Smallcap MNC, VIS & etc fall sharply? They don’t have value at the first place.

When Bursa queries many penny stocks sky rocketed.  A standard answer no matter sharp up or sharp sell down.  All these companies rocketed from penny to high valued stock without reason. 

In fact, it is pretty normal as it even happened in Dow Jones and Hong Kong.  End of the day, Stock exchange can be a casino if intentionally use it the wrong way.  Sometimes even money laundering.

However, where is the value that cause these companies to sky rocket at the first place?

Our call continue on Climate change and Agriculture

We continue to favour climate change related stock. In KLSE, our bet on Cypark has rocketed to RM 3.00 from our initial recommendation around RM 1.80. HHHcorp also tested RM 0.200 few weeks ago. Left only a highly undervalued Analabs still trading at RM 1.70. We believe the stock stagnant due to lack of new activities in new terms. But it can be a gradual long term buy.

On the other hand, 6888 英達公路再生科技 listed in HSI dropped to HKD 2.10 and trading at around 10 times PE. The stock is affected by recent sentiment of China economy but is at attractive price level. Union Steel of SG is proposing increasing their capacity by buying Chye Hup Heng Sdn Bhd. We still like Union Steel at the price of SGD 0.110 and below.

As for agriculture, beside of Palm oil companies. We rarely can find sizable agriculture company in Malaysia. As such, our reach will continue be in food base companies like Kawan Food, Lonbisc, Layhong and etc. We recommend buy on dip at the current price level as price for food companies in Malaysia needs to be re-valued to reflect its actual potential and soaring demand.

We believe the market is strong and will test new high again in weeks to come

We believe the buying momentum is strong and may test new high again in 1-2 weeks to come. Beside of Ukraine crisis, the data shown from China is within expectation. Most other economy show sign of stronger pace recorded.

Local front, DiGi, PBBank, Tenaga are so far within better expectation. We see cheap fund will continue flow in the reverse the trend from last few months. We expect buying continue and intermediate target at 1870 – 1880.

We sold all Gadang above RM 1.900

We have sold off all Gadang above RM 1.900. We have switched all again to Paramount MNRB and now MBSB. We start to re-accumulating MBSB for one reason. We like the idea they are going for a bank license.

We recommend a graduate buy on MBSB below RM 2.500

We have decided not to go for its right. But today we like MBSB for one reason. They are going for their bank license in 2 years. That align to providing back the greatest return to EPF. By the time when they got the bank license, they can get a better value for RHBCap to merge with the entity. So for us is a buy now.

We continue to favour long on dip of KLCI between 1840 – 1850

The range bound behaviour plus persisted blue chip buying holding KLCI very well even Dow Jones has a bad week. We think the current position will be the same if there is no lead for next week. We have long a few contracts and closed with profit this week. Suggesting not to carry contract over night if not necessary to avoid unforeseen circumstance in case arises from Ukraine crisis or a chance in China or Europe direction.

We have disposed Gadang average RM 1.700 above

We started to dispose Gadang and have an average price above RM 1.70. Research house is calling the fair value above RM 2.00. But we feel we are happy with the profit. As Gadang did not fall under our cup of tea for long term hold. We switched to our top picks in our portfolio.

Now people questions price of Google, Facebook and Twitter. Isn’t silly?

So don’t believe in so call analyst.  As they are playing role in making movement in the market.  If you roll back few months news on tech stocks.  They use 1001% reason to tell you why they worth.  Now they said investors are questioning the valuation.

Back to home ground.  Most of the tech stocks are over priced and no one bother on it.  Half of the tech companies are even in the red.  No valuation but still chasing high. 

In short, avoid tech sector in KLSE.

We sold some Gadang at RM 1.60

We still think Gadang stock price will improve further but has reached our valuation of RM 1.50.  We sold some as we still don’t quite like non recurring business. Even though Gadang is trying on this path as well. 

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