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Thursday, March 31, 2011

Hua Yang Shares news - My Eyes Pop Out

When I saw Hua Yang fair value RM2.76 from CIMB, my eyes pop out and I nearly fall off my chair. But on second thought, why should I be surprise?

Hua Yang fair value by CIMB is almost 200% more than Hua Yang share price when I first posted on Hua Yang in November 2010. That is ALMOST  200% upside. But then I told myself, why should I be surprise, this is possible because of Hua Yang PE ratio, which is very low.

Hua Yang share price has gone up more than 50% recently. Congratulations to those who have bought it.

Therefore, I would strongly recommend investors to invest in stocks that are low in PE ratio. Some will argue that low PE ratio is not enough, growth is also important.

Anyway, up to individuals how they want to evaluate a stock. For me, I am using PEGGY Method, which evaluate stocks base on PE ratio, growth, gearing and dividend yield.

I have posted few articles on Hua Yang for the past few months. For more info on Hua Yang share, target price or new, here.

For more info on PEGGY Method and my blog, here.


Wednesday, March 30, 2011

I still Outperform the Bursa Malaysia KLCI

I still Outperform the KLCI. Look at the comparison at end of February 2011.

KLCI one year up 17.34%
My Fund up 29.93%

KLCI 6 months up 4.83%
My Fund up 10.36%

Actually my fund had performed better if I include the charges.

1.53% annual fee.
1.2% additional charges for trades.
3% one off.

If I just add the 1.53% and 3%, my return is at least 34.46%, KLCI up 17.34%.

I am quite surprise that I still can outperform the KLCI. The reason is as I have mentioned in my previous post, it is very difficult for me to outperform the KLCI because I cannot easily buy and sell in this fund. I sometimes have difficulties to cut loss or sell if the stock financial result is below expectation. One year I just made few transactions. Sometimes I get disappointed that I was not able to buy or sell my shares timely. Furthermore this fund charge me huge annual fee and other fees.

Why I still manage this fund even I know my fund performance may not be as good as I want? This is because although I am facing difficulties in managing this fund, I am confident that it can perform much better than FD, EPF, savings account interest, and other low interest paying investment.

For background of my fund, click here.

Due to the difficulties, I am happy if I can just beat the FD rate every two years.

My blog.


Tuesday, March 29, 2011

Smartag Solutions Berhad IPO

Smartag Solutions Berhad IPO
Open Date to subscribe or apply 28-03-11
Closing Date 04-04-11
Smartag IPO price RM 0.31
Issuing House MIDF 639
ACE Market
Tentative Listing Date 18-04-11

Public Issue Of 57,000,000 New Ordinary Shares Of Rm0.10 Each In Smartag Solutions Berhad (“Smartag Solutions Shares” Or “Shares”) At An Initial Public Offering Price Of Rm0.31 Per Smartag Solutions Share Payable In Full Upon Application Comprising:-

• 50,000,000 New Smartag Solutions Shares By Way Of Private Placement To Eligible Identified Investors;
• 5,000,000 New Smartag Solutions Shares Made Available For The Eligible Directors, Employees And Persons Who Have Contributed To The Success Of Smartag Solutions, Its Subsidiaries And Its Jointly-Owned Entity; And
• 2,000,000 New Smartag Solutions Shares Made Available For Application By The Malaysian Public,
In Conjunction With The Listing Of Smartag Solutions Berhad On The Ace Market Of Bursa Malaysia Securities Berhad (“Ace Market”).

Recent IPO performed well, now worth to apply Smartag IPO?

Business Times 26/03/2011
Smartag Solutions Bhd, a radio frequency identification (RFID) solutions provider, hopes to raise RM17.7 million from its initial public offering (IPO).

It is scheduled to list on the ACE Market of Bursa Malaysia by mid-April.

"About half of the proceeds will go to capital expenditure for the land checkpoint and port projects. We're expanding into a new business," said Smartag chief executive officer PK Lim.

A typical RFID tag consists of a microchip attached to a radio antenna mounted on a substrate. The chip can store as much as 2 kilobytes of data. For example, information about a product or shipment - date of manufacture, destination and sell-by date - can be stored inside the tag.

To retrieve the data stored in an RFID tag, one requires a reader, which is a device that emits radio waves and receives signals back from the tag. The reader then passes on the digital information to a computer system.

RFID is commonly used as a track-and-trace technology in the libraries, warehouses and healthcare industry. It is also useful in logistics supply-chain tracking.

Essentially, the RFID technology speeds up product distribution, enhances security and facilitates better inventory and warehouse management.

"Most of the players in the RFID market use proprietary systems," he told Business Times in a recent interview in Kuala Lumpur.

Smartag's IPO entails a public issue of 57 million new ordinary shares at 31 sen each.

Lim said Smartag is an active player in port-to-port, and cross-border RFID cargo system and works closely with EPC Global as well as represents Malaysia Department of Standards in ISO Technical Committees TC 104 Freight Containers in drafting ISO 18186 standards for Freight Container-RFID-Cargo Shipment Tag.

What this means is Smartag has an edge over its peers.

"We develop our products and services to be of international standards. Basically, clients who use RFID in containers will have additional security and will be able to share information across the supply chain.

"Our system can inter-operate with other standards outside the country for ease of our clients' globalised trading," he said.

For more info on IPO.

My blog.


Monday, March 28, 2011

Buy TSH share from old newspaper analyst research analysis report

I have written a post on how we can use old news paper strategy to make money from the stock market.

What is TSH news from old newspaper? In late 2007, there was one article on TSH appeared in The Edge weekly. These are the points:

1)Land are getting more and more expensive. TSH had bought huge landbank at a cheap price.
2)Most of TSH huge landbank are unplanted. They have great profit potential when they start planting.
3)Palm oil price probably will stay above RM2,000 and easily RM2,400.

Many plantation companies want to grow. But they need fund to buy land. Now it is not easy because lands are getting more expensive.

Many people know about the TSH news, but many have ignored it because of uncertainties in planting the land. Also, harvest will take about three years.

But as I have said in my Old Newspaper post, we don’t just ignore the good news. We may not buy yet, but keep the news and revisit the company later when the time is right.

Is now the right time to buy TSH? Are their trees starting harvest? Shares prices are like a pregnant lady, 9 months in advance to conceive before baby is born. Shares prices normally react 6 months in advance before the actual things happen.

More info on pregnant lady here.

In TSH fourth quarter result 2010, we have already seen some trees started harvesting.

Up to individuals to decide whether to buy at the time of conceive or at the time the baby is born. Buy at the time of conceive will have more risk due to market sentiment and uncertainties, but when the time the baby is born, the price may be different.

More on TSH.

More on old newspaper strategy.

More on my blog.


Sunday, March 27, 2011

Free durian for life by joining Public Bank membership

Durian season just started. My friend has joined the Public Bank membership in 2010 and he got free for life. Normally he and his wife spend about RM50 per season, If one year got three seasons then RM50 X 3 = RM150. If got two seasons then just RM100.
How to join Public Bank membership and get free for life? He bought 300 Public Bank shares amounting to RM3600 in 2010 and last year received RM150 Public Bank dividend.
With yearly dividend from Public Bank shares, he can have free durian for life. Durian price may increase, but the dividend also will increase.
If you want free for life, then you can buy Public Bank shares or other shares that pay you good dividend. If after many years you decided to sell your membership, you can easily sell it. If you want more durian, then you may have to buy more shares. Enjoy your durian.
The above is just for illustration of the benefit of dividend. Whether you really receive dividend is very much depend on the profitability and dividend payment of the stock that you buy.
Visit my blog for more info on dividend.

Saturday, March 26, 2011

Buy CDS Bhd at RM3.80 with target price RM4.40 and I guarantee that

When I started buying CDS Bhd, it was at RM2.40, then it went to RM2.70. Later it went to RM3.30 and now CDS Bhd share price is RM3.80.
It keeps going up and didn’t come down. I think this can be long term investment.

 I can see CDS Bhd will hit RM4.80 but not sure when.

Some of you must be wondering what is CDS Bhd share? It is actually real Chicken DrumStick (CDS) meat. Yes, it is the chicken drumstick meat (together with chicken thigh) that I am buying from market on Saturday morning.

Polite Market’s Comment:
I want to bring out a point of inflation. Can we hedge our money from inflation by buying shares in the stock market? The answer is yes.

Assuming the chicken seller cost was $2.00 and he was selling at 20% mark up at $2.40. He made $0.40 per drumstick. If he was selling 100 pieces per day, and he made $40 per day.

If his cost is $4.00 and he sells at 20% mark up at $4.80, he makes 0.80 per piece. And if he sells the same 100 picese per day, he will be making $80 per day.

For some companies, although the number of customers did not increase, but their profit can be increased.  But if they can increase their number of customers, then it will be better.

If we want to hedge against the inflation, one of the ways is to invest in stock market.

More on stock market, visit my blog.


Friday, March 25, 2011

Worth to invest in 4D? Or stock market is better?

For those who are not familiar with 4D, let me explain.

4D is gaming or betting.
Customer will pick a Four digit numbers from 0000 to 9999.
For every $1 bet, Prizes are:

First price $2,500 X 1.
Second price $1,000 X 1.
Third price $500 X 1
Special Prize $200 ( 10 numbers will get $200 each).
Consolation prize $60 (10 numbers will get $60 each).

What are your chances?
Base on what we have learned from school, if you buy $1 for all the numbers from 0000 to 9999, you need to pay $10,000.
Your total winnings will be just $6,600. Yes, ONLY $6,600.

What if you just buy $10 on one number?
On an average or base on probability, your $10 will become $6.6.

One week got three draws. Assuming you buy $10 on every draw for one year (52 weeks).
You would have invested $1,560 and you will end up with just $1,029.60. You lose $530.40, or 34%.
If you buy from two gaming companies, your losses will be double.

I heard now the special price is just RM180 and not RM200. That means you are getting worse.

In stock market, if the company is growing at an average 10% per year and dividend yield is 5%, on an average you probably will be making about 15% per year. The more you invest, you more you make.

Minimum to buy 4D is $1.00.
If I am an analyst, I would rate 4D a STRONG SELL.
Current 4D share price is $1.00, and my target price fair value for 4D is $0.66 (STRONG SELL).

Many will argue that it is based on luck. Some strike few hundred thousands.
Yes, congratulations.

But for those 99.77% of majority who are not so lucky, the more you invest, the more you lose. The longer you invest, the more you lose. The more companies you buy from, the more you lose. You want to invest in 4D?

Go to my blog for more.


Thursday, March 24, 2011

52 Ways of Making Money in Stock Market - Part 10/52 - Theme / Industry

Theme/ Industry
Most of the time, the counters that go up are in the same industry or same theme. Eg Oil & gas, water, property, IPOs, China stocks, Sarawak stocks, constructions, stem life, plantations, penny stock, IT, warrants, stock broker, certain tycoon’s counters, etc.

Eg if you saw few construction counters prices going up with heavy volume, then you may consider other construction counters that have not gone up yet.

Some Themes are always being used, such as IPO. During bull market, they will have rotational play, eg they may play certain industries and very often they will play recent IPO counters. When you see few recent IPO counters moving up, you may want to chase or you may consider other IPO that have not moved up. Another one is stock broking counters such as OSK, TA, ECM, etc, or even Bursa. If you notice market sentiment is good, volume has increased, very soon these counters will go up.

You can create different watch-lists for different industry or theme and start monitoring.

Not easy to catch the theme and you need patience. Need a lot of monitoring. Sometimes when you join in, market sentiments have changed and nobody follow.

This is just a short term play, and many people refuse to cut loss when making wrong prediction or market sentiment have changed. This will then result in holding counters for long term even the counters are not good in fundamental.

Due to time constraint, I am not so good in monitoring, but I got some friends or remisiers will alert me when they spotted any.

Actually I am not good in this, so I’m unable to offer much comment. You may refer to remisiers or those who are good in this.

Please bookmark me and visit me again.
More info on 52 Ways of Making Money in Stock Market.....


Wednesday, March 23, 2011

Bursa Malaysia stock market high dividend yield stock

One of the ways to look for Bursa Malaysia stock market high dividend yield stocks is to look at the company dividend payout ratio.

If a stock forecast PE ratio is 10x and the dividend payout ratio is 40%.
Then 40% divided by 10 = 4% dividend yield.

Zhulian shares dividend payout ratio is 60%.
Assuming Zhulian forecast PE ratio is 8x. Then 60% divided by 8 = 7.5%
Zhulian forecast dividend yield will be 7.5%.

Pchem dividend payout ratio is 50%.
Assuming PChem PE ratio (forecast 2011) is 20x.
50% divided by 20 = 2.5%.
Therefore, Pchem dividend yield will be 2.5%.

Why use forecast PE ratio?
The dividend yields as stated in the newspaper are historical dividend and the company may not pay that amount of dividend anymore.

Why dividend payout ratio is important?
If don’t have such a policy, we don’t know how much dividend the company is going to pay. If the company have a dividend payout ratio policy, and with forecast PE ratio, we then know what is the forecast dividend yield.

Therefore, we should look for stocks with low PE ratio and high dividend payout ratio because it will lead to high dividend yield.

But I want remind investors not to invest in stocks just base on high dividend yield. High dividend yield stocks are good, but other things also important, such as PE ratio, growth, gearing, etc.  I suggest we use a minimum of few factors, that is PEGGY Method.  

Do you want to get 10% dividend yield but your share price drop 20%?

My blog link.

More on why Dividend Payout Ratio is important and a list of companies dividend payout ratio such as Topglove, Freight Management, Mamee, PChem, etc. Click here.

More on dividend.


Tuesday, March 22, 2011

Buy TSH Resources Berhad Share

Why buy TSH share? Because TSH is a strong growth company in the coming years.

Based on TSH latest news analysis, the latest quarterly result 2010 was impressive. Earnings per share for the full year 2010 was RM0.207, and base on TSH share price of RM2.70, TSH PE ratio is 13x. 

TSH 4th quarter 2010 EPS was RM0.108. If we use RM0.108 X 4 to estimate for the next full year, then TSH EPS will be RM0.432 and TSH PE ratio will then be 6.25x only.
But we should not use one quarter result to multiply by 4 because sometimes quarterly result is based on seasonal factor. I use it to multiply by 4, it is just for reference only.

Whether can buy TSH share? Let us do a simple PEGGY Method analysis.
PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

TSH PE ratio (Dec2010) is 13x, not cheap.
TSH Growth? From TSH analyst research reports, many analysts have different forecast, but they have one thing in common, that is high growth. Most forecast is about 20% to 30% a year. With high growth, then TSH can trade at higher PE ratio, and at current PE ratio of 13x, it is relatively cheap.

TSH gearing is high. But as I have mentioned in my earlier post on TSH, according to a friend of mine, TSH cash flow is strong. And recently this has been confirmed by HwangDBS research saying despite TSH high gearing, the cash flow is strong and HwangDBS remains positive on TSH share despite its relatively high gearing.

TSh Dividend yield is about 2% only (on a low side). As committed by TSH management, TSH dividend payout ratio is about 20% to 30%, this is slightly low. But as long as the profits continue to grow, you can expect a higher dividend.

Polite Market’s Comment:
I saw many research analysts recommend to buy TSH, such as Hwang DBS Vickers Research, MIDF, Philip Capital and AMMB.

MIDF also have a very high TSH share price target fair value, that is RM4.00.

However, we should not just buy because of analysts recommendation. Therefore I have also presented TSH share analysis base on a very simple PEGGY Method.

TSH growth also may be higher if they have successfully used the high yield Wakuba ramet (high quality clone) that can yield 38MT/ha of FFB in prime years (vs. c.22MT/ha now). More info here.

In my earlier post, I have also listed some of the disadvantage of buying TSH.

There is no perfect stock, and it is up to individuals to make decision.

But on my own personal opinion, TSH share can be considered as one of our portfolio stocks. Purely on my opinion, and you have to consult your financial planner or dealer or remisier.

More on TSH.

Reason why we cannot use one quarter profit to multiply by four to forecast the full year profit, here.

Go to my blog for more.


Monday, March 21, 2011

Perodua new mode 2011

When will Perodua launch new model in 2011? Perodua probably will launch a new model in July or September 2011. I think it is time for Perodua to come out with a new model to replace MyVi because MyVi sales has dropped.

With Perodua new model, this will improve MBMR sales and profit, and hopefully MBMR share will be benefited. I think most analysts have already factored in Perodua new model in 2011 and MBMR share price may have also factored in the new Produa model.

According to RHB research, MBMR will be having low growth for the next few years. But with the new Perodua model, hopefully it can exceed RHB expectation.

What is the target price fair value of MBMR?
In MBMR research analysis reports, most analysts have a high target price fair value for MBMR.
MBMR target price fair value RM5.00 (OSK buy)
RM3.95 (RHB buy), RM4.30 (MIDF buy).

More info on MBMR.

My blog link.

With MBMR share price of RM3.00, MBMR PE ratio is quite low, but the concern is growth and some people said AFTA.

Up to individuals to decide.


Sunday, March 20, 2011

Snooker in Stock Market

How snooker can relate to stock market?
In Malaysia, what is our perception on snooker?

My friend’s parents always refuse to let him to enter snooker centre. His parents said snooker centre is full of men, bad people, ponteng student, etc. Conclusion, it is bad.

I will not argue with his parents because most of the snooker centre are as what his parents have described.

But, actually snooker is a gentle game. If you look at the international snooker competition, the snooker players dressed up very smartly. The audience is so quiet enjoying the game. It is such a high class game.

When we talk about snooker in Malaysia, we always think that it is a bad game. Same thing here, when I talk about stock market with friends, they will make many bad remarks: Hands have been burned, gambling, risky, stock market cheap people, contra, cannot make money , etc.

But what actually is stock market?
It is a place for the owner to raise fund easily. It is a place for investors to invest in a business and make gain without putting effort to run the business. It is a place for investors to buy and sell share easily.

Polite Market’s Comment:
Actually snooker is a nice game. It is some people who play snooker that behave badly that cause poor perception about snooker on people’s mind.

Stock market is also a good place for investment. It is some people that invest in a greedy way that cause poor perception about stock market on people’s mind.

My blog link.


Saturday, March 19, 2011

Do not follow analysts or experts recommendation

Do not follow analysts or experts recommendation.
Before you read further, please take note that this is not my opinion. This is what someone told me what he has read from few internet articles.

The points are:
From a Bloomberg news, most of the Best Buys recommended by analysts, these stocks on an average performed poorer than the general market.

Mutual Fund managers also find it hard to outperform the stock market.

The research by Bloomberg, on the particular period in the research, on an average the experts or analysts’ stocks gain 73%, but the S&P gain 95%. You will lose out if you buy through the experts. Worse is when you also need to pay the high fund manager’s fees and annual fees.

Do NOT think that 73% is ok. If every year you lose out and left behind, after many years with the compounding effect, you will be very very far behind.

Polite Market’s Comment:
In my opinion, I think analysts are still doing good job in making the stock statistics and trying the very best to forecast. Just imagine what if all analysts are gone. We will then have no directions.

I think the followings are the reasons why fund managers and analysts stocks recommendation perform poorly:

1. Analysts are also human, same as you and me. When market up, everybody is very bullish and that everybody includes you, me and analysts.

2. As human, analysts also made mistakes.
3. Analysts have their own objectives or agenda. They cover certain stocks because of certain reasons. They may want to cover and recommend stock A, but stock A company is not so friendly and refuse to provide information. Analysts mainly cover stocks for big fund managers, and because most big fund managers can only buy big counters, analysts are under pressure to cover more on big counters even though the stock is not that attractive.

4. As fund managers, they are governed by strict rules and regulation. Not all counters can be easily purchased by fund managers.

5. Some fund managers can only buy big counters, even some stocks are very good, but just don’t have the volume for the fund managers to buy.

In my opinion, I think we still can refer to recommendations by analysts, but we need to have our own judgment, eg refer to more analysts to do comparison or do a bit of our own analysis, such as PEGGY Method.

Previously I have posted on how recommendation by analyst has failed.
You can refer here.

My blog link.


Friday, March 18, 2011

Hotel Stock Market? Or hell stock market?

How name and IC can help us improve on our stock market trading profit.

Mr A was looking for Mr B in a hotel. He gave the receptionist Mr B name, but unable to locate Mr B room. Went to few hotels also unable to find. You know what happen? Mr A gave the wrong name AND the DATE was wrong.

There is no way that the Hotel will be able to locate Mr B room if they are given a wrong name and DATE. These are the TWO MOST important info.

In stock market what are the TWO most important factors?
Stock Selection AND Timing.

If you bought a wrong stock, and the timing is right, you may make profit.
If you bought a good stock, but at the wrong time, sooner or later you may also make profit.
BUT if you bought a wrong stock AND at the wrong time, you probably end up with losses.

How to select a good stock?
How to buy at the right time?

How to select a good stock?
There are many ways to select a good stock, and I am using PEGGY Method.

How to buy at the right time?
Some use technical analysis, some look at economy data, etc. I don't know all these, so I use Dollar Cost Averaging.

Please remember the stock selection and timing are important.
If you are wrong in the two, it will be a hell stock market.
If you bought the right stock and at right timing, will be just like in the hotel enjoying our life.

More info on PEGGY Method

More info on Dollar Cost Averaging


Thursday, March 17, 2011

52 Ways of Making Money in Stock Market - Part 09/52 - Window Dressing

What is window dressing? Many ways and meanings of window dressing, but I only explain what is useful here. Window Dressing is a strategy used by mutual fund, unit trust company, fund manager or the listed company, to push up the prices of the stocks at the end of the reporting session (eg month, quarter or year). In short, they will push up the prices of certain stocks so that in their reports, they can show others that they perform well. This generally happen in end of the year because of yearly reporting.

What you can do is to key-in to sell your shares at very high price on the last day of the year or few days before year end. You can easily buy back at much lower price on the next trading day.

Chances of being able to sell at that price is very slim. Nowadays, Bursa Malaysia doesn’t like it and they want to fine/penalize people who push up the prices. But I still see prices went up substantially on the last trading day of the year and come down on the next day.

Why not give it a try, I managed to sell it. But if you are lazy, then is ok, because the chances are low.

Please bookmark me and visit me again.
More info on 52 Ways of Making Money in Stock Market.....

My blog.


Wednesday, March 16, 2011

KNM Share Order Book at all time high and target price also higher

In KNM latest news from research report analysis, KNM secured new orders worth RM693 million. The total order book is now RM5.4 billion, which is an all time high for KNM Group Bhd.

KNM share started very well and the profit keep growing and the share price keep going up. KNM share price keep hitting all time high. You know what happen at that time? Many analysts start to cover on KNM stock and recommended to buy.

Then you know what happen? In 2008, KNM share price drop and keep dropping. KNM share price drop to a very low level and then many analysts recommend to sell.

Then you know what happen? After most analysts recommend to sell, KNM share price start to go up. And now I saw many analyst recommend to buy KNM stock.

Actually analysts were based on forecast to make recommendation. KNM has made few decisions that were unexpected. Furthermore, some of the KNM profit forcast is made by KNM itself, it is called guidance. Therefore, we can not blame analysts on KNM.

Polite Market's Comments:
Now that KNM order book is at all time high, and my question is this.... is KNM share price at all time high? The answer is no. Why?

I do not know the real reason, but this is my opinion.
When KNM share price was at all time high, at that time most people (including analysts) was so confident on KNM share, and the share price keep going up. Now that many people have lost confident in KNM share and it is trading at normal PE ratio.

KNM target price fair value RM3.34 OSK trading buy
KNM target price fair value RM3.50 HwangDBS Buy

KNM target price fair value RM3.06 Kenanga Buy
KNM target price fair value RM4.80 TA Securities Buy

KNM target price fair value RM3.25 AM
KNM target price fair value RM3.45 RHB

KNM target price fair value RM3.20 MIDF

my blog.

More info on KNM


Tuesday, March 15, 2011

Should we pray for crisis in stock market?

When I look back at my trading record in the stock market, I made most of the money when I bought shares during stock market crisis. Because of that many people do hope that stock market crisis will happen again soon.

Should I pray for stock market crisis? And when it happens I then buy many shares and make money?

Before I answer my own question, let us see what some people are praying for?

In movie or real life, you will notice that some people pray the followings:
Pray that he successfully revenge and kill somebody
Pray that ‘god’ will reveal 4 digit numbers to him and he will strike 4D
Pray that ‘god” will prosper his illegal business

We know that in many premises, such as disco or night club, there are many illegal businesses such as drugs, prostitution, football betting, etc. Then there will be a statue/idol that the owner is praying to, so that the ‘god’ will take care of his business.

Please take note that I am NOT criticizing religion, but I am just giving out opinion that what people should pray.

I think we should not pray for something that is bad, this is my opinion.

Back to my question, should we pray for stock market crisis? My own answer is no. Because during market crisis, many bad things will happen. Many people will lose their jobs, inflation is so high that many families will suffer, many borrow and unable to pay back, etc.

Many economists said that economy and stock market is a cycle. Up and then down, and up again, and down again, etc.

I think we should not pray for stock market crisis, but as what the economists have said, it is a cycle. We will just wait for the crisis to happen and buy shares from the stock market and make our money, without praying for the crisis to happen.

You can refer to my earlier post on investing during stock market crisis.

My blog.


Monday, March 14, 2011

APFT share price target fair value IPO

APFT IPO share price is RM0.50.

Let us do a simple PEGGY Method evaluation.
PE: PE ratio
G: Growth
G: Gearing
Y: Yield (dividend)

Using APFT Berhad share price of RM0.50.

APFT PE Ratio is 8.9x (Dec2010).
Growth 5.4%(2011) and 16.5%(2012)
Gearing about 0.2x to 0.3x.
APFT dividend yield, no fixed dividend policy.
Above figure from TA Securities.
APFT target price fair value RM0.67 by TA Securities.

I heard APFT plans to pay RM0.016 as dividend in this year.

What is APFT first day target listing price?
APFT PE ratio is not expensive, I think APFT may list slightly above the IPO price. But whether can buy to hold APFT for long term, very much depends on the growth.

What is APFT Growth prospect?
APFT is a flight education and training service provider, and has a vision to become one of the leading regional integrated aviation service providers.

APFT market share is about 37.8%. The Asia Pacific region has the greatest demand for passenger aircraft with projected delivery of more than 16,000 new aircrafts or 32% of new aircrafts delivery. This would spur demand for pilots – providing a boon for the Malaysian flight and training market, which indirectly will benefit APFT, according to TA Securities.

Furthermore, the outlook for the flight education and training market in Malaysia remains positive. The flight education and training market in Malaysia is expected to grow from its current size of RM129.4mn in 2010 to RM193mn in 2014 (CAGR of 10%). The growth will likely come from rising demand from major airlines in Malaysia (i.e. MAS and AirAsia). Besides, APFT is also expected to benefit from the growing aviation industry in Indonesia and India.

Not familiar with aviation industry. Up to individuals to decide.

More on APFT or recent IPO.

My blog link.



Buy Japanese Yen now?

For those who are doing Yen carry trade or those who short/sell Japanese Yen, better be careful now?

As we know, Japan was just hit by earthquake and Tsunami. The yen already gained the most since August 2010 against the US dollar.

In January 1995, the Japanese yen up about 20 percent versus the US dollar in three months after the 6.9 magnitude Kobe earthquake.

But why The Japanese yen will up after an earthquake?
One of the reasons is the insurance companies and investors will buy back yen to pay for damages. Government and private sector may start the rebuilding process. These will lead to massive repatriation of funds of Japanese currency from overseas back to Japan. Another reason is of course, due to currency speculation. Many speculator will now start to speculate and create news that the Japanese yen will grow stronger.

More on curry trade or forex, here.

My blog.


Sunday, March 13, 2011

PJBumi Share Price PE Ratio is only 3.1x. BUY?

Based on the latest PJBumi latest news in Bursa Malaysia, their earnings per share for year 2010 is RM0.0705.
Based on PJ Bumi share price of RM0.225, PJ Bumi PE ratio is only 3.1x, that is very very low.

For those who buy shares just base on PE ratio, then this is a good buy.

But as I have said in PEGGY Method, we need to look at other factors.
PE: PE ratio
G: Growth
G: Gearing
Y: Yield (dividend)

I don't have any PJBumi research analysis report.
I'm not sure about their growth rate for next few years. I think their earnings are quite volatile. Sometimes good sometimes bad.
I did not check on PJBumi gearing.
Based on the Bursa Malaysia announcement, there is no PJBumi dividend for year 2010.

Polite Market's Comment:
Whether to buy PJBumi or not, my opinion is we need to check their growth rate, gearing and dividend then only make a decision.

For those who just want to buy PJBumi without checking any info, up to individuals to make decision.

My blog.


Saturday, March 12, 2011

PChem Share Target Fair Value

Pchem share price has went up recently and those who are still holding since Pchem IPO make more money than those who just bought it and those who had sold immediately after the IPO.

One thing I don't really understand. Why so many retail investors like Pchem, but nobody like Petronas Dagangan share (petdag) or Petronas Gas share (PetGas). Maybe Pchem stock is new and later it may be like petdag or petgas. Or is it really Pchem stock is different and have very huge potential? But many who like Pchem stock, don't even know what is Pchem PE ratio and dividend yield. They will make general statement is Pchem is good, government controlled good, oil price up so PChem good, etc.

Another thing I also don't understand. Why Petronas Chemical share stock name is called PChem and not PetChem? The maximum character is seven, and can fit in PetChem. Her sisters are called PetDag and PetGas, wondering why Pchem stock is not called PetChem.

Ok, let us do a simple PEGGY Method evaluation on PetChem share. Ops sorry, it is called Pchem share.

PE: PE ratio
G: Growth
G: Gearing
Y: Yield (dividend)

Petronas Chemical share price is RM6.50.
Petronas chemical PE Ratio is 23.6x, very high.
Pchem grow at about 20% a year, good.
Pchem net gearing is manageable at 0.3x.
Pchem dividend yield is about 2.7%.  Not high, but one thing good is Pchem dividend payout ratio of 50%. As the profit grow, the dividend will grow.

Polite Market's Comment:
For government linked counters such as Pchem stock, they always trade at very high PE ratio. Based on what Pchem profit forecast, I don't think in near term you can make huge percentage gain from Pchem. What you will get is as long as the Pchem is growing, hopefully Pchem share price will continue to grow. At the same time, you also enjoy the dividend but not that much.

Pchem target price fair value RM7.26 OSK
RM7.50 Credit Suisse
RM8.00 Maybank
RM7.27 RHB
RM7.26 JP Morgan Chase
All Pchem recommendation is buy, except MIDF hold

Up to individuals to make decision.

More on Pchem stock.

My blog.


Friday, March 11, 2011

Fitters Share Price Volume Real or False? Or False Buyers?

I got a shock in July 2010. At that time I was looking at Fitters share. Fitters share got volume with both side buyers and sellers also queing at reasonable quantity. One day at 2.05pm, I took a look at Fitters shares, and I noticed that 95% of the buyers are gone.

I thought the system got problem. But all other counters are ok.

Then this is my conclusion:
1.Maybe the system really got problem and only Fitters shares are affected.
2.Maybe most of the buyers was late in carry forward the orders.
3.Maybe the buy orders is just being keyed-in by one remisier/dealer. He came back late from lunch and the orders were carried forward late.

After much thinking, I think it is number three. What do you think?

More info on Fitters share here…

My blog.




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