Saturday, February 25, 2017

Insas Bhd (Rm 0.805)

Insas announced its latest quarterly earning of 3.21 sens a share. Net assets is Rm2.18. Its latest earning is expected to be less than its previous quarter of 8.84 sens because it did not sell any Inari share since 29 September 2016. During its previous quarter (1st July to 30th September) Insas sold16.5 millions shares of Inari.

In actual fact, Insas's revenue for its latest quarter has improved by 36%. And if we removed 'Other Income' from its earning, its latest profit before tax has improved by 81%.

Insas's share price continues to drop is because technically it is having its correction phase. Please refer to my post on 16th February.

Details of its 'Other Income' shows that main contributors to its Q1 profit are 'Gain on disposal of shares' Rm 24.6 million, 'Fair value gain' Rm 4.9 million and Rm 6.5 million and 'Exchange gain' Rm 5.9 million.

Technically Insas is on its mega wave (5). It has completed its major wave 1-2 and is forming its major wave 3.

Depending on the magnitude of its current correction, there are 3 possible scenarios.

Scenario 1

Current correction is sub-wave iv.

Correction is almost done. Can be confirmed/ruled out by next week.

Scenario 2

A higher degree wave (iv) correction that may last another 2 weeks.

Next rebound is tricky, it can be the sub wave v of scenario 1 and it can also be the wave b of (iv) of scenario 2. It has to have uncertainty like this or else the market cannot exist.

Scenario 3 (Too bullish to be true - unlikely)

This is the most bullish (long-term) scenario. Insas is forming its sub-wave ii.

If really this is the scenario, Insas will have a long way to go, up up up - Fatt (发) loh.

Insas half-year earning is 12.05 sens. Net assets is Rm 2.18 a share.

As I have mentioned in my 8th February post, Insas has 402 millions Inari shares. For every Insas share there is 0.6 Inari share. At Friday's closing price of Rm 1.91 for Inari, the 0.6 Inari share is worth Rm 1.14. Insas at 80.5 sens is cheap, very very cheap.


Thursday, February 23, 2017

FBMKLCI (1,704)

KLCI is forming its major wave 5.

So far it has completed the wave (i) and (ii) of its major wave 5.Wave (iii) is in progress.

KLCI has just completed its mini wave 3 and it needs a few more days to complete its mini wave 4 at around 1,670 to 1,680 level.


Tuesday, February 21, 2017

Dow - When will be its next major correction

Dow (20,743)

When Dow continues to set new record highs, the rest of the major world markets will follow the Dow faithfully, moving higher. How long can the current up trend last ?

Lets look at Dow's long-term chart. The current up trend is the mega wave VII, started in March 2009 after Dow hit a low of 6,547. At its current level of 20,743, Dow has gained 216%.

But mega wave VII is very unlikely to be the shortest wave. If I assumed its percentage gain to be the same as that of mega wave I, the shortest wave so far, mega wave VII can reach 31,000.

Currently Dow is forming the major wave 7 of its mega wave VII. I expect Dow to complete its major wave 7 within this year. The next major correction for Dow is its major wave 8 pullback of around 15% before Dow has its major wave 9 surge to 31,000 level. I expect the major wave 9 to be a crazy, short and sharp euphoric run up with record volume. It should end in 2018. Be careful of the mega wave VIII correction, it can be anything between 40% to 60%.

For short-term, Dow is about to complete its minor wave v as well as its mini wave 3. Mini wave 4 correction is likely to take a week. It will be followed by its mini wave 5 run-up to complete its sub-wave iii.


Joyce Chu 四葉草

Watch out for this young 19 years old Malaysian Singer - Joyce Chu 四葉草.

She rose to fame after the music video 'Malaysia Chabor' (Chabor in Hokkien dialect means girl).

Her latest hit song is 'Mambo Island'.

Friday, February 17, 2017

One of the most undervalued stocks - Kluang Rubber Co (M) Bhd (Rm 3.24)

This is a greatly undervalued stock but owning this stock can be very frustrating. Its very very thinly traded and very often not a single lot traded for days. To buy is difficult and to sell is equally difficult because everyday there are very few buyers and sellers and the offered price between buyer and seller is usually very wide.

For the whole of 2016, the stock price stayed around Rm 3.20.

Technically, it has reached a possible turning point, a major wave 1-2 and wave (i)-(ii) situation. Next up is likely to be the wave (iii).

But if the coming wave (iii) stop at the upper trendline, it can continue to move sideways to form another X-abc.    

From its 17-year chart, I noticed an 'inverted head and shoulder' pattern with its wave A touching the neckline before moving sideways for the next 24 months.

Its first 3 quarters earning per share were 7.05 sens, 0.45 sens and zero respectively. Its latest reported net assets per share is Rm 10.14. It has a strong balance sheet.

Share capital is Rm 63 millions consists of 63 millions share of Rm 1.00. There is no borrowing.

It has Rm 415 million of 'Available for sale investments' and cash of Rm 257 million. Cash alone is Rm257/63 = Rm4.07 a share.

To check its 'Available for sale investment', I have to refer to its 2016 annual report.

It is the value for quoted share outside Malaysia Rm 333 million and precious metal (must be gold) Rm 21 million.

From its annual report I have spotted the following.

It has 43.4% of Sg. Bagan and 45.3% of Kuchai. 

For quoted share inside Malaysia, the value at cost and is only Rm8.8 million but at Friday's closing price of Rm3.02 for Sg. Bagan and Rm1.17 for Kuchai, the total market value for its 43.4% of Sg. Bagan and 45.3% of Kuchai is Rm 151 million. The fair value stated in the report is Rm 124 million.

I just wonder what can be the current actual value for its quoted share outside Malaysia that was stated at Rm 333 million and its precious metal stated at Rm 21 million.

Kluang at Rm 3.24 is definitely greatly undervalued but if its share price refused to move higher day in, day out, holding the stock can be very frustrating for a small investor.


Thursday, February 16, 2017

EG and Insas

EG Industries Bhd (Rm 0.93)

EG dropped 4 sens after its announcement on its proposal of 1 for 4 right issue of Redeemable Convertible Preference Share (RCPS) and 1 bonus share for every RCPS subscribed.

Today's drop is likely to be its mini wave 4. Very likely its share price will move sideways to form its mini wave 5 to complete its sub wave iii, follows by wave a-b-c of its sub-wave iv in the next 2 to 3 months.

Insas Bhd (Rm 0.825)

In longer term chart, we can see that Insas is forming its major wave 3

Insas has started its correction in the last 3 trading sessions. It dropped another 3 sens today. If it can start to move higher again tomorrow, then this current pullback is its mini wave 6 correction and its sub-wave iii has 9 mini waves.

But if Insas continues to move lower in the next few days, then its sub-wave iii has only 5 mini waves and has ended. The current correction becomes a higher degree sub wave iv correction.

There is another possibility that the current correction is an even higher degree wave (iv) correction. At this moment I feel that this option is not that likely.


Wednesday, February 15, 2017

FACB Industries Incorporated Bhd (Rm 1.18)

Facb's principal activities are manufacturing and marketing of mattresses and related bedding products; manufacturing and marketing of stainless steel pipes and fittings; and lastly, power plants operation in China.

Facb announced its quarterly result today. For its latest quarter ending 31st December 2016, its earning per share is 1.16 sens, which is lower then its previous quarter of 1.66 sens. Net assets per share is Rm 2.47.

Facb's balance sheet is impressive.

 It has Rm 155 millions of cash.

It has zero borrowing. With only 85 million shares, its cash per share is Rm155/85 = Rm 1.82 and yet its share price has been hovering around Rm 1.05 in the last 20 months.

It added 4 sens today to reach Rm 1.18, a level last seen in May 2015. If its share price can continue to move higher from here, most likely it is forming the wave (iii) of its major wave 5.

But if its price starts to drop lower again in the coming days, that means it has not completed its major wave 4 and will continue to move sideways with its abc-X-abc.


Tuesday, February 14, 2017

EG Industries Bhd (Rm 0.975)

EG put up a strong performance today. It gained 7 sens (+7.7%) with high volume to close at 97.5 sens. The magnitude of mini wave 3 at this moment is about equal to the magnitude of mini wave 1. This is a possible turning point to form mini wave 4.

But if the uptrend can continue into next few days, then mini wave 3 can either equal to 1.618 times or 2.618 times the magnitude of mini wave 1. Under this scenario, mini wave 3 can either end at Rm 1.02 or higher at Rm 1.12.

If I take the percentage gain of the current major wave 5 to be the same as the percentage gain of the major wave 1, i.e. +62%, the target for major wave 5 is around Rm 1.33, another 36% to go.


Sunday, February 12, 2017

Weekly Update

Dow (20,269)

With last Friday's 96 points gain, Dow managed to move above its short-term upper resistance. If Dow can continue to move higher next week, it is forming the mini wave 3 of its sub-wave iii of its wave (v) of its major wave (7).

However, if Dow starts to move lower in the next few sessions, then nothing has changed despite last two session's 215 points gain. Dow remains in its wave (vi) formation, an expanding a-b-c.

FBMKLCI (1,698)

KLCI formed a small gap last Friday. Is this an exhaust gap? If it is indeed an exhaust gap, then KLCI has completed its mini wave 3 and will move into a one week or longer correction to form its mini wave 4.

But, if KLCI can punch through its upper trendline, then it is the last surge of its sub-wave i before a more than 2 weeks sub-wave ii correction.

Berjaya Corporation Bhd (Rm 0.395)

BJCorp is likely to have completed its sub-wave i, if this sub-wave i has only 5 waves.

But if BJCorp can continue to move higher than 41 sens next week, it means sub-wave i has 9 waves. The current correction is the mini wave 6.

If BJCorp is forming its mega wave (3), it still has a long long way to go in its current up-cycle. There is this possibility that I may be wrong but I feel that this is a potential goldmine.

Paragon Union Bhd (Rm 0.555)

Paragon surged to as high as 59 sens on Friday morning before profit taking brought it down to 55.5 sens at the close.

The current up is the sub-wave v of its wave (iii) of major wave 3.


Wednesday, February 8, 2017

Insas, Supercomnet and Perak Corporation

Insas Bhd (Rm 0.86)

With the completion of the 1 for 1 bonus issue by Inari by end of January 2017, the number of Inari share held by Insas is 402 million (20.7%). If I divide 402 million by the number of Insas share of 663 million, I get 0.6. That means for every Insas share there is 0.6 Inari share. At today's closing price of Rm 1.83 for Inari, the 0.6 share of Inari per Insas share alone is worth Rm 1.09.

Buying Insas at Rm 0.86, you get 0.6 share of Inari worth Rm 1.09 plus Insas's other assets and business. Very Cheap.

Insas last quarter (July-Sept) pre-tax profit is Rm 61.7 million, which includes a one-off gain of Rm 24.6 million from the disposal of some Inari shares. Earning per share for the quarter is 8.84 sens. NTA is Rm 2.13 a share.

Currently Insas is forming the major wave 3 of its mega wave (5). If I assumed the magnitude of major wave 3 is 1.618 times (fibonacci ratio) the magnitude of major wave 1, major wave 3 is likely to end at Rm 1.06. If it is 2.618 times, I get Rm 1.32 for its major wave 3 of (5). Don't get carried away.

Supercomnet Technologies Bhd (Rm 0.14)

Supercomnet is a Taiwanese Company in Sg. Petani, Kedah, that manufactures wires and cables for electrical and electronic devices for automotive industries and for medical equipment.

It is one of the very few penny stocks that reported positive earning for every single quarter in the last two years. Its P/E is about 10. Its last 3 quarterly earnings were 0.1 sen, 0.4 sen and 0.38 sen a share respectively. Its NTA is 17 sens.

Its share price has been moving sideway since 2007 forming a major A-B-C-D-E wave (2). It is possible that the current up-trend is the wave D of (2). The guess now is whether the wave D can reach the upper trend line at around 38 sens (+171%).

Please take note of the OBV breakout, which is a bullish sign.

Perak Corporation Bhd (Rm 1.94)

PRKCorp's chart looked interesting with double-bottom formation with its current price testing the neckline support. Strong OBV that is about to breakout.

The core businesses of PRKCorp  are property development; port and logistic segment of maritime services; and hospitality and tourism(hotel operation). Perak government (PKNP) is the major share holder with 52.27%.

Its last quarter earning is 10.68 sens a share with NTA at Rm 4.26. Very solid.