Raffles Education: Is it Really Bottoming Up?

Technically base on chart pattern RafflesEducation is finding a bottom at $0.28. If (and a BIG IF) RafflesEducation can turn around in the next few quarters and improve the financial performance, this price level is very attractive.

However current financial performance of Raffles Education is getting WORSE quarter over quarter. The Net Operating cash flow turns from bad to worse for the past 3 quarters (From $48 million in Sept 2009 to $580k to NEGATIVE $6.7 Million in Mar 2010).

ROA degraded from 16 to 10 to 4.
ROE degraded from 30 to 26 to 10.
Current Ratio is 0.9 shows that the company has liquidity problem (not surprising because in Mar 2010 quarter, the company burned $6.7 million cash per quarter)

The company performance has been really bad for the past one year. Not the right time to make any entry now until the Raffles Education publishs the latest financial performance. Need to see whether there is any improvement quarter over quarter.

If the financial result is bad, the stock price may go even lower than $0.28!

This Post Has 3 Comments

  1. Twofeathers

    Great writeup on Raffles Edu. I was stuck in this counter for a long time until I decide to take a painful but necessary step to cut loss and move my money else where. Like you I have lost lots of money listening to ‘recommendation’ until I take action to DIY. I started with fundamentals, reading financial statements and so forth but still lose money. Then I move on to technical analysis and still lose money. The biggest hurdle is the emotion management which is the starting point of the BADHAFI strategy (Buy, Average Down, Hold And Forget IT). That is when I said enough is enough. I decided to write my own trading software and trade according to my rules. The last two months I made only 12% in total but finally I am in control. Good luck to you and me. 🙂

  2. Marubozu

    I agree to your comment. We need to DIY our trading and investing styles after learning all the news reading (there is also an art on how to read the news!), FA and TA + our discipline + our emotion control + our own rules + our own pain threshold + our bullets before we can start making money…

    Each individual is different. There is no one software to fit all. For those who trust and depends on the software to make your trading decision, please think twice. Software trading is base on LOGIC but your buy / sell decision is based on your emotion and your own personality. Machine can NEVER take over human emotion otherwise the whole share market is full of machines and very much predictable, but it is not predictable in real share market.

  3. RL

    I would suggest taking note of the 12/07/2010 high at $0.34, and making sure that the MACD-histogram does not trace out a bearish divergence, before committing to a buy.

    However, if there is a bearish divergence on the MACD-histogram, then I think it will be a good signal to open a short position.

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