbone means lazy. No brain means stupid. Sell mother sell car sell house does not mean we sell. Sell mother means sell mother shares (underlying stock). Sell car sell house means invest more after we have sought consultation from Financial Adviser. For more info on MFCB, please refer to my earlier posts.

MBSB.
Also announeced result. No comment.

Old Town stock.
Result not so good. Newbie also doesn't know his Oldtown and other stocks announced result. I don't think he knows how frequent a stock announces result. But he still made good profit.

Once again repeated again and again. It is not difficult to make money from stock market as proven by the stocks sharing here for the past 6 years and Newbie's journey for the past two years. Upside is unlimited and downside is limited. Sometimes we made wrong decisions, but losses are limited.

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Saturday, November 19, 2016

IQGroup, OPENSYS, JHM, Prlexus, Newbie

IQ Group released the financial result, it was okay nothing extraordinary. The stock price also reacted favourably.

Opensys stock price has crossed over RM0.40. Hope can sustain with good financial result.

JHM stock price is strong and people are waiting for their aerospace certification and financial result.

Just got to know besides coldeye, icon also interested in Prolexus.

Update on Newbie.
The day he started until now, the KLCI is down 15%, but his portfolio is up. He was very unfortunate because he started with oil and gas and some stocks that went down due to weak Ringgit. However, he still make profit and he is happy with the profit that he has made.

He has gone through some storms in the stock markets:
Oil and gas crash.
1MDB
Ringgit drop
Britain Exit.
China economy slowdown
Trump US Election.
Etc.

Being new in stock market, with all the storms, he still make profit. I estimated about 10% a year including dividend. Althought not very impressive, but:
i)He is new, lack of knowledge and doesn't bother to monitor his stocks.
ii)Always at the wrong timing and had experienced many storms.
iii)KLCI has dropped 15%.

I would say the performance is quite good. If with some experience and interest, the return could be much higher.

Basic things that he did?
Continue to invest in good fundamental growth stocks.

With this, I would stop reporting newbie journey because nothing much to write. The same old thing: keep investing in good fundamental growth stock and profit will come.

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Saturday, November 12, 2016

Strong USD stocks to buy, Top 30 stocks to buy. So many to choose from

Ringgit weaken again. For those who are interested to know stocks benefited from strong USD or weak Ringgit, refer here.

http://politemarket.blogspot.my/2016/09/list-of-export-counters-for-us-to-buy.html

Saw many people sharing cold eye stocks below. He is one of the famous investors in Malaysia. His name is in many listed companies top 30 shareholder list.

2016年11月5日, 冷眼分享会个股关注名單 ColdEyes Top 30 Stocks Pick:

>RM 3 (高价股)
PERSTIMA, TGUAN, ASIAFILE, TAANN, SOP, UMCCA

RM 1-3 (中价股)
HEVEA, SUPERLN, PENTA, IQGROUP, ECOWORLD, RCECAP, POHUAT, JAKS, MFCB, JTIASA, FREIGHT, PRLEXUS

<RM 1 (低价股)
JOHOTIN, MBSB, OPENSYS, MMSV, SOLUTN, RGB, HOMERIZ, SENDAI, WASEONG, OCK, WCE, WILLOW

Did not monitor all the stocks but noticed that Opensys share price have gone up for the past two weeks. No target price or fair value, will just hold first.

Out of the 30 stocks, I have TGuan, Superln, IQgroup, MFCB, PRLEXUS, Opensys.

MBSB, OCK, RGB, JOHOTIN, JAKS, I was also interested but did not buy or buy more or sold already. Talk about that later.

There are so many stocks in Bursa Malaysia but we have many common stocks. I think our approach is about the same, buying good growth fundanmental stocks.

TGuan, Superln, IQgroup, MFCB, PRLEXUS and Opensys I have shared previously, no need to shared again.

I have MBSB, but little just to join others. Just sold OCK at RM0.8x. I think I have made 100% or more than 90% on this. Lazy to search my entry price and the warrant that I have sold after the rights issue.

Reason for selling? Not that OCK is not good, is one of the strategies that I want to enforce. It is a growth stock but PE ratio not cheap. Also part of my portfolio adjustment. Very hestitate to sell. Those who hold need not worry, will make money from here.

RGB stock, I wanted to buy few weeks ago but didn't really study enough. Missed this because it went up. Blame my laziness.

Johotin stock. Bought and sold with medium profit because at that time didn't know how to get more info. Did not revisit this.

JAKS stock. Bought it because of the future prospect although I don't really like construction stock. Later sold with medium loss because of the fluatution of profit due to the nature of business. I have no holding power, not because lack of money, but because I don't really like construction stock.

That's all for the update.

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Tuesday, November 8, 2016

Sell Your Mother, Sell Your Car and Sell Your House. It Is Time To Sai Lang on MFCB-WA

Don’t misinterpret, sell your mother means for those who have MFCB mother shares, may work out computation on the potential upside vs risk on the mother share vs the MFCB-WA warrant and see whether MFCB’s son the warrant has better return than the mother or not.

It is not literally sell our mothers. We all know we love our mothers.

Sell Your Car and Sell Your House, I copy these phrase from ICON. All these words are a way to say go big into it. It is not literally to sell our cars and sell our houses. Just like the famous phrase “during drop, sarong up”. It doesn’t mean we sell our sarong to buy durian, it is a way of saying durian is extremely nice to eat.

For more info, please refer to my previous 3 articles on MFCB-WA.

By the way, the above is not a recommendation. Always seek professional advice on shares trading. The above is something to lighten up myself after two weeks of boring market where the Dow Jones index dropped for don’t know how many consecutive days.

 

Have a nice week ahead.

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Sunday, October 30, 2016

MFBC-WA 200% upside, Fibon, PWroot,

As shared in my previous two posts on Mega First Corporation Bhd warrant, bought the warrant at 0.62x and hoping to get 100% or 200% gain. I didnt not make the forecast, but is referring to analyst long term target price.

MFCB latest 4 quarters profit is RM88mil now. Last year the news said ...... enabling annual profit contribution of about RM300 million to the company from the following year (after completion of dam), Executive Director Khoo Teng Kiat told The Malaysian Reserve. Meaning once the dam project completed, big jump in profit.

I saw MFCB early this year. Traded a bit and made small profit. Analyst keep saying good. Newbie also bought it and hold. The reason I sold because once project finished, I thought no more income.

Recently price up a bit. So i went to study again. I found the word "concession".  It means after the dam is completed, they will start to sell power generated. Is like collecting toll, long term income for many years. Why I didnt see the word earlier.

I then shared the report with Newbie and he started buying more MFCB. Medium term MFCB target price RM3.16, which is good also. At that time MFCB was RM2.0x only. Then I check whether got warrant or not. I did some calculation on the warrant, wow wow wow!!! It could have more than 200% upside. And I started buying and Newbie sold his MFCB and buy the warrant.

The risk is always something may go wrong. Whatever stocks we buy, also the same. But if this stock perform as per what analyst forecast, then the potential upside is very high.

Price has went up in the past few days. One thing I have to highlight, one of their power operations in China which contributes 70% of their earnings will expire next year 2017. But analyst said in 2022. Maybe they had got the extension. Execution and environmentalist also pose a risk. No worries because their new dam profit will few be folds higher than their current total profit.

More detail, please refer to my  previous two posts.

As mentioned earlier, I will not go big in Fibon. It announced some bad result. Sold all. Made a bit from first batch. Lose 10% on second batch. Net still lose few percent. This does not affect my portfolio much because small investmemt. Reason for selling? Same as what I have shared earlier, no concrete growth plan. If no concrete growth plan, why did I buy? Because many people keep saying good got growth, without providing details. Yes, I made mistake by buying little, should not buy at all. But I have improved on this. I posted in my blog, few weeks ago I have already changed my portfolio and strategy, if no details, I will not buy. This Fibon is those left over and also I have decided to add some for long time.

Anyway, small loss on small purcahse nothing much to talk about.

I have forgotten I'm supposed to study more on PWROOT. If good, may start to buy.

This year can be considered a good year. Good gain for many stocks especially JHM and KESM, gained 70% to 80%.

Some stocks making losses but these are very small. The real casualty is Tek Seng.

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Tuesday, October 25, 2016

MFCB Warrant Upside Potential table

Update from my previous post. How to read the table.

RM2.23 is MFCB current share price and warrant is RM0.675.

If MFCB up 35% to RM3.00 and the warrant trade at 20% premium, then MFCB-WA will be RM1.40, 107% upside potential.

You can ignore those in blue as I don’t think that can be achieved. Because the higher the share price and warrant price, the lower the premium.

MFCB medium target price is RM3.16 given by Public Investment Bank research analyst.

If MFCB up 42% to RM3.16 and the warrant trade at 20% premium, then MFCB-WA will be RM1.60, 137% upside potential.

MFCB long term fair value is RM4.43 given by Public Investment Bank research analyst.

If MFCB up 99% to RM4.43 and the warrant trade at 0% premium, then MFCB-WA will be RM2.23, 230% upside potential.

For those who have lack of long term faith, MFCB at RM3.16 does not look super difficult. Upside potential for warrant will be 137%.

Risk?
As usual, 100% loss. Max.

In stock market, always think big, don’t just make 10%. Think 100%

Invest like a businessman for long term.
 

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Disclaimer Clause
The information contained in this blog is my personal diary and has been prepared solely for myself. Without any previous reading material or discussion, by just reading my blog contents, reader may misunderstand the contents.
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This blog also is not an advice, recommendation or an invitation to buy or sell or invest in anything, eg shares, futures, derivatives, gold, etc. Consult your investment adviser before making any decisions.
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