Tuesday, December 30, 2014

Year end Closing for 2014

A friend told me, he feel very hard to make money in stock market nowsaday, expecially recent market down trend, he was too worry and cut all his holding. Oh boy, for me, I would think his strategy is totally incorrect, sorry.

If you remember my previous post, I plan to buy Pchem and Maybank during this year end Mega Sales. It's time to buy when Market on sales. As per plan, last 2 weeks, I managed to collect Pchem when it's stock price below RM5, for the whole week, there were 3 to 4 days where one can collect it at RM4.70, RM4.60 and RM4.90.

For the case of Maybank, there are even longer period for the stock to stay below RM8.80. One can have a weeks time to collect it when the stock price close at RM8.60, RM8.30, RM8.40 and RM8.70.

At the time I write this post, Pchem is trading at RM5.40 whereas Maybank trading at RM9.18. You can make a handsome profit of 10% in a short period by selling the stocks now...again, it's all depend if want to take a quick profit or continue to hold it for dividend income. For me, I may consider to sell half of holding only if the price start to go south, anyway, the plan is for mid to long term, no need to hurry. Remember, life only happen once, but history of market cycle always repeat, if you miss this cycle, there are always another cycle waiting for you. Good Luck and Happy New Year!

Monday, December 8, 2014

Time to shop in stock market?

Today, there's a big title came out in one of the local news paper, "Maybank is consider to list subsidiary of Etiqa Insurance".

Who is Etiqa Insurance? Many years ago, I have no idea about this company too. One day, I came to know this company in Maybank2u website (http://www.maybank2u.com.my/) under the "Insurance" session. The product I bought was "eMotor Takaful". The main reason is, with this, I can renew my car insurance policy via Maybank2u online and it give extra 10% discount on top of normal insurance amount (NCD) and save a lot of time. They can even renew your road Tax and deliver to your home, if you want this extra service. When time come for renew next year, all you need to do is just a few clicks!

Another best part, they will distribute the "Surplus" to you if you meet their requirement, where I don't see happen for other insurance company. I have been received RM60 to RM80 for last few years since I renew my car insurance with them. I think that's why make them to be the number 1 takaful operator in Malaysia with market share of 46.2%.

For the last few weeks, we have experience a market correction for local Bursa Stock, the year end discount is coming to town! Maybank is one of the stock in my buying list in next few months if the stock price still below RM9.00. If Maybank finally go with plan to list Etiqa Insurance, investor can expect some form of bonus, be it some extra shares or inform of cash dividend.

If you have no idea how to start, my suggestion is go to renew your car insurance with Etiqa Insurance for the next renewal to enjoy the above benefit. At the same time, you may start invest into Maybank stock, become the owner to enjoy their dividend income every year, and when time come if they decide to list the insurance company, it maybe an extra income for investors. Many brokers are neutral to this news, but personally, I think 2 listed company are better than one in terms of capital appreciation for investors, similar to today's TM & Axiata, or Public Bank & LPI.  (at the time of writing, I do hold some shares in Maybank, the above is just my personal opinion, as I don't get any benefit in whatever form and of course, Maybank do not pay me anything for writing this article)

Related post:
1. Some snippets about Maybank
2. Dividend Reinvestment Plan

Thursday, December 4, 2014

I plan to go shopping - Pchem

Year end sales is coming... I plan to go shopping, this time, not in supermarket, but in stock market. Yes, our local stock market, Bursa index has been going south from 1880 point to 1750 points at time I write this blog.

The time finally come, money has been sitting in the bank for a while without doing anything. It's the time to make them work harder by accumulate some good stocks that will generate income. As per my plan, only blue chips will come in my buying list.

What is Blue Chips means? It's the industry leader with consistent profit record, good brand name and give consistent dividend/ bonus to investors. Further, the stock must be liquidate with big cap and revenue. This is important for fund manager like us, if not, it's quite hard to buy / sell.

The trigger points for this round of sell down was caused of the down trend of WTI price, which currently quote at USD70. Meaning Oil and Gas industry facing the huge damage now, most of their stocks price drop to record low. Further, the local currency, Ringgit, also weaken against USD. Base on these points, I want to look for a company that see it's stock price correction and at the same time it's a beneficial to weaken Ringgit.

After went through some companies, I think Petronas Chemical Group (Pchem, 5183) is one of the stock in my buying. For those who want to know who is Pchem, you may refer to my previous blog:
1. Petronas Chemicals Group Bhd - Part 1
2. Petronas Chemicals Group Bhd - Part 2

Four years ago, Pchem launched their IPO (Initial Public Offering) and I went to visit their company (a very big land with many building inside) and help their staffs to open CDS account. It was a great experience as I never seem to think the company is so big, overall they have 70 over factories across Malaysia. I still remembered, on day one, the stock price open at RM5.50, with the low of RM5.10, since then, the stock price never go south, it went all the way to record high of RM6.80 and being sell down recently till the current price of around RM5.30 to RM5.40.

Without the complicated calculation, just check Pchem's EPS, currently stand at 34 cents, compare to 32 cents during IPO time. The dividend was 20 cents last year, which come as 3.70% of DY at market price of RM5.40. They are in net cash position and the revenue is quoted in USD whereas 70% of cost is quoted in USD.

 Let's make it simple again, if you can buy a business with RM4.30B four years ago and today, someone going to sell you with almost the same price, don't you think it's a good deal? Just business and the asset park at the company, after four years, even I have no idea how to value it, but I know definitely the price must be higher than four years ago, with the company still generate the similar income/ profit.

p/s: Somebody ask me, what's the fair value to enter? Well, I will stick to my original pivot point RM4.90, or make it simple, when the price near RM5.