Investment Idea - April 2011

It's near time to submit personal Income Tax Self Assessment, remember to claim back your 25% of  dividend by submitting HK3 form if you own shares that paid dividend with 25% deducted as income tax. While I went through all the dividend records, noticed there's one advantage for DRP. 

What is the advantage DRP to investor? 

Click here , if want to know more.

Recently, also receive some inquiry about new IPO, BoilerMech Holding Berhad. Many want to know if worth to apply or not. My answer, you can try to apply this counter through IPO. (the closing date is 21 APR 2011, http://www.boilermech.com ) The major share holder for this company is QL, hence investor can invest BoilerMech or directly invest into QL's share. QL suitable for long term investor, with ROE of 21%, if it can grow with the same rate, every 4 years the profit will double. (by theory, the share price will double as well, this had been shown in the past record)

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Market Update March 2011- Market Fluctuations Are an Opportunity

Not long ago, market start to slow down, couple of incidents happen in Middle East Asia follow by Japan's earthquake, all these gave the reason for the market to start the correction. For experience investor, they know that every 1 to 2 years, for market to go down 10% or 20%, is a norm. Every 4 to 5 years, there will be a financial crisis where market down for 30%. (which we already went through in 2008) 

So, what's hot now? Timber and Glove making company going to benefit! For short term, share price of these companies will go up. However, chasing this hot stock is only suitable for short term trader who prepare to cut loss in case if market not move as per their expectation. If you are the person who feel hard to cut loss, please do not consider the hot stock, instead buy only the 5 Star rating company .

For long term investment purpose, remember, it's 5 Star that we should consider. Early March 2011, we have another company, Transmil going burst in Bursa, this remind me, never buy any trouble company, even it's cheap, what's the point for us to buy cheap if the company can not survive and go burst?

The 5 star investment rating company's check list:
1. Is the company having ROE and ROA of more than 15? 
2. Is the company earning increase in the past three years? 
3. Is the management honest? 
4. Is the company's financial position healthy, do they borrow a lot of money? 
5. Do you have margin of safety, buy at low PE? 
6. Do you plan to buy more if the share price of the company going down? 

Investment Idea - Mar 2011

Last few months, we talk about price increased for Petrol, Gas and Sugar. Many want to know how to take advantage of this. On my Jan's mail, I also suggested at least 3 good stocks that will benefit from this price increase, they are TWS, Pchem and MHB. (refer to below my Jan's mail)

This is not a tips, I just share my thought on how to pick good stock that will benefit from current economy scenario. Again, to remind all, the first thing bear in mind is:

Know the company before Invest.

Ask yourself what's the company's business, how's the company making money in the past? (if company not making profit, just forget about it) Can they still making money more than before in the next 10 years?

For example, TWS ($7.20 on Jan), we know it's the plantation stock, so plantation is hot, especially all commodity price going high. There are so many plantation stocks list on Bursa, what's so special about TWS? Last year, TWS's  profit came from Palm Oil and Sugar, but this year it going to make profit from rice as well after took over PadiBeras. This is something like the plane suddenly put on additional engine, of course it will fly high after quarterly result announcement.

Similar to MHB and Pchem, the current high oil price will going to benefit these company. (remember, not any oil and gas company, we need to choose the best) PM. Najib have mentioned, he want to make the nations rich, one of the way is through Oil and Gas industry to make Malaysia regional hub. In short to medium term, these company will show very good profit.  

Two more company, Tenaga (RM6.23) and GENM(RM3.31) can keep in your watch list. I am not telling you to buy now, but time will come for it's share price to fly. You may monitor it until one day when it start to move, just buy it without hesitate. 

Last, never buy a stock base on rumour or tips. Remember to do your own research, internet is very convenience now.