General Electric – Testing the strong resistance for the 3rd time!

General Electric (GE) had a gap up yesterday closed at $14.52 (+4.69%) after JPMorgan upgraded GE to Overweight from Neutral and raised the target price from $12 to $17. I will be keeping a close watch on this share over the next few weeks to see whether it can break the resistance of $14.57. Next immediate resistance is $16.44. I am planning to keep GE as long term value investment.

Stock’s background

  • 3 years’ historical high = $42.12
  • Current Price = $14.52 (35% of the historical high)

China Zaino – another S-chip stock is swinging in the channel!

Spotted another S-chip stock China Zaino besides Synear and China Hongxing. The patterns for these three stocks are very similar (had breakout and swing inside the up trend channel). China Zaino’s fundamental is pretty solid and can be kept as value investment. My strategy for this stock is to buy some for long term investment and some for short term momentum investment. Target entry point is $0.28 and exit point is $0.335 (about 20% profit target).  Next strong support is $0.27 (61.8% Finonacci Retracement level).

Hongguo’s Fundamental & Intrinsic Value

Base on Q2, 2009 financial report:

  • PE = 5.8
  • Dividend Yield = 4.3%
  • NAV = $0.3438
  • Net Earning = 7.8% (12% in 2008)
  • Current Ratio = 3.72
  • ROA = 13.6% (Base on 2008 Full Year)
  • ROE = 18.5% (base on 2008 Full Year)
  • Cash Flow = S$46.3Million (103% increase with reference to 2008 Full Year)

 Stock Background 

  • 3 years historal high = $1.46
  • Current Price = $0.31 (only 21% of 3 years high)

 Intrinsic Value Calculation 

  • EPS Annual Growth = 12% (from 2004A to 2009F)
  • Discount Rate = 5%
  • Intrinsic Value = $0.73 (58% Discount of Current Price to Intrinsic Value)