Tuesday, July 03, 2012

Censof- poised to test its downtrend line

Some readers complained that I liked to recommend stocks that had achieved a breakout and are no longer cheaper. You can never win in any argument why you should buy a stock after it had a breakout, even though it is more expensive instead of buying into a stock, even though it is cheap, and wait for a breakout which may never come. There is a saying that nothing succeed as as well as success and I like to stay with that.

However, I would track a stock for a long while and I would call a buy when it has achieved a breakout. Today, I would share with you one such stocks. It is Censof, a software company that sells extensively to government departments & agencies. It has plans to expand to Indonesia. It is not a hugely profitable company but it made decent profit (here). It has proposed a bonus issue of 1 free warrant for every 8 shares held, which may be the reason for a slight upticks in the share price over the past few days.

If it can break above the RM0.45, the stock would have an upside breakout above its intermediate downtrend line. Then it could be a good trading BUY. For those who have always wanted to buy early, here is your opportunity to do so- before a breakout.

Chart: Censof's daily chart as at July 3, 2012 (Source: Quickcharts)


Ethan Lee said...

Hi Alex,

Can you please comment about Hapseng? I saw Hapseng buy back its share frequently.

Thank you.

Chun Mun said...

Hi Alex,
How about spritzr, do you think this stock is good to enter as no much people is focusing on it yet?
Thank you

Mat Cendana said...

I'm going to kick myself - should have checked this blog earlier. It has added 1.5 sen today and I'm now undecided as to whether to buy or wait for it to drop a bit.

Alex Lu said...

Hi Ethan Lee

I have nothing to say about Hapseng. It is in an intermediate uptrend line, with support at RM1.65. Its immediate resistance is the horizontal line at RM1.80.

Alex Lu said...

Hi Chun Mun

Spritzer's earning has normalized after it dropped (due to higher operating expenses) following the start-up of the Shah Alam plant. For the 9-month ended 29/2/2012, its net profit was up (from RM7.8 mil to RM8.6 mil) and revenue was up (from RM105 mil to RM132 mil).

At RM0.805, Spritzer is now trading at a PE of 9.3 times (based on annualized EPS of 8.6 sen). This is quite reasonable for a consumer stock.

Chartwise, the RM0.80 support is quite strong. So, all-in-all, this is a good time to add to this stock.

Alex Lu said...
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