China Fishery – Insiders Buying

Two substantial shareholders of China Fishery (Pacific Andes Limited and Golden Target Pacific Limited) started the shares acquisition at $1.16 since Aug 18, 2009.

The shares acquisition is still on going and the trading volume is pretty thin for the past two weeks. Normally it is a good sign if there are insiders buying.
In addition, the stock price is on a nice trend (200D MA on a up trend). Although I have sold half of my positions to take profit, I am still holding half of it as long term investment amid the concerns of big correction. I am watching very closely whether the stock can stay above the 20D & 50D MA if the correction comes. If yes, I will probably increase my position in this stock.

Is Material ETF (XLB) ready to run?

The Material ETF (XLB) is another ETF which will be benefited from the economy recovery. Raw material is the basic of all manufacturing products & infrastructures. Those mining companies and material makers will be doing well when there is huge demand of the basic material during the economy recovery. Another point to note is China is buying energy and material companies aggressively to ensure enough resources for future growth.

This XLB is primarily composed of companies involved in such industries as chemicals, construction materials, containers and packaging, metals and mining, and paper and forest products. Among its largest components are Monsanto, E.I. DuPont de Nemours & Co., and Dow Chemical Co. Top 20 stocks as of Oct 8, 2009 as follow:

The ETF is currently is on the long term up trend (200D MA on the up trend). 3 years high at $46 and current price is about $31. The immediate support level is $28.739 and subsequent support at $26.776.
My investment Plan
Entry Level: Between $27 and $29 (but need to monitor whether the price is still above 20D & 50D MA)
Time Frame: 1 to 3 year

Singapore Exchange (SGX) – Fundamental & Intrinsic Value

Base on latest FY2009 Financial Report

  • PE = 29.4
  • Dividend Yield = 3.07%
  • NAV = $0.7326
  • Net Earning = 51.4%
  • Current Ratio = 1.928
  • ROA = 21.6%
  • ROE = 39.3%

Stock Background

  • 3 Years High = $16.3
  • Current Price = $8.47

Intrinsic Value Calculaton

PE Model

  • Fair value PE, base on FY2010 Forward EPS $0.37843 (Average EPS of 2007, 2008 and 2009)
  • Intrinsic Value = $5.68
  • PEG = 1.49

Discounted EPS Model

  • EPS Growth Rate = capped at 15%
  • Discount Rate = 5%
  • 2010F EPS = $0.3783 (Average EPS of past three years)
  • Intrinsic Value = $6.46

DCF Model

  • 2010F Net Operating Cash Flow = $380.429 Million (Average Net Operating Cash Flow for past three years)
  • Growth Rate = capped at 15%
  • Discount Rate= 5%
  • Number of Shares = 1,062.062 Million
  • Intrinsic Value = $6.11

SGX stock price is currently overvalue and furthermore a double top has been formed in stock chart. I am waiting SGX to retrace back to about $7.00 (61.8% Fibonacci Retracement Level) and re-assess the entry point again. SGX is a good stock for long term investment due to its monopolistic business and long term growth prospect in Singapore (as APAC key financial hub).