Chart 1: SPSetia-WB's daily chart as at Aug 18, 2010 (Source: Quickcharts)
The last time SPSetia-WB broke above the 40-week SMA line in w/e April 17, 2009, it coincided with a similar breakout in the mother share. SPSetia then rose from RM3.00 to RM4.60 over a period of 8-9 weeks. See Chart 2 & 3.
Chart 2: SPSetia-WB's weekly chart as at Aug 18, 2010 (Source: Quickcharts)
Chart 3: SPSetia's weekly chart as at Aug 18, 2010 (Source: Quickcharts)
Based on the bullish breakout, SPSetia-WB could be a trading BUY. A better alternative trading BUY could be the mother share, SPSetia.
Note: Based on yesterday's prices, SPSetia-WB is now trading at a premium of about 15%. Its main terms are exercise price of RM4.48; exercise ratio of 1-for-1; and, expiry date in Jan 2013.
15 comments:
hi Alex,
could you pls comment on the how to calculate the fair price for LPI rights?
Can see LPI price has strong momentum. Don't see similar momentum on KFC.
thanks
maxwealth88
Alex, how do you explain long dated warrants > 1000 days to expiry trading at a discount? Cheap financing for the company when warrants are conveted? Usually the discount is less than 5% which is less than borrowing csts. How do you play this profitably?
tks.
Dear Alex,
Appreciate if you could comment on MBMR at the current price of 3.30. Your views in May on mbmr proved correct. Does it still worth for entry at the current price for mid-long hold. Thanks.
Bro Alex,
Today TM breakout 3.54 and close at highest 3.58 before lunch. So now, where is the restistence level? Aren't 3.54 will be a support level right now?
Thx
I have some problem with TM's chart. My two charts from Quickcharts & Tradesignum differ. Relying on Tradesignum, I believe the recent high at RM3.55 could be the resistance.
Wednesday, August 18, 2010 5:21:00 PM
Hi Alex,
Nice write up on SPSetia. It seems to be on an uptrend in the next 1-3 months. RM5 seems achievable.
Hi Alex.
What is your view on Green Packet?
Another loss quarter, when likely can see the light.
AL
Hi MaxWealth88
I believe you've meant to ask about the theoretical ex-right value for LPI. LPI shareholders are entitled to a 1-for-2 bonus issue & 1-for-10 rights issue at RM7.00 each on the ex date of August 27. Assuming LPI closed at RM18.18 on that date, the theoretical ex-right value is RM11.80. The rights value is computed by subtracting RM7.00 from that the theoretical ex-right value. This gives a value of RM4.80 per right share.
It is hard to truly gauge the momentum of LPI or KFC as the level of participation is very thin. It is a sign of the level of complacency in the market that stocks can rise so easily on such thin volume.
Hi Geoff
You made a good observation. I believe this phenomenon happens because the level of participation in the market is not widespread. The present of such "mispricing" is also a sign that the market is almost fully valued or even nearing a top.
Hi Layman
I think MBMR can still go a bit higher, possibly testing the horizontal resistance at RM3.50. At that point, you may want to take some profit.
Hi Ivan
I think TM has surpassed its recent high of RM3.55. It closed at RM3.57 today.
However, this is a tricky part because it must stay above the RM3.55 & hopefully it would then continue to rise. TM could be a trading BUY now but it could turn south very quickly. After it has held onto this level for a while & proceed to go higher, would you say that it's smooth sailing. If you want to get into the stock now, do so timidly. Don't be overly aggressive.
Hi Ai Ling
I will look into Green Packet when I have the time. I may put up an update on this stock. Its results is nothing to shout about- the usual huge losses which was expected. One should bear in mind that the company must be doing something right as it managed to rope in a new major Korean shareholder a few months back.
Dear Alex,
How do you see Panamy? Hardly find any research paper on it. Can you suggest a 3-12 month's TP?
Thanks!
Hi steve
Panamy is an excellent company. If I'm mistaken the company's fortune turned positive after it ceased assembling some electrical appliances & began sourcing from a neighboring country. Over the past 14 quarters, its turnover increased from RM116 million to RM205 million while net profit increased from RM12 million to RM19 million. The stock is now trading at a trailing PER of 16.4 times while its dividend yield is about a respectable 6.1%.
With its steady growth track record, one may assign a higher PER of 18 times for this stock. At that multiple, Panamy's target price is about RM21.24.
The stock has risen quite significantly from RM13 in July 2009 to the current price of RM19.70. You may want to buy on pullback to the horizontal line of RM17.00.
For more, check out my earlier post: http://nexttrade.blogspot.com/2009/08/panamy-could-be-trading-buy.html
Hi Alex,
Thanks for sharing on TM. I adi in TM-CW , better take profit 1st before it pullback. Anyhow, I am +ve on TM, but scare . .. so . .
Hi Alex,
Any comments about spsetia-wb currently? Thank you.
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