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Monday, March 27, 2017

Technical Analysis Can Be Useful!

Last night, I'd spotted the breakdown of the accelerated uptrend line by Annjoo (at RM2.55). I saved up the chart and sent it off to my clients. Those who were quick enough to sell off this morning, can look forward to buying back at the support at RM2.15, RM2.00 or RM1.85.


Chart: Annjoo's daily chart as at Mar 24, 2017 (Source: Kenanga)

This post serves to make the point that we all should learn about technical analysis. You just can't leave technical analysis to your remisier who happened to look at the chart of your stocks. Technical analysis is fairly easy to learn. You can start off with the Basics of Technical Analysis by Investopedia and then move on to Chart School by Stockcharts.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

TIME TO INVEST IN THE MARKET

If you have been following this blog on and off, you could have invested in the market 5-6 months ago. I have been sounding out the case for a buy for quite a while. For example, I made this comment in October last year:
Everyday I hear my fellow remisiers and investors bemoan the sad state of our stock market. Who can blame them since our stock market has been drifting lower for the past 3 years! Today, I'm going to make a case that our market could have made a bottom and we could see the start of the recovery by the end of the year.
Today, the Edge Daily has a very good infographic on why and how you should invest in the stock market. It is very good information which I shall shamelessly copy & paste it here. If you are still not invested in the market, it's not too late to do so. You can follow the advice given by investing in the broad market. For example, you can invest in the top 30 stocks by buying FBMKLCI-EA or invest in the top companies in ASEAN by buying CIMBA40.



 



The last infographic is a gentle reminder to all investors - even speculators - to choose slow and steady return over fast and furious profit. You will do well to avoid exciting stocks that promise quick profit and tipsters with the next hot stock to will make you a fortune.

Good luck to your investment!!

Superln: Earnings Continue To Grow

Result Update

In QE31/1/2017, Superln's net profit rose by % q-o-q or 45% y-o-y to RM6.2 million while its revenue rose by 16% q-o-q or 15% y-o-y to RM25.8 million. Revenue rose q-o-q mainly due to increase in export sales volume. PBT rose to RM8.0 million from RM6.3 million in the preceding quarter due to higher revenue & profit margin (from 28.4% to 30.9%) 


Table: Superln's last 8 quarters' results


Graph: Superln's last 16 quarters' results

Valuation

Superln (closed at RM2.70 last Friday) is now trading at a trailing PER of 10x (based on last 4 quarters' EPS of 26.52 sen). Based on an earning CAGR of 70%, Superln's PEG ratio is only 0.14x. Thus Superln is deemed very attractive for a growth stock.

Technical Outlook

Superlnis in an uptrend line. Last Friday, it tested the line connecting its recent peaks at RM2.70. This week may see the share price breaking thru this resistance. If that were to happen, we may see an acceleration in the uptrend for Superln.


Chart 1: Superln's weekly chart as at Mar 24, 2017 (Source: Shareinvestor.com)


Chart 2: Superln's monthly chart as at Mar 24, 2017 (Source: Shareinvestor.com)

Conclusion

Based on good financial performance, fairly attractive valuation & positive technical outlook, Superln could be a good stock for trading BUY.long-term investment.
Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Astino: Earning Soared

Recent Financial Results

In QE31/1/2017, Astino's net profit rose by 117% q-o-q or 75% y-o-y to RM12 million while its revenue rose by 18% q-o-q or 12% y-o-y to RM134 million. Revenue rose q-o-q primarily due to increase in overseas market demand and the selling price. PBT rose q-o-q mainly due to increase in sales and profit margin. [FYI, Astino is involved in the manufacture & sale of metal roof sheets & other building related products. I posted on this stock 10 years ago. (here)]


Table: Astino's last 8 quarters' results


Graph: Astino's last 39 quarters' results

Financial Position

Astino's financial position as at 31/1/2017 is deemed healthy with current ratio at 3.1x and gearing ratio at 0.3x.

Valuation

Astino (closed at RM0.75 last Friday) is now trading at a trailing PER of 5.7x (based on last 4 quarters' EPS of 13.16 sen). At this PER, Astino is deemed fairly attractive.

Technical Outlook

Astino has tested its long-term uptrend line at RM0.70. If it can break above its intermediate downtrend line at RM0.80, it may continue with its prior uptrend.


Chart: Astino's monthly chart as at Mar 24, 2017(Source: Shareinvestor.com)

Conclusion

Based on good financial performance, attractive valuation & mildly bullish technical outlook, Superln could be a good stock for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

AEONCR: Investors Rattled By Rights Issue?

Technical Update

Last Friday, AEONCR swung from a high of RM17.20 to a low of RM15.70 after it announced the proposal for a Bonus Issue of 1-for-2 plus a Rights Issue of ICULs of 2-for-1 (which may be revised to 3-for-1 in the event the bonus issue is terminated). Was the proposed Bonus & Rights Issues the reason for the sharp swing in the share price? Should we be concerned about the proposed Rights Issue? For more on the proposal Bonus & Rights Issue, go here.


Chart 1: AEONCR's intra-day chart as at Mar 24, 2017 (Source: Shareinvestor.com)

The daily chart shows that the share price is now at the intermediate uptrend line support at RM15.80.


Chart 2: AEONCR's daily chart as at Mar 24, 2017 (Source: Shareinvestor.com)

The sharp drop was preceded by a sharp rally that pushed the share price above the line connecting the peaks for the past 5 years!!


Chart 3: AEONCR's monthly chart as at Mar 24, 2017 (Source: Shareinvestor.com) 

Recent Financial Performance

For QE30/11/2016, AEONCR's net profit rose 21% q-o-q or 26% y-o-y to RM67 million while revenue rose 4% q-o-q or 14% y-o-y to RM280 million. PBT rose 24% q-o-q mainly attributable to higher operating income and lower allowance for impairment losses on receivables in the current quarter. (Note: The quarterly result was announced on December 22 last year.)


Table: AEONCR's last 8 quarterly results


Graph: AEONCR's last 38 quarterly results

Financial Position

As at 30/11/2016, AEONCR's financial position is deemed satisfactory, with adequate current ratio of 2.2x while gearing ratio maybe on the elevated side at 5.1x. The gearing ratio is definitely higher than RCECap's gearing ratio of 2.9x as at 31/12/2016. I believe the purpose of the Rights Issue of ICULs is to address investors/bankers' concern. It shall raise RM432 million for the company and in the process, bringing down the gearing ratio to 3.7x. 
 
Valuation

AEONCR (closed at RM15.98 last Friday) is now trading at a trailing PE of 9.6 times (based on last 4 quarters' EPS of 166 sen). At this PER, AEONCR is deemed fairly attractive. In addition, it pays dividend totaling 60.10 sen in the past 4 quarters; translating to a DY of 3.8%.

Conclusion

Based on satisfactory financial performance, fairly attractive valuation and positive technical outlook, AEONCR is a good stock for long-term investment. The present price weakness may present an opportunity to gain entry into this stock.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Wednesday, March 22, 2017

KLSE Screener: A Useful Screener For Identifying Your Next Investment

Most investors don't have time to look at the stock market every day, let alone every hour. They don't have time to compile 8-quarter or 10-year P&L spreadsheets. One of the easiest ways to narrow down the stocks to study is to use screeners or filters. Recently I stumbled upon KLSE Screener, which I find to be very easy to use. I have included it in my Resources.

I will give you 2 examples of how you can screen for stocks. If you are interested in banking stocks, you need to select Main Market & Finance and then key in the parameters. For this example, I have set the following parameters: PE between 8x & 12x; ROE > 8%; DY > 2%; and PTBV < 1x. This is what you will get.



If you want to invest in construction stocks that have been a profit track record of more than 5 years plus 2 parameters - PE between 8x & 15x and DY > 2% - you will get these 3 names.



Finally, the more aggressive players can also try out the warrant screener!! This saves you a lot of hassle to find out the warrant profile from BURSA MALAYSIA. Imagine if you want to punt on Airasia call warrants; you select Airasia & CALL and set your parameters (minimum of 100 days & premium < 20% for example). You will get this. 



KLSE Screener also provides market updates, latest entitlements and quarterly results. Check out KLSE Screener today! 

Beware of "Pump & Dump" Scheme

This morning we received an industry communication letter from BURSA MALAYSIA about the manipulative activities known as "Pump & Dump" scheme. The same warning has also appeared in The Star (here).

This scheme is the updated version of stock tips that you used to get from your friends or colleagues or brother-in-law years ago. You are your only safeguard. If you find the "news" to be too good to be true, then chances are it is not true. However if you feel that the news is a good opportunity, you must do one of two things:
1) If it is a tip about a big project, verify the source of the tip.
2) If it is a case about a big jump in profit, verify the thesis of investment.
In nexttrade, I do not peddle tips; only logical investment thesis or market observations.

Finally, you must exercise caution not to invest all your money in one or two investment ideas. Always diversify your investment so that you can take a hit even after all your careful study or investigation.


Monday, March 20, 2017

Market Outlook as at March 20, 2017

At 4:30pm, volume traded in the overall market was 5.6 billion units. FBMKLCI, FBM70 & FBMSCAP were traded at 1747, 14388 and 16832. As you can see from the charts below, FBMKLCI is testing its resistance from the horizontal line at 1750; FNM70 is testing the line connecting its recent peaks at 14400; and, FBMSCAP is approaching its resistance from the horizontal line at 17100.

When you see two days of  huge volume (5 billion units traded today & last Friday) and the funny stocks starting to rally, you can be sure that the innocent & greedy ones are all loading on stocks in the market. The first meaningful correction is not far away. If you have good profit, this is the time to pocket some. Good luck!!


Chart 1: FBMKLCI's monthly & weekly chart as at Mar 20, 2017_4.00pm (Source: Shareinvestor.com)


Chart 2: FBM70's monthly & weekly chart as at Mar 20, 2017_4.00pm (Source: Shareinvestor.com) 


Chart 3: FBMSCAP's monthly & weekly chart as at Mar 20, 2017_4.00pm (Source: Shareinvestor.com) 

Friday, March 17, 2017

CPO Found Its Footing

CPO appears to have found a bottom - maybe just a temporary bottom - at RM2780 and is now rebounding.


Chart 1: CPO (MYR) daily chart as at Mar 16, 2017 (Source: ifs.marketcenter.com)

CPO (in USD) reflects the same technical picture.



Chart 2: CPO (USD) daily chart as at Mar 16, 2017 (Source: Investing.com)

The recovery in CPO prices could be the catalyst for a play for plantation as better prices coupled with improved FFB output should drive earning higher.

Topglov: Earnings Improved Sequentially


Results Update

For QE28/2/2017, Topglov's net profit rose 13% q-o-q but dropped 21% y-o-y to RM83 million while revenue rose 8% q-o-q or 23% y-o-y to RM852 million. Revenue  rose q-o-q due to upward price revisions. Despite less favorable conditions (arising from higher raw material prices and a competitive environment), profits rose q-o-q due to improvements adopted across the manufacturing process.

 
Table: Topglov's last 8 quarterly results


Graph: Topglov's last 43 quarterly results

Valuation

Topglov (closed at RM5.20 yesterday) is now trading at a trailing PE of 22.9X (based on last 4 quarters' EPS of 22.71 sen). At this PER, Topglov is deemed fully valued.

Technical Outlook

Topglov is resting on its intermediate uptrend line, SS at RM5.20. Its immediate resistance comes from the horizontal line at RM5.35.
 
 
Chart 1: Topglov's weekly chart as at as at Mar 16, 2017 (Source: ShareInvestor.com)

The longer term chart shows a stock with a strong uptrend until 2008. Thereafter its uptrend moderated until recently. Despite an upside breakout in late 2015, the rally was short-lived. It was driven by a jump in earning that didn't sustain and excitement over the dual listing on SGX. Can Topglov "make used" of this breakout? We will have to wait & see.
 

Chart 2: Topglov's monthly chart as at as at Mar 16, 2017 (Source: ShareInvestor.com)

Conclusion

Despite satisfactory financial performance, Topglov's full valuation & unexciting technical outlook rendered the stock as a HOLD

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Magni: Earning Growth Slowed


Results Update

For QE31/1/2017, Magni's net profit rose 3.6% q-o-q or 13.4% y-o-y to RM29.6 million while revenue rose 3.3% q-o-q or 7.5% y-o-y to RM289 million. Revenue increased q-o-q due to 3.7%-increase in Garment revenue as a result of favorable foreign exchange rate but was partially weighed down by lower sale orders received and 0.4%-increase in Packaging revenue as a result of higher sale orders received. PBT increased q-o-q due to higher PBT for Garment PBT of 14.2% mainly due to higher revenue and higher foreign exchange gain (Other operating income) which was partially offset by a 158.5%-drop in packaging PBT mainly due to the provision of SIPP's closure costs of RM2.877 million. Had there been no provision for the closure costs, packaging PBT would have been higher by 18.6% versus the preceding quarter mainly due to better productivity, aided by a slight increase in revenue.

Table: Magni's last 8 quarterly results


Graph: Magni's last 32 quarterly results

Valuation

Magni (trading at RM5.16 yesterday) has a trailing PE of 8.4 times (based on last 4 quarters' EPS of 61.73 sen). Its last 2 years' earning CAGR was at 50%; giving the stock a PEG ratio of less than 0.2x. At this PEG ratio, Magni's valuation is still very attractive. 

Technical Outlook

Magni is in a long-term uptrend. The stock broke above the January 2016 high of RM4.60; signaling the continuation of the long-term uptrend.


Chart 1: Magni's monthly chart as at Mar 16, 2017 (Source: ShareInvestor.com)


Chart 2: Magni's weekly chart as at Mar 16, 2017 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, attractive valuation and bullish technical outlook, Magni remains a very good stock for long-term investment. 

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Thursday, March 16, 2017

Gamuda: Next Upleg Could Be Starting Now

Gamuda broke above its recent high of RM5.06-5.07 to touch an intra-day high of RM5.17. This reaffirm the earlier hesitant breakout of the psychological RM5.00 mark and could well signal the continuation of Gamuda's prior uptrend.

Based on a 1-to-1 extension of the August 2016 retracement of RM1.50 (computed by deducting the low of RM3.50 from the preceding high of RM5.00), the target for this upleg would be RM6.50 (by adding RM1.50 to the breakout level of RM5.00).


Chart 1: Gamuda's daily chart as at Mar 16, 2017 (Source: MalaysiaStock.Biz)


Chart 2: Gamuda's weekly chart as at Mar 16, 2017 (Source: MalaysiaStock.Biz)

The breakout in Gamuda share price is also reflected in the breakout of the intermediate downtredn line for Gamuda-WE at RM1.29-1.30.


Chart 3: Gamuda-WE's daily chart as at Mar 16, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Based on the above technical breakout, both Gamuda & Gamuda-WE could be good trading BUYs.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

BJFood: Earnings Still Weak

Results Update

For QE31/1/2017, BJFood's net profit dropped by 7% q-o-q or 37% y-o-y to RM4.7 million while revenue rose 10% q-o-q or 11% y-o-y to RM164 million. Revenue & PBT rose q-o-q mainly due to higher contribution from Starbucks operations in Malaysia. PAT however dropped due to disproportionate tax charge for the current quarter as a result of certain expenses or losses being disallowed for tax purposes, different foreign tax rate as well as non-availability of Group tax relief in respect of losses incurred by certain subsidiary companies.


Table: BJFood's last 8 quarterly results
 

Graph: BJFood's last 29 quarterly results 
 
Valuation

BJFood (closed at RM1.86 yesterday) is now trading at a PE of 38 times (based on last 4 quarters' EPS of 4.96 sen. At this PER, BJFood is deemed overvalued.

Technical Outlook

As posted earlier, BJFood broke above its intermediate downtrend line at RM1.80. This breakout may be the prelude to the next upleg for the stock.


Chart 1: BJFood's monthly chart as at Mar 15, 2017 (Source: ShareInvestor.com)


Chart 2: BJFood's daily chart as at Mar 15, 2017 (Source: ShareInvestor.com)
 
Conclusion

Based on weak financial performance & demanding valuation, I would maintain BJFood as a HOLD due to the bullish breakout of the downtrend line.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

SCGM: Earning Growth Stagnated

Results Update

In QE31/1/2017, SCGM's net profit was mixed- rose 29% q-o-q but dropped 1% y-o-y to RM7.0 million while revenue rose 9% q-o-q or 23% y-o-y to RM46 million. Revenue increased q-o-q and y-o-y due to increased sales demand from both local and export customers. PBT rose q-o-q due to increase in gain on foreign exchange and interest income but it dropped y-o-y due to higher cost of production attributed by increase in resin price, higher depreciation of property, plant and equipment, higher consumption of electricity power and packing materials.

 
Table: SCGM's last 8 quarterly results

 
Graph: SCGM's last 32 quarterly results

Valuation

SCGM (closed at RM3.82 yesterday) is now trading at a PE of 23X (based on last 4 quarters' EPS of 16.20 sen). With earning growth stagnating, the high PER is not easy to justify. Going forward, SCGM anticipates more states will follow in the footsteps of Selangor to ban the use of polystyrene lunch boxes and this should lead to a huge demand for the products of the company.

Technical Outlook

SCGM is in a long-term uptrend, supported by its 10-month SMA line at RM3.40 (see Chart 1). Last 2 weeks, SCGM broke above June 2016 high of RM3.65. This may signal the continuation of the prior uptrend.


Chart 1: SCGM's monthly chart as at Mar 15, 2017 (Source: ShareInvestor.com)


Chart 2: SCGM's daily chart as at Mar 15, 2017 (Source: ShareInvestor.com)

Conclusion

Despite the demanding valuation, I revised my previous rating from HOLD to a Trading BUY based on satisfactory financial performance, promising prospect and bullish technical outlook.

Note:
 
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Tuesday, March 14, 2017

WTIC: Possible Temporary Bottom Formed

Crude oil prices have been dropping in the last few days. It closed at USD48.40 yesterday, just a dollar shy off  its intermediate uptrend line, SS. With the sighting of a hammer, there is a good chance the bottom -at least a temporary one - is near.

  
Chart 1: WTIC's daily chart as at Mar 13, 2017 (Source: Stockcharts.com)

 Many of our O&G stocks dropped quite drastically in the past few days- mirroring the fall in crude oil prices. My favorite, SKPetro even broke uptrend line. It tested the support from the horizontal line at RM1.75.


Chart 2: SKPetro's daily chart as at Mar 13, 2017 (Source: MalaysiaStock.biz)
 
Hibiscus, the smallish O&G stock, dropped back to its uptrend line, SS at RM0.40. 


Chart 3: Hibiscus's daily chart as at Mar 13, 2017 (Source: MalaysiaStock.biz)

If WTIC can stage a recovery next few days, our beaten down O&G stocks could be attractive buys today.

For those who are curious about the outlook of CPO, my chart (CPO prices in USD) tells me that we are likely to see further weakness next few weeks and a test of the support at USD500 before recovery set in.


Chart 4: CPO's weekly chart as at Mar 13, 2017 (Source: Investing.com)

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Monday, March 13, 2017

BJFood: Crossed Its Intermediate Downtrend Line

Technical Outlook
 

BJFood has broken above its intermediate downtrend line, RR at RM1.80. If the stock can stay above the breakout level, the next upleg may soon begin. Note that MACD is now above the zero line and +DMI is above -DMI (indicating possible uptrend).


Chart 1:BJFood's weekly chart as at Mar 10, 2017 (Source: MalaysiaStock.biz)


Chart 2: BJFood's monthly chart as at Mar 10, 2017 (Source: MalaysiaStock.biz) 

Recent Results

The latest available result for BJFood is for QE31/10/2016, where its net profit rose 1% q-o-q but dropped by 19% y-o-y to RM5 million while revenue rose 5% q-o-q or 10% y-o-y to RM149 million.

Revenue and pre-tax profit increased slightly mainly due to higher contribution from Starbucks operations in Malaysia. Despite facing headwinds from a weak MYR & poor consumer sentiment, BJFood "expects Starbucks to maintain its revenue growth momentum, especially with its new fast moving consumer goods business, and this will contribute positively to the operating results of the Group going forward." 



Table: BJFood's last 8 quarterly results


Graph: BJFood's last 28 quarterly results (Note: The sharp spike in earnings was due to the extraordinary gain of RM158.6 million recorded in QE31/10/2014) 

Valuation

BJFood (closed at RM1.96 last Friday) is now trading at a PE of 35 times (based on last 4 quarters' EPS of 5.68 sen. At this PER,  BJFood is deemed overvalued.

Conclusion

Based on improving financial performance & mildly positive technical outlook, BJFood' rating is now revised from a SELL to a HOLD.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.