Kossan 4Q net profit up 21.4pct to RM29.45m on better product mix, margin

Kossan 4Q net profit up 21.4pct to RM29.45m on better product mix, margin
Written by Surin Murugiah of theedgemalaysia.com
Wednesday, 23 February 2011 20:51


KUALA LUMPUR: KOSSAN RUBBER INDUSTRIES BHD [] net profit for the fourth quarter ended Dec 31, 2010 rose 21.4% to RM29.45 million from RM24.25 million a year ago, driven by the expansion in the company’s gloves division with better product mix and margin.

It said on Wednesday, Feb 23 revenue rose 11% to RM252.97 million from RM227.75 million. Earnings per share were 9.18 sen while net assets per share was RM1.40.

For the financial year ended Dec 31, 2010, Kossan’s net profit recorded an increase of 76.1% to RM118.59 million from RM67.33 million a year ago. Revenue rose 24.6% to RM1.05 billion from RM842.14 million.

Kossan said the results for 2010 were within expectations. “For the year, demand for gloves remains good and management is cautiously optimistic of consistent performance in the financial year of 2011,” it said.

HLFG 4Q earnings surge 437pct to RM787m, also aided by one-off gains

HLFG 4Q earnings surge 437pct to RM787m, also aided by one-off gains
Written by Joseph Chin of theedgemalaysia.com
Wednesday, 23 February 2011 21:38


KUALA LUMPUR: The HONG LEONG FINANCIAL GROUP BHD [] (HLFG) posted net profit of RM787 million in the fourth quarter ended Dec 31, 2010, which was a 437% increase from the RM146.38 million a year ago.

The financial services group said on Wednesday, Feb 23 the higher profit was mainly due to a one-off gain on the transfer of HLA general business to MSIG Insurance (Malaysia) Bhd (MSIM) of RM619 million.

“Backing off this one-off gain, HLFG would still record an increase of profit by RM90.1 million (up 29.9%) mainly from better performances by all divisions,” it said.

HLFG said revenue rose 134% to RM1.3 billion from RM554.25 million while earnings per share were 76 sen compared with 14.10 sen.

It said the commercial banking division recorded pre-tax profit of RM359.7 million versus RM291.3 million a year ago, mainly due to higher net interest income and higher share of results from its equity stake in Bank of Chengdu.

As for the investment banking, the division recorded pre-tax profit of RM19.4 million compared to RM4.3 million a year ago.

Its insurance division recorded pre-tax profit of RM650.7 million compared to RM16.3 million a year ago.

HLFG said excluding the one-off gain on transfer of HLA General business to MSIM, the insurance division would still record an increase in profit of RM15.4 million, mainly due to the share of profit for the 30% associate stake in MSIM.

For FY10, net profit surged past the RM1 billion mark to RM1.112 billion, up 266% from RM303.97 million in FY09. Its revenue was RM2.073 billion compared to the RM1.116 billion in FY09.

“The higher profit was mainly due to a one-off gain on the transfer of HLA General business to MSIM of RM619 million. Backing off this one-off gain, HLFG would still record an increase of profit by RM90.1 million (up 29.9%) mainly from better performances by all divisions.

For the financial year, the pre-tax profit increased by RM913.6 million to RM1.517 billion from RM604.1 million, up RM913.6 million. The factors were due to a surplus transfer of RM175 million from HLA Life division and a RM619 million one-time gain on transfer of HLA General’s business to MSIM.

Backing off the one-time gain and one-time surplus transfer from Life, the group pre-tax profit was 19.8% higher at RM723.7 million.

The commercial banking division recorded pretax profit of RM677.1 million compared to RM580.1 million in FY09 due to higher net interest income and higher share of results from its stake in the Bank of Chengdu.

Genting Bhd 4Q earnings up 89.6pct to RM465.43m, for FY10 RM2.2b

Genting Bhd 4Q earnings up 89.6pct to RM465.43m, for FY10 RM2.2b
Written by Joseph Chin of theedgemalaysia.com
Wednesday, 23 February 2011 19:17


KUALA LUMPUR: GENTING BHD []’s net profit surged 89.6% to RM465.43 million in the fourth quarter ended Dec 31, 2010 from RM245.4 million a year ago.

It said on Feb 23 revenue rose 76% to RM4.086 billion from RM2.320 billion. Earnings per share were 12.57 sen compared with 6.64 sen while it proposed a final dividend of 4.5 sen compared with 4.20 sen a year ago.

It said the higher revenue was mainly from the leisure and hospitality division with the commencement of operations of Resorts World Sentosa in Singapore, during the first quarter of 2010.

“Revenue from Resorts World Genting in Malaysia increased mainly due to better luck factor in the premium players business. The revenue from the UK casino operations decreased mainly due to poor luck factor and the weaker sterling pound. However, the UK business volume has shown improvement over the previous year’s corresponding quarter,” it said.

Genting said the PLANTATION [] division benefited from higher palm products prices. However, its power division recorded lower revenue due to lower generation of electricity by the Kuala Langat and the Meizhou Wan power plants.

“The higher adjusted EBITDA from the Leisure & Hospitality Division in 4Q2010 was mainly attributable to RWS. RWG’s adjusted EBITDA increased due to higher revenue, whilst the UK casinos’ adjusted EBITDA was affected by lower revenue,” it said.

As for FY10, its earnings rose 110.9% to RM2.202 billion from RM1.044 billion while revenue surged 71% to RM15.194 billion from RM8.893 billion.

Group revenue rose by 71% to record a new high of RM15.19 billion in FY2010 (FY2009: RM8.89 billion), while group profit before tax rose by 74% to post a new high of RM4.39 billion in FY2010 (FY2009: RM2.53 billion).

Group adjusted EBITDA rose by 89% to post a new high of RM7.11 billion in FY2010 (FY2009: RM3.77 billion).

Genting M'sia raised to ‘buy’ at Maybank

Genting Malaysia Bhd, a casino and hotel operator, was raised to “buy” from “sell” at Maybank Investment Bank Bhd to reflect its resilient operations and growth prospects.

The share price estimate was increased to RM3.67 from RM2.90 , Wong Chew Hann, an analyst at Maybank, wrote in a report today. - Bloomberg

Read more: Genting M'sia raised to ‘buy’ at Maybank http://www.btimes.com.my/Current_News/BTIMES/articles/20110224095917/Article/index_html#ixzz1ErtyFuhU

DiGi hits record high

DiGi.Com Bhd, a Malaysian mobile- phone operator, rose to a record after UOB-Kay Hian Holdings Ltd recommended buying the stock because of its “high” dividends and “defensive” qualities amid the Middle East turmoil.

The stock climbed 2.6 per cent to RM26.64 at 12:06 pm local time, set to close at an all-time high, compared with the benchmark FTSE Bursa Malaysia KLCI Index’s 0.1 per cent decline. DiGi.Com is the biggest gainer on the gauge today.

“Telecommunications stocks stand out for their high dividend yields backed by stable cashflows, and our top telco pick is DiGi,” Vincent Khoo, an analyst at UOB-Kay Hian, wrote in a report today. “Stay relatively defensive until the Middle East issue boils over.”

Digi.Com, which has gained 8.5 per cent this year, has a dividend yield of 6.14 per cent, compared with the average of 3.4 per cent for the 30 companies in the benchmark index, according to data compiled by Bloomberg. DiGi.Com and PLUS Expressways Bhd. are among stocks investors should buy as Middle East violence boosts global equity risk premiums and oil prices, Khoo said.

Oil advanced for a sixth day in New York after reaching US$100 a barrel as Libya’s violent uprising cut shipments from Africa’s third-biggest producer.

The fighting in Libya, which holds Africa’s largest oil reserves, is the most violent yet seen in six weeks of popular uprisings across the Middle East and North Africa, which have already unseated longtime rulers in Tunisia and Egypt.

Commodity and energy-linked sectors such as palm oil and oil and gas companies are also “obvious beneficiaries” of higher oil prices while potential losers are AirAsia Bhd and Tenaga Nasional Bhd, Khoo said. - Bloomberg

Read more: DiGi hits record high http://www.btimes.com.my/Current_News/BTIMES/articles/20110224113201/Article/index_html#ixzz1ErtMy0fj

Hong Leong Bank Q2 net climbs 30pc

HONG Leong Bank Bhd (5819)said its second quarter net profit jump 30 per cent as it made more money in all key businesses.

Net profit for the quarter to December 31 2010 was RM291.4 million compared with RM224.7 million in the same quarter a year ago.

In a statement yesterday, the lender said revenue also rose to RM603.9 million from RM519.4 million before.

This was aided by lending out of its Singapore branch, profit contributions from global markets, the treasury division and Islamic banking arm and loan growth in the auto, property and small and medium sized enterprises.

Group managing director and chief executive Yvonne Chia said on a pre-tax profit basis the quarter's RM360 million profit marks the strongest quarter in the past five financial years.

"We are satisfied that the underlying operations are sound to strongly support the growth opportunities and the bank's track record of sustainably creating shareholder value remains firm, with return on average shareholder funds at 16.4 per cent and annualised earnings per share at 75.5 sen".

The bank has a loan to deposit ratio of 68 per cent, which means it has room to continue growing its loans.

Chia remains optimistic of prospects due to the rebound in economic activities.

For the first six months to December 2010, the lending portfolio for the purchase of residential properties grew 16 per cent while for the purchase of non-residential properties saw an expansion of 15 per cent.

Hong Leong Islamic Bank Bhd, the group's wholly-owned subsidiary, contributed 7 per cent of the Group's pre-tax profits in the first half of the financial year.

Profits from the group's 20 per cent shareholding in Bank of Chengdu Co Ltd. grew 41 per cent year-on-year to RM81 million for the six-month period.

Read more: Hong Leong Bank Q2 net climbs 30pc http://www.btimes.com.my/Current_News/BTIMES/articles/HONRES/Article/#ixzz1ErsFndVQ

Wilmar results miss forecasts

SINGAPORE: Wilmar International, the world's largest palm oil plantation firm by market value, reported a 28 per cent decline in quarterly earnings on losses from it oilseeds and grains units, missing forecasts and knocking its shares down 5 per cent.

Wilmar, which earns more than half of its revenue from China, said it is optimistic about the outlook for 2011, with commodity prices expected to remain firm. Still, analysts say the company faces huge pressure on its margins from rising food prices that have pushed up its feed stock costs, while price caps in China are preventing it from passing on increases to customers.

Wilmar shares fell as much as 5 percent to S$5.14 (S$1 = RM2.39), its lowest since mid-2009. Shares of Wilmar were 4.4 per cent lower at S$5.17 at 0730 GMT. They have lost about 8 per cent since the start of the year.

"The numbers are significantly below consensus and our forecasts. The sole factor to that is two consecutive quarterly losses in their oilseeds and grains division," said a Singapore-based analyst, who declined to be identified because he is not authorised to speak to the media.

"The way the company blamed this on weak margins and inopportune buying is kind of a euphemism for 'we got it wrong'."

Wilmar's palm oil plantations in Indonesia and Malaysia supply less than 10 per cent of the demand of its refineries, while logistical and regulatory challenges prevent the company from expanding plantation area.

Wilmar, which has a market value of US$27 billion (US$1 = RM3.05), booked an October-December net profit of US$318.6 million, down from US$442 million a year ago, missing analysts' forecasts of US$378 million.

The company's oilseeds and grains business reported a pre-tax loss of US$173.2 million in the fourth quarter, despite a 15.9 per cent increase in revenue to US$3 billion, and 4.2 per cent increase in volume.

Wilmar said in the statement that the performance of the oilseeds and grains business reflected "very poor crush margins from excessive imports of beans by the industry and the group's less timely purchases of raw materials."

Its consumer products division registered a 33.4 per cent decline in the fourth quarter to US$37.5 million, also on weaker margins due to rising prices of edible oils feedstock, despite a 29.3 per cent rise in revenue.

"The key disappointment came from the larger losses in soyabean crushing despite earlier management guidance that the third quarter would be the worst quarter for this division," brokerage house UOB Kay Hian said in a note to clients.

Wilmar's chairman and chief executive Kuok Khoon Hong said in a statement that the group was optimistic about 2011 despite the weaker performance. - Reuters

Read more: Wilmar results miss forecasts http://www.btimes.com.my/Current_News/BTIMES/articles/wilmo/Article/#ixzz1ErrABh95

Buy ‘defensive’ Bursa stocks: UOB Kay Hian

Investors should buy “defensive” stocks with high dividend yields such as Malaysia’s DiGi.Com Bhd and PLUS Expressways Bhd to ride out the Middle East turmoil, according to UOB Kay Hian Holdings Ltd.

Commodity and energy-linked sectors such as palm oil and oil and gas companies are also “obvious beneficiaries” of higher crude oil prices while potential losers are AirAsia Bhd and Tenaga Nasional Bhd, Vincent Khoo, an analyst at UOB Kay Hian, wrote in a report today. - Bloomberg

Read more: Buy ‘defensive’ Bursa stocks: UOB Kay Hian http://www.btimes.com.my/Current_News/BTIMES/articles/20110224113405/Article/index_html#ixzz1ErqmYIbR

LPI Capital targets 15pct growth in gross premiums in FY11

LPI Capital targets 15pct growth in gross premiums in FY11
Written by Chong Jin Hun at theedgemalaysia.com
Thursday, 24 February 2011 14:03


KUALA LUMPUR: Insurer LPI CAPITAL BHD [] is targeting a 15% growth in gross premiums in the financial year ending Dec 31, 2011.

Its chief executive officer Tee Choon Yeow said on Thursday, Feb 24, the growth would be boosted by new businesses from strategic partners which are also global insurers.

He said LPI was also expanding its agency force with three planned branch offices in Peninsular Malaysia. It has 16 branches now.

“Net profit growth for FY11 should be more than 15%,” he told reporters after its AGM here. In FY10, LPI raked in RM755.93 million in gross premiums.

Philip Fisher: Quality first, Price second

Fisher formulated a clear and sensible investing strategy (which I'll get to in a second), wrote one of the best investment books of all time, Common Stocks and Uncommon Profits, and made a good deal of money for himself and his clients.


His son wrote that Phil's best advice was 

• to "always think long term," 
• to "buy what you understand," and 
• to own "not too many stocks." 

Charles Munger, who is Buffett's partner, praised Fisher at the 1993 annual meeting of their company, Berkshire Hathaway Inc. (BRK/A): "Phil Fisher believed in concentrating in about 10 good investments and was happy with a limited number.  That is very much in our playbook. And he believed in knowing a lot about the things he did invest in. And that's in our playbook, too. And the reason why it's in our playbook is that to some extent, we learned it from him."


In addition to the warning against over-diversification — or what Peter Lynch, the great Fidelity Magellan fund manager, calls "de-worse-ification" — the book makes three important points:


(1)  First, don't worry too much about price.  (Quality first, Price second)

• "Even in these earlier times [he's talking here about 1913], finding the really outstanding companies and staying with them through all the fluctuations of a gyrating market proved far more profitable to far more people than did the more colorful practice of trying to buy them cheap and sell them dear."

• In fretting about whether a stock is cheap or expensive, many investors miss out on owning great companies. My own rule is: quality first, price second.

(2)  Second, Fisher says that investors must ask, "Does the company have a management of unquestionable integrity?" 

(3)  Finally, Fisher offered the best advice ever on selling stocks. "It is only occasionally," he wrote, "that there is any reason for selling at all."


Yes, but what are those occasions? They come down to this: Sell if a company has deteriorated in some important way. And I don't mean price! 


Fisher's view, instead, is to look to the business — the company itself, not the stock. 


"When companies deteriorate, they usually do so for one of two reasons: 

• Either there has been a deterioration of management, or 
• the company no longer has the prospect of increasing the markets for its product in the way it formerly did."

A stock-price decline can be a key signal: "Pay attention! Something may be wrong!" But the decline alone would not prompt me to sell. Nor would a rise in price. 


Time to sell? If you did, you missed another doubling.


"How long should you hold a stock? As long as the good things that attracted you to the company are still there."


http://myinvestingnotes.blogspot.com/2010/09/learning-from-long-men-late-phil-carret.html

Technical Analysis: Five Chart Patterns You Need to Know

A guide for the practical investor

So you’re a believer.

You believe there are profits to be made in stocks. You believe you don’t have to pay a high-profile Wall Street banker to make money. You believe the average Joe can earn a healthy fortune using the right system. And you are dead-set on figuring that system out.We agree with you. We believe that with the right tools, anyone can make consistent money in stocks. 

And we are going to give you those tools.

A Simple Toolkit for Reliable Returns
In this simple-to-follow, eight-page guide, ChartAdvisor introduces you to five of the most powerful, profitable patterns in stocks.

These stock patterns pave the way 10%, 15%, even 20% gains for each winning trade. True, not the 2000% some people are touting. But it’s darn good money, made using an established strategy, and attainable at relatively low risk. It’s realistic money. And you don’t have to trust your hard-earned cash to some broker’s favorite fad.

In the next few pages, you’ll learn all the skills you need to recognize proven money-making stock patterns, and you’ll get to see these patterns in action.

"I've used a variety of ... systems, and lost 25% of my portfolio over a 2-3 year period crazily trading hundreds of stocks. When I began using ChartAdvisor and sticking to the rules it made all the difference. The stress of watching stocks is gone, I can do my job without constantly worrying, and I've made a 26% return on my portfolio just in the last three months on just a few trades!"

~ B. Hiebert, Canada

We’ll also introduce you to our ChartAdvisor system – Three Simple Steps to Stock Profits. Whether you decide to continue with ChartAdvisor or not, after reading this guide, you’ll …

Discover How To:

1. Identify profitable stock patterns
2. Minimize your risk
3. Maximize your return in up and down markets

Make money on the stock market

You’ll learn how to make big money on stocks using a technical analysis toolkit that has been wielded successfully for hundreds of years. That’s no exaggeration.

That makes these patterns some of the most time-tested strategies in finance. You can feel secure that you are trusting your investments to a highly refined system – not a new craze or an analyst’s hunch.

There are hundreds of patterns in stock charts that traders can look for, but atChartAdvisor, we focus only on the most trusted.

----

Profitable Pattern Number One The Symmetrical Triangle: A Reliable Workhorse You’ll recognize the symmetrical triangle pattern when you see a stock’s price vacillating up and down and converging towards a single point. Its back and forth oscillations will become smaller and smaller until the stock reaches a critical price, breaks out of the pattern, and moves drastically up or down. The symmetrical triangle pattern is formed when investors are unsure of a stock’s value. Once the pattern is broken, investors jump on the bandwagon, shooting the stock price north or south. Symmetrical Triangle Pattern To form your symmetrical triangle pattern, draw two converging trendlines that bound the high and low prices. Your trendlines should form (you guessed it) a symmetrical triangle, lying on its side. How to Profit from Symmetrical Triangles Symmetrical triangles are very reliable. You can profit from upwards or downwards breakouts. You’ll learn more about how to earn from downtrends when we talk aboutmaximizing profits. If you see a symmetrical triangle forming, watch it closely. The sooner you catch the breakout, the more money you stand to make. Watch For: • Sideways movement, a period of rest, before the breakout. • Price of the asset traveling between two converging trendlines. • Breakout ¾ of the way to the apex. Set Your Target Price: As with all patterns, knowing when to get out is as important as knowing when to get in. Your target price is the safest time to sell, even if it looks like the trend may be continuing. For symmetrical triangles, sell your stock at a target price of: • Entry price plus the pattern’s height for an upward breakout. • Entry price minus the pattern’s height for a downward breakout. ChartAdvisor Symmetrical Triangles in Action ChartAdvisor has a long history of identifying symmetrical triangle patterns. Over the last two and one-half years, ChartAdvisor has brought to its readers over 20 symmetrical triangle patterns. That’s an average of one every month and a half. Our readers earned an amazing 40% profit on our Nortel Networks Inc (NT) pick. Those who followed our call on Rochester Medical Corp (ROCM) in September of 2004 earned 15% in 33 days. And in October of 2004, our members earn 11% in 19 days when ChartAdvisor noticed Pan American Silver Corp (PAAS). Our members earned 11% in 19 days on the PAAS symmetrical triangle pattern. If you’re not sure you can recognize a symmetrical triangle on your own, be sure to visitChartAdvisor.com daily for out Charts of the Day.  ---- Profitable Pattern Number Two Ascending and Descending Triangles: The Traditional Bull and Bear When you notice a stock has a series of increasing troughs and the price is unable to break through a price barrier, chances are you are witnessing the birth of an ascending triangle pattern. Ascending Triangle Pattern Confirm your ascending triangle pattern by drawing a horizontal line tracing the upper price barrier and a diagonal line tracing the series of ascending troughs. The descending triangle is the bearish counterpart to the ascending triangle. Descending Triangle Pattern Confirm your descending triangle by drawing a horizontal line tracing the lower price barrier and a diagonal line tracing the series of descending troughs. The ascending and descending patterns indicate a stock is increasing or decreasing in demand. The stock meets a level of support or resistance (the horizontal trendline) several times before breaking out and continuing in the direction of the developing up or down pattern. How to Profit from Ascending and Descending Triangles Ascending and descending triangles are short-term investor favorites, because the trends allow short-term traders to earn from the same sharp price increase that long-term investors have been waiting for. Rather than holding on to a stock for months or years before you finally see a big payday, you can buy and hold for only a period of days and reap in the same monster returns as the long-time stock owners. As with many of our favorite patterns, when you learn to identify ascending and descending triangles, you can profit from upwards or downwards breakouts. That way, you’ll earn a healthy profit regardless of where the market is going. Watch For: • An ascending or descending pattern forming over three to four weeks. Set Your Target Price: For ascending and descending triangles, sell your stock at a target price of: • Entry price plus the pattern’s height for an upward breakout. • Entry price minus the pattern’s height for a downward breakout. ChartAdvisor Ascending and Descending Triangles in Action Ascending and descending triangles are some of our most popular patterns, because their features are so clear and the breakouts are almost always fast and furious. Flanders Corp (FLDR) earned our readers 28% in 18 days. Dominos Pizza (DPZ) jumped 12% in 20 days after we pinpointed the breakout point on June 13, 2005. Another of our winning picks in 2005, Dril-Quip Inc (DRQ) jumped 12% in just 6 days. On Boyd Gaming (BYD), investors following our pick earned a whopping 29% in 35 days. Our readers earned 29% in 35 days on the BYD ascending triangle pattern. As a ChartAdvisor regular you would have reaped incredible profits on the 60 ascending and descending triangle picks we’ve made since our program’s beginning. We features an average of two of these cash cows per month, making them one of the most prevalent and predictable patterns in your toolbox. ---- Profitable Pattern Number Three Head and Shoulders: A ChartAdvisor Staple The head and shoulders pattern is a prevailing pattern among short sellers, investors who profit from downtrends. After three peaks, the stock plummets, offering a textbook, high-return opportunity to traders who catch the trend early. Head and Shoulders Pattern Head and shoulder patterns are characterized by a large peak bordered on either side by two smaller peaks. Draw one trendline, called the neckline, connecting the bottom of the two troughs. The first trough is a signal that buying demand is starting to weaken. Investors who believe the stock is undervalued respond with a buying frenzy, followed by a flood of selling when traders fear the stock has run too high. This decline is followed by another buying streak which fizzles out early. Finally, the stock declines to its true worth below the original price. How to Profit from the Head and Shoulders Pattern • Short sell as soon as the price moves below the neckline after the descent from the right shoulder. Set Your Target Price: For the head and shoulders pattern, buy shares at a target price of: • Entry price minus the pattern’s height (distance from the top of the head to the neckline). ChartAdvisor Head and Shoulders Pattern in Action Profiting from a downtrend can seem counterintuitive at first, but ChartAdvisor.comreaders soon learn the benefits of being able to profit in up OR down markets. This head and shoulders pattern on PAWC shot up an astonishing 27% in just 33 days. ---- Profitable Patterns Number Four and Five Triple and Double Bottoms and Tops: Reversals upon reversals When you see a W or M pattern forming, you may have just discovered a money-makingdouble bottom or double top pattern. These patterns are common reversal patterns used to suggest the current stock trend may be likely to shift. But don’t panic if your double bottom or double top patterns do not develop as you had originally thought. You haven’t lost your chance for cash. If your W or M pattern reverses for a fourth time, you could now be working with the profitable triple bottom or triple top. Double Bottom Pattern Double Bottom Pattern A small peak is surrounded by two equal troughs. Purchase When: • The price exceeds the middle-peak price. Watch For: • A price increase of 10% to 20% from the first trough to the middle peak. • Two equal lows, not to differ by more than 3% or 4%. Set Your Target Price: For the double bottom pattern, sell your stock at a target price of: • Entry price plus the pattern’s height (distance from the peak to the bottom of the lowest trough). Double Top Pattern Double Top Pattern A small trough is surrounded by two equal peaks. Short Sell When: • The price drops below the middle-trough price. Watch For: • A price decrease of 10% to 20% from the first peak to the middle trough. • Two equal highs, not to differ by more than 3% or 4%. Set Your Target Price: For the double top pattern, buy shares at a target price of: • Entry price minus the pattern’s height (distance from the trough to the top of the highest peak). Triple Bottom Pattern Triple Bottom Pattern Three equal troughs amid a series of peaks. Purchase When: • The price exceeds the resistance established by the prior peaks. Watch For: • A series of three identical troughs at the end of a prolonged downtrend. Set Your Target Price: For triple bottom patterns, sell your stock at a target price of: • Entry price plus the pattern’s height (distance from the resistance to the bottom of the lowest trough). Triple Top Pattern Triple Top Pattern Three equal peaks amid a series of troughs. Purchase When: • The price falls below the support that formed from the prior troughs. Watch For: • A series of three peaks at relatively the same level. Set Your Target Price: For triple top patterns, buy shares at a target price of: • Entry price minus the pattern’s height (distance from the support to the top of the highest peak). Now You Know… The five most profitable stock patterns: • symmetrical triangle • ascending and descending triangles • head and shoulders • double top and double bottom • triple top and triple bottom You’re halfway through your ChartAdvisor toolbox. But you still need a couple more nuts and bolts to ensure high-dollar profits in the market. Before you’re ready to invest, you’ll want to learn how best to cut your losses and maximize your returns. ---- How to Minimize Your Risk No investment advisor likes to admit it, but no stock picking system is perfect. Sometimes, the stocks we think will explode, don’t. Sometimes, the stocks we feature lose money. There may not be a foolproof system to predicting the stock market, but we do have afoolproof system for managing risk. ChartAdvisor follows one of the safest risk reduction systems available. Using these three simple steps, you can reduce the risk in your stock picking plan: Three Ways to Take Risk Out of the Stock Market 1. Screen Your Picks. This might seem obvious, but patterns that look like they are developing into predictable trends do not always follow through. After combing over thousands of stock charts a day, ChartAdvisorwill often not fetures a single stock. 2. Get In. Get Out. ChartAdvisor preaches setting realistic target exit prices for all stocks. We lock in high returns while the stock is high, and we get out before the market has a chance to change its mind. 3. Set Tight Stop Losses. This step is absolutely critical to minimizing your risk in the stock market. If a sure-fire winner turns out to be a fizzled-out dud, your system needs to have a built-in, abandon-ship trigger. That is, you need to know when to cut your losses and move on to brighter prospects. ChartAdvisor sets its stop-loss trigger around 3%. So if a trade starts to go sour, you will almost never lose more than 3% of your investment. “I am glad I took a second look at ChartAdvisor. I keyed in your data from the 2nd of Feb 04 into a spread sheet with 20% of capital allocated to each symbol and came up with the 38% annualized return which is better than a poke-in-the-eye-with-a-sharp-stick, considering "the market" has been a sideways affair since the starting date. What I must mention is how inspired and relaxed I am after an in-depth study of your real trading account making that amount of return... I can more fully appreciate the much-lectured "cut your losses short now", seeing just how early it pays to get out when the trade goes against you, rather than the "give-it-room" systems I have tried." -P. Cameron, New Zealand ---- How to Maximize Your Return In Up or Down Markets Remember at the beginning of this report when we said we’d show you the Three Simple Steps to Stock Profits? We already learned about step one: picking profitable stock patterns. We’ve also covered step two: minimizing your risk. Now we’ve come to the final step that makes theChartAdvior system so unique: how to profit from stocks, even when the stock goes down. It’s a common misconception that traders can only make money when the price of a stock rises. Investors can make money anytime they can predict a stock’s future movement – up or down. It’s time to learn about short selling. Short selling is the secret to making cash in a down market. Here’s how it works: 1. Identify a stock pattern that suggests a stock is headed down. Example: The Cleveland Cliffs descending triangle pattern in April of 2005 was perfect for short selling. 2. Borrow shares of the soon-to-decline stock from your brokerage. Example: Let’s say, right before the Cleveland Cliffs pattern (above) breaks out and moves downwards, you borrow 100 shares of the stock. 3. Immediately sell these borrowed shares. Example: You immediately sell these borrowed shares of Cleveland Cliffs at the price just below the support line: $70 per share, 100 shares = $7,000. You are now sitting on $7,000. But, of course, you still owe the brokerage 100 shares, which you don’t currently have anymore. 4. Wait for the stock to drop to your target price. Example: You wait for the stock to reach the target price, which in this example, is $63 per share. 5. Buy the shares at the target price. Example: You use the $7,000 you made earlier to purchase 100 shares at $63 per share. That costs you $6,300 dollars and leaves you with an extra $700 in your account. 6. You return the shares to your brokerage. Example: Return the 100 shares of Cleveland Cliffs to your brokerage. 7. Enjoy your profits. Example: You earned $700, a 10% profit on $7,000. And even better, you made $700 when the price of CLF declined and all other investors were losing money! ---- Time to Get Started! You’re ready. You know everything you need to make big money on stocks, and you can put all of these tools to work now. Start flipping through stock charts, and see if you can identify the right patterns. Then use our easy-to-follow principles of risk management and short selling to ensure you are squeezing the most out of every one of your investment dollars.

http://www.chartadvisor.com/freereport/report_index.aspx

A toast to Kit Siang's achievements

Thanks.

A winner, the best of the best, an anchor, a caring person, stubbornly optimistic.

You too have sacrificed and contributed a lot to a better Malaysia.

Happy Birthday.

PetDagang heading for a record quarter. Maintain outperform at RM12.50 with target price RM15.40

PetDagang heading for a record quarter

Written by Financial Daily
Friday, 18 February 2011 11:36

Petronas Dagangan Bhd
(Feb 17, RM12.70)
Maintain outperform at RM12.50 with target price RM15.40:Petronas Dagangan’s (PetDagang) record quarterly net profit of RM236 million for 3QFY11 took 9M bottom line to an all-time high of RM641 million. At 73% of our full-year forecast, it met our expectations as we anticipate a stronger 4Q. However, at 82% of consensus numbers, it beat market expectations. The absence of an interim dividend was expected. We maintain our forecasts and continue to value the stock at our target market PER of 14.5 times, leading to an unchanged target price of RM15.40. 


PetDagang remains an “outperform” based on the potential re-rating catalysts of: 
(i) leadership in the retail and lubricant segments; 
(ii) an overseas venture; and 
(iii) earnings upgrades by the market. 


Its 6.8% dividend yield, the highest in the sector locally and the second highest regionally, adds to the attraction.

Net profit in 3Q rose 26% year-on-year (y-o-y), thanks to an improvement in volume and margin supported by a bigger petrol station network and higher vehicle population. Furthermore, the steady movement of the oil price in October to December helped stabilise the selling prices of products that do not come under the automatic pricing mechanism. These positive factors boosted earnings before interest and tax (Ebit) margin to 5.5%, the highest since 1QFY10’s 5.8%.

The government raised the selling price of RON 95 petrol by 5 sen per litre in December while the price of RON 97 petrol was adjusted upwards twice by 5 sen in November and 15 sen in December. However, the price increases did not have a major impact on sales volume as the increases were not unexpected.

Furthermore, the double hikes for RON 97 affected mostly high-end users with performance cars. An estimated 75% to 80% of motorists use RON 95, which is kept affordable at RM1.90 per litre. RON 97 retails at RM2.50 per litre.

PetDagang is Malaysia’s No 1 petroleum retailer. It is also tops in the commercial and LPG segments. However, the company still trails behind Shell in the retail and lubricant segments. Management targets to wrest the retail leadership position from Shell within three years. In the lubricant segment, where it is a late entrant, PetDagang aims to be the leader in five years.

PetDagang is currently mandated to operate only in Malaysia. However, this may change as management is mulling the possibility of operating outside Malaysia. In addition to the eventual reality of hitting a saturation point, we believe its interest in widening its market exposure may have been triggered by the likelihood of full deregulation of the domestic market. — CIMB Research, Feb 17

This article appeared in The Edge Financial Daily, February 18, 2011.


http://www.theedgemalaysia.com/in-the-financial-daily/181818-petdagang-heading-for-a-record-quarter.html

Three ways to value stocks

September 29, 2008


By Ooi Kok Hwa
TheStar

MOST stocks sell at a certain price level influenced by the companies’ future income, the overall market conditions as well as the assets owned.

Three factors – income, market and asset approach – can be individually used to value a company.

Income approach: Under this approach, a company’s value is dependent on the present value of its future cash flows, which can be in the form of dividends, profits or cash movements. In Malaysia, we can use this approach on companies that are paying good and consistent dividends or companies showing strong future revenue and profits. In most times, these will show stable stock prices regardless of market conditions.

The overall condition may be weak, but these companies will be selling at high value due to the potential of their future businesses as well as the certainty of future dividend payments. Investors will hold them for the long term and will be quite reluctant to sell these stocks as they always reward them with handsome dividend payments. In Malaysia, these companies normally have repetitive consumer needs with products that wear out fast, are used up quickly as well as have strong brand appeal.

Examples include powdered milk, instant noodles, condensed milk, infant formula, soft drinks, canned milk, dairy products, toiletries or healthcare products. Most of these products are consumed fast and have strong brands. Given the present weak economic environment, despite higher operating costs, especially high raw material prices, these companies still enjoy good turnover and sales, as they are able to pass the higher costs to consumers.

Even though retailers need to fork out more money to pay for their products, it is necessary, as the products have already formed part of the essential items in most households. As a result, their financial results may not be much affected by the weak economic environment. In fact, they will still be able to reward their shareholders with good dividends. Hence, such stocks can be purchased any time, depending on the future outlook of their businesses rather than the overall market conditions.

If these stocks’ outlook is promising and able to generate high turnover, profits and cash flows, retailers may buy them now even though the future remains bleak.

Market approach: Under this approach, the companies’ value depends on the market prices of similar types of companies. In most instances, the fluctuation of the overall market sentiment can affect their stock prices.

For example, the stock prices for companies like Telekom Malaysia Bhd, Tenaga Nasional Bhd and Malayan Banking Bhd will fluctuate based on the overall market risks and returns. Even though these stocks do pay dividends, their price movements tend to follow the overall market fluctuation. We use price-earnings ratio or price-to-book to value these stocks, which will depend on how many times the current market price is above their earnings or book value. Then we compare these ratios with companies in the same industry. The timing to purchase this type of stocks is important, as we need to catch them when the market touches the bottom.

Unfortunately, predicting the market bottom is a very difficult task in view of the uncertainties of the market outlook.

Asset approach: We use asset approach on companies that own a lot of assets, like land banks, buildings or other fixed assets. Under this approach, the companies’ value will depend on the types of assets owned by the companies. Among the three approaches, this is the least important in evaluating any ongoing concern companies because they will not liquidate their assets.

When we buy into these operating companies, we are more interested in how much future cash flow that can be generated rather than to expect any cash proceeds from the disposal of their assets.

Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting.