Sunday 30 September 2012
Thursday 27 September 2012
New longer term investing position (PCI Ltd)
First thing first... That Chippac flew to 45c and I missed everything from 36.5c to 45c :(.
The power of a bounce from the perspective of a monthly chart, is indeed strong.
Anyway, I bought some small investing position yesterday.
My counter of choice: PCI Ltd.
From SGX:
This counter caught my eye sometime ago, but it's illiquid and not easy to buy or sell large positions. The thing that attracted me to this was:
A) a proposed 3c dividends that are to be announced
B) 76.78% holding by Chuan Hup (another listed co)
C) Strong balance sheet and cash position
Based on 30th June 2012 full year results, it has about US$40m in cash (about US$0.20 per share).
Total assets is at US$ 137m with US$40m in Accounts Receivables and the US$40m cash.
Liabilities at US$52m (almost all are current account payable liabilities).
Shares available is close to 200m shares. (used for simplicity)
As seen above, balance sheet is healthy with all liabilities easily met. It has zero borrowings. NAV is at US$0.42 (about SGD 0.50). The current price is close to NAV.
I bought in 10lots at an average of 47c after commission. The 3c proposed dividends will give me a yield of 6.38%, which is decent.
I went on to look at Chuan Hup's balance sheet and once again, this is a cash rich profitable company with little debt. It has US$81m in cash as part of total assets of US$368m. The liabilities weigh in at US$64m (almost all are current). From where, we can see that they can easily pay out the liabilities with cash alone.
Why am I looking at Chuan Hup? Well since Chuan Hup already holds 76.78% of PCI and had been accumulating PCI shares slowly since they failed to takeover the company in 2011 with an offer of S$0.50. The shares in which Chuan Hup doesn't hold in PCI is about 50m.
Assuming that Chuan Hup comes in to offer again but at S$0.60 per share, it would only cost the S$30m (about US$25m from their US$81m). Not to PCI would be paying out S$0.03 dividends of which Chuan Hup will get about S$4.5m. Taking over PCI will give them access to the US$40m cash that PCI currently holds (before dividends and liabilities). This gives a good case for a takeover. It's been a year after the previous offer lapse (21 June 2011) and thus Chuan Hup is able to mount another offer if they so chooses.
Lets wait and see if they will attempt to do so again.
The power of a bounce from the perspective of a monthly chart, is indeed strong.
Anyway, I bought some small investing position yesterday.
My counter of choice: PCI Ltd.
From SGX:
Background
This counter caught my eye sometime ago, but it's illiquid and not easy to buy or sell large positions. The thing that attracted me to this was:
A) a proposed 3c dividends that are to be announced
B) 76.78% holding by Chuan Hup (another listed co)
C) Strong balance sheet and cash position
Based on 30th June 2012 full year results, it has about US$40m in cash (about US$0.20 per share).
Total assets is at US$ 137m with US$40m in Accounts Receivables and the US$40m cash.
Liabilities at US$52m (almost all are current account payable liabilities).
Shares available is close to 200m shares. (used for simplicity)
As seen above, balance sheet is healthy with all liabilities easily met. It has zero borrowings. NAV is at US$0.42 (about SGD 0.50). The current price is close to NAV.
I bought in 10lots at an average of 47c after commission. The 3c proposed dividends will give me a yield of 6.38%, which is decent.
I went on to look at Chuan Hup's balance sheet and once again, this is a cash rich profitable company with little debt. It has US$81m in cash as part of total assets of US$368m. The liabilities weigh in at US$64m (almost all are current). From where, we can see that they can easily pay out the liabilities with cash alone.
Why am I looking at Chuan Hup? Well since Chuan Hup already holds 76.78% of PCI and had been accumulating PCI shares slowly since they failed to takeover the company in 2011 with an offer of S$0.50. The shares in which Chuan Hup doesn't hold in PCI is about 50m.
Assuming that Chuan Hup comes in to offer again but at S$0.60 per share, it would only cost the S$30m (about US$25m from their US$81m). Not to PCI would be paying out S$0.03 dividends of which Chuan Hup will get about S$4.5m. Taking over PCI will give them access to the US$40m cash that PCI currently holds (before dividends and liabilities). This gives a good case for a takeover. It's been a year after the previous offer lapse (21 June 2011) and thus Chuan Hup is able to mount another offer if they so chooses.
Lets wait and see if they will attempt to do so again.
Friday 14 September 2012
Stats Chippac
I bought this counter on 29th August after I sold my Far East and forgot to blog about it. Today it moved to my surprise.
Above are the daily, weekly and monthly charts.
What prompted me to buy this stock was that it was still profitable, is about 80% owned by Temasek and near 2009 lows. I had seen the monthly chart that it was that low and a nice Bullish Divergence had formed. I was looking to be patient with this stock since it does show much potential for a strong reversal.
True enough, there was a strong high volume breakout today.
As can be seen by the daily, it blitz through 35c resistance of the daily 50MA as well as the highest high after the August selldown. Next resistance is 37c based in daily chart with 100MA around 38c.
From the weekly chart, we see that today's high of 36c coincides with 14ema for weekly. I generally use the zone between 14ema and 20ma as the long/short zone to bet on a continuation of the trend. As such, we are nearing serious resistance. The 20MA weekly is at 37.5c.. somewhere close to where we see resistance on daily. There's also a small bullish divergence on the MACD for weekly.
Now to the longer term investors, we can see the monthly chart has that tempting bullish divergence. The 14ema and 20ma for monthly are quite some distance away at 46.5c and 51.5c respectively...
Now I need to decide for myself, do I take profit around 37-38c or do I sit still based on the monthly charts...
Above are the daily, weekly and monthly charts.
What prompted me to buy this stock was that it was still profitable, is about 80% owned by Temasek and near 2009 lows. I had seen the monthly chart that it was that low and a nice Bullish Divergence had formed. I was looking to be patient with this stock since it does show much potential for a strong reversal.
True enough, there was a strong high volume breakout today.
As can be seen by the daily, it blitz through 35c resistance of the daily 50MA as well as the highest high after the August selldown. Next resistance is 37c based in daily chart with 100MA around 38c.
From the weekly chart, we see that today's high of 36c coincides with 14ema for weekly. I generally use the zone between 14ema and 20ma as the long/short zone to bet on a continuation of the trend. As such, we are nearing serious resistance. The 20MA weekly is at 37.5c.. somewhere close to where we see resistance on daily. There's also a small bullish divergence on the MACD for weekly.
Now to the longer term investors, we can see the monthly chart has that tempting bullish divergence. The 14ema and 20ma for monthly are quite some distance away at 46.5c and 51.5c respectively...
Now I need to decide for myself, do I take profit around 37-38c or do I sit still based on the monthly charts...
Monday 3 September 2012
Brief update on the month gone by
Not much action from me last month.
Made some $$ from the sale of Popular on Thursday before Jackson Hole. (Bought 22.5c and sold 23.5c)
I tried to queue to buy back at 23c but no luck getting any
Also managed to get some small lunch money from small short positions on CityDev and SembCorp (lasting about 1-2days on average).
I had managed to long Las Vegas Sands on 14th Aug, at $38.95 as I was sensing a move upwards. However, I got anxious and sold at $39.30 with small profit after commission. The stock eventually went up to as high as $43.87.. damn... :(
All part of the learning process I guess. Just shows I'm on the right track with my TA and I just gotta have more confidence in myself.
However, not all trades were rosy. I got impulsive when I heard ABR was giving 30c and went to hoot at a high of 98c matched at opening. I had tried to cancel my order before but I somehow entered the wrong password the first time around and when I was re-entering, my order was matched. Anyway, I have seen the financials of the company and believe it is strong just that there's no liquidity. Guess I'll be sitting on this for sometime.
Made some $$ from the sale of Popular on Thursday before Jackson Hole. (Bought 22.5c and sold 23.5c)
I tried to queue to buy back at 23c but no luck getting any
Also managed to get some small lunch money from small short positions on CityDev and SembCorp (lasting about 1-2days on average).
I had managed to long Las Vegas Sands on 14th Aug, at $38.95 as I was sensing a move upwards. However, I got anxious and sold at $39.30 with small profit after commission. The stock eventually went up to as high as $43.87.. damn... :(
All part of the learning process I guess. Just shows I'm on the right track with my TA and I just gotta have more confidence in myself.
However, not all trades were rosy. I got impulsive when I heard ABR was giving 30c and went to hoot at a high of 98c matched at opening. I had tried to cancel my order before but I somehow entered the wrong password the first time around and when I was re-entering, my order was matched. Anyway, I have seen the financials of the company and believe it is strong just that there's no liquidity. Guess I'll be sitting on this for sometime.
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