GoldenAgri – Short Term Momentum Play!

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I predict a short term rally after seeing a hammer candle (a trend reversal from short term down trend) yesterday. Today GoldenAgri closed at $0.45 with 86.3 Million shares traded (#3 Most Active Stock). The 10D MA just crossed 20D MA and the stock price is trying to cross above the 10D MA line. All other indicators showed some bullish strength. Strong support at $0.43.

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Jaya Holding – Long White Candle for the third time!

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Jaya Holding closed with a long white candle at $0.485 with 21.6 Million shares traded today. Jaya Holding is also top 30 gainers (%) and top 30 most active stocks today. This big one day gain had happened for the 3rd time within three months. The bull failed in the past two attempts to drive the stock price higher. Can the bull win this round and break the $0.51 resistance? Or, the bear will win this round again to form a triple top? Technical Indicators show bullish strength but past two incidents told me that the bull is unable to sustain its run due to lack of volume.
Mr. Bull, do you need a Red Bull so that you can berJaya (successful in Malay)?

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Mobile One (M1) Fundamental & Intrinsic Value

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Base on Q3 2009 (end of Sept, 2009) financial report:

  • PE = 11.03
  • Current Price = 1.85
  • Dividend Yield = 7.24%
  • NAV = $0.26
  • Net Earning = 20% (21.3% in 2008)
  • Current Ratio = 0.23 (0.48 in 2008, Similar industry is 0.55). M1 borrowed S$292.5M in this financial year.
  • ROA = 18.68% (Base on 2008 Full Year)
  • ROE = 67.3% (base on 2008 Full Year)
 

Stock Background

  •  Historical high = about $2.268
  • Current Price = $1.85

Intrinsic Value Calculation

 PE Model
  • Fair value PE = 15, intrinsic value= $2.52 (base on EPS $0.16771)
  • However, M1’s historical high PE is 11 and never reach PE = 15 before. Thus, it is unrealistic to use PE = 15 to calculate the intrinsic value.
  • Base on PE = 11, intrinsic value (base on EPS $0.16771) = $1.84
  • EPS Growth Rate = 3.6%
  • PEG = 3.09 (Overvalue!)
 DCF Model
  • I am unable to calculate the intrinsic value because M1 Free Cash Flow is very inconsistent and have negative growth for past 3 years.
 Discounted EPS Model
  • EPS Growth Rate = 3.6%
  • Discount Rate = 5%
  • 2008A EPS = $0.16771
  • Intrinsic Value = $1.56
 Regardless of which method to calculate the intrinsic value, M1 is over value (base on Discounted EPS Model and PEG ratio). The top line (Revenue) and the bottom line (Profit) are not growing significantly year over year. M1 is also losing out to her competitors SingTel and StarHub on the TV bundling services. Furthermore, the stock price moves sideway since the IPO.
 

Summary of my reasons for not to buy M1:

  1. No significant competitive advantage to compete with SingTel and StarHub in the long term.
  2. Sales & Profit are not growing significantly.
  3. Stock moves sideway so no great upside potential for capital gain.

I am avoiding M1 after this analysis because there are other better Telco companies to invest in.

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