When sanity returns

When sanity

returns

According to a Goggle search, the meaning of SANITY is explained as the  the ability to think and behave in a normal and rational manner. What it means is that for one to do something or to make a decision for something,  one must be in a state of sanity so that a better decision is derived.

But during the times of chaos or crisis happenings, many people actually act in the opposite of sanity. They panic, act irrationally and become insanity with their actions and decisions.

One of the most common places to find insanity is actually in Bursa Malaysia. And these insanity situation happens from time to time each time a major crisis develops.

It is during these time of panic caused by those insanity people that those with sanity state of mind are likely to make a better and wiser decision that will ultimately tilt in their favours over a period of times when finally ... sanity returns.

Just a few months back at the height of world market crash where even at one time the Dow Jones dropped over one thousands points on the opening bell before  crawling back for some recovery. Even our Composite Index dropped by some forty points on certain days.

It was during those panic-stricken times that many investors lost their nerve and dump their shares in massive drove and sellers simply overwhelmed buyers all days through, even though it is common knowledge amongst investors that investing is all about the strong fundamental of a company that will dictate the share price.

But when the majority of sellers become insane on that day, and genuine sanity buyers are few, prices can be swiftly pressed down to unimaginable levels. It is during those moments of madness that the real long term investors will dare to pick up some shares at heavily discounted price.

One of those incident was when the bad news hit Supermax Corporation Berhad about the insider trading issue related to APL Industries Berhad (APLI). The share felled to unbelievable price under such great ferocity selling and I was those lucky brave ones to pick up at RM1.67 the very next day (on Dec 16, 2014). It hit a 52-week low of RM1.58 on Dec 15, 2014. Since then, the current share price has recovered  superbly to close at  RM2.96 on Dec 17 following bouts of rallies accompanied by some encouraging corporate news.

Another of my 2015 favourites, Focus Lumber Berhad reported an excellent 2nd Qtr results of 7.8 sen compared to its 1st Qtr of 3.22 sen. But due to such extreme weak market sentiment on that day where the Composite Index dropped over 40 points, "insane" sellers ditched such a good cash rich company for a cheap price. Despite having 31,000 shares before this, I still could not resist such a fire bargaining sale and picked up 5,000 shares at RM1.46 plus.

As a matter of fact, on that day and some other days, market behaved in a very irrational way for many companies. I have to believed Focus Lumber shares must be one unjustifiably sold at a song on that day.

All because many strong hearted investors lost their sanity and courage  on that day .....

But as time is always a healer and a good judge, another few months down  the road, when companies started to announce results again and market sentiment has returned to sanity level, the share prices of good fundamental companies also begin to find its justified levels.

When Focus Lumber announced its 3rd Qtr results on Nov 17 with an even better sequential results of 9.35 sen and an almost 100% increase dividend payout (10 sen dividend followed by an earlier interim dividend of 5 sen), "sane" investors chased after the shares from the next day onwards resulting in a gain of 23 sen to RM2.68.

Since then, Focus Lumber has constantly traded at the RM2.70 - RM2.80 range although it touched a high of RM3.00 on Nov 24, 2015.

The share price of Focus Lumber has even surpassed YSP Sah and Signature International Berhad right now. Refer to my previous blog on Sep 13, 2015 titled : The Power of Market Sentiment.

At that time, on YSP Sah was traded at RM2.53 on Aug 19, Signature was traded at RM2.36 on Ag 24 and Focus Lumber was just traded at RM1.51 on Aug 21, 2015.

Fast forward to another three months and another set of quarterly results and the share price of these three mentioned companies are as followed  on Dec 17.

Focus Lumber is at RM2.77 on Dec 17, 2015.

(Up by a whopping RM1.31)

YSP Sah is at RM RM2.47 on Dec 17, 2015.

(Down by 5 sen)

Signature is at RM RM1.88 on Dec 17, 2015.

(Down by 13 sen)

What does this tell you?

From my point of view, it says that when the market sentiment has returned and most investors has recovered from insanity, a better decision to base a fairer value of a particular company based on its fundamental points from a vastly majority of investors will surely accord a fairer value share price.

Buying 10,000 shares

of NTPM Holdings Bhd

on Dec 17, 2015

It has been a long time since I bough a new stock. Many times I have been frequently asked if there is any good stock to buy. Well, here it is this "premier tissue and toilet paper' company called NTPM Holdings Bhd. Perhaps I shall share some of my reasons why I am buying some shares of this company in my future blogs, most probably in 2016.

As this probably is my last blog for 2015, I like to thank all those readers/followers/email fans/supporters who have been with me throughout the year and since this blog's inception.

I like to wish you a very Merry Christmas and a very wonderful 2016!

Mercury springs a pleasant surprise

Mercury springs

a pleasant surprise

Malaysia's second largest car paint maker Mercury Industries Berhad recently sprang a pleasant surprise news for its shareholders when it announced its 3rd Qtr results.

Mercury announced a strong set of results, achieving an earning per share of 5.02 sen, which must be the highest ever recorded since 2012. Compared to its 2nd Qtr 2015 results of only 1.95 sen, it is indeed a remarkable turn-around one.

As we recalled, Mercury had already diversified into the construction business a few months back, acquiring a 70% stake in a inter-related deal, construction company PBSB.

At that time, I was a little sceptical about Mercury's diversification as I normally prefer the companies I invested to focus more or solely on their main strong business/products.

However, this time, the diversification of Mercury seemed to have paid off so far. According to its 3rd Qtr report, its PBSB, the construction arm of the Group contributed a revenue of RM12.47 million and a pretax profit of RM2.64 million. This good profits helped to offset its other business segment i.e. its paint business which reported lower revenue and lower pretax profit.

The decrease in revenue can be attributed to the slowdown in consumer spending due to the weaker Ringgit and lower commodities prices. Also the higher cost of goods and services arising from the implementation of the Goods & Service Tax (GST).

The decrease in pretax profit was mainly attributed to the expenses incurred for the acquisition of PBSB even though it was partially offset by forex gain.

Going forward to the next several coming quarters, will the construction division continues to deliver strong consistent earnings that will boast up the overall earnings of Mercury?

I do not know. I don't own any construction stocks before because I am sometimes confused with the accounting way of construction companies. Sometimes the results are excellent in this quarter, but poor results in the next quarters due to sort of unbilled billings or unrecognised earnings, it is quite confusing for someone like me.

Once these ways of accounting confused me, I am unlikely to invest. But in the case as I have been one of advocator for Mercury as early as the beginning of my blogs in 2013 and has been challenging/inviting you to join in the wagon, I will stick to my investment.

Besides, Mercury has been paying steady dividends since the last four year. The dividends received were 8 sen, 8 sen, 10 sen and 6 sen in 2012, 2013, 2014 and 2015 respectively.

These rate of dividends is considered high as Mercury's share price is normally traded between 1.15 - 1.50 range. As long as the dividends are maintained for the next few years, I really have no qualm if the share price continue to even languish at this ranging price.

What about you whom might have joined in the party for Mercury shares after being "brainwashed" to invest? Sorry, I used the word "brainwashed" as only a joke. I know most of you are sort of experts in your own way when it comes to analysing stocks.

Again, I believed some might have sold off, some might still be hanging on. But I am still holding on as long as the two divisions of Mercury can continue to earns profits over the next several years. It means that the dividends will continue to be credited into my banking account.

Profits in hands that turned into paper loss

Just recently I share about the dilemma of not taking profit when there is paper profits to be realised into actual cash profit. I shared about the anxiety of investors whether taking profits too early is a wise decision or not.

Well, I am now regretting my decision for not turning paper profit into cash profit for one of my mentioned stocks, APM Automotive Holdings Berhad, a cash rich company and also a subsidiary of its parent company, Tan Chong Consolidated Sdn Bhd. Tan Chong owned 32.47 % of APM.

APM was featured on Sept 30, 2013 titled : A Tale of Two Automotive Companies

Bought by yours truly at RM4.66 on Nov 29, 2012, APM went on to as high as RM6.40 on May 12, 2014 riding on the good sentiment of the market.

However in recent times, its quarterly profits has been declining as evidenced from its reducing dividends payout. Hence, the share price followed in tandem and is now trading at below my original price.

If you care to check, it closed at RM 3.93 on Dec 10, 2015.

Why I didn't sell when it was starting to report declining profits? Why I did not take at least some profits when there was time to do so? Or was I still hoping there would be a turn around of fortune for APM? Or maybe I did not pay attention to it as I was focusing on others?

I really don't have the answer. All I can say is I am now sitting on paper loss and I hope the paper loss would not balloon to a bigger one.

Tek Seng's Shining Solar Business

Tek Seng's Shining

Solar Business

Every now and then, there will be a "Seng" roaring back into the spotlight on Bursa Malaysia. It used to be cash-rich & asset-rich Keck Seng Holdings Berhad and biscuit maker Hup Seng Industries Berhad.

Both these two companies hogged the limelight for long periods. I should know because Hup Seng was my maiden post while Keck Seng remained one of my favourites having seen it being written from time to time.

It was then sometimes back that one "Seng" shot back suddenly when the two main Sengs were going through a period of quietness.

If you remember, Tek Seng Holdings Berhad was first featured in my blog : Every "Seng" has its day on Aug 15, 2014. Subsequently there were features of Tek Seng now and then. The reasons were Tek Seng at that time was gaining lots of attention due to its involvement in the solar business.

At that time, the Taiwanese giant solar company Solartech Energy Corp. (SEC) was taking up an equity interest in a joint-company called TS Solartech Sdn Bhd with Tek Seng.

Investors reacted positively and swiftly to this corporate exercise and Tek Seng's shares were chased up accompanied by high volumes for weeks and months. Also in the pipeline was Tek Seng's bonus warrant shares exercise where a warrant was given for every two shares.

Such frenzied buying pushed Tek Seng's share price to peak at 93 sen on Jan, 9 for the ex-date to qualify for the warrant shares. On Feb 10,  Tek Seng warrant debuted and touched a high of 48 sen.

But the first two quarters of not so impressive results saw the declining interest in both mother and warrant shares. On Aug 25, Tek Seng hit a low of 35.5 sen while its warrants touched 15 sen on Aug 16.

At that time, many investors including yours truly must be regretting for not taking profits before the ex-date of the warrants shares.

However towards the beginning of Oct, buying interest return to Tek Seng. Investors must have sniffed something judging by the continuous buying that sent its share price up steadily culminating on the first week of Nov when it announced its 3rd Qtr results.

What caught the investors's eyes was the turn around of its solar business which has become the major contributors to the group's revenue and profit as well! The Solar division contributed 56.1% towards the current quarter and profit before tax by RM9.2 million compared to RM7.5 million.

Strangely again, Tek Seng's other four divisions, Sheeting, PP Non-Woven, PVC Leather & Others also continue to record decreasing in profit before tax. In the past, the Sheeting Division used to be the major contributor when it comes to profit before tax.

So is finally Tek Seng's solar division going to see brighter shining light at the end of the tunnel in months to come? It looks that way judging to some reports when all its eight production lines are up and running, it is going to sell even more of its products.

Currently Tek Seng has been ramping up its production lines. By year end, there should be four lines running. There are plans to install another four more lines although that would take some times.

Between now and that time, will the market be flooded with new supplies as there seem to be some aggressive expansion by a few other players in the market globally.

Tek Seng investors would surely hope not. When there is over supply, prices not only drop, sometimes it will drop below the production cost as well. That is the reason many times an big glut of supplies exceeded market demand for long periods, some smallish companies could not withstand the competition anymore and hence, folded up or over taken by some stronger and larger competitors.

Yours truly is still keeping the 15,000 shares of Tek Seng. Also yours truly has been rewarded with 7,500 shares of warrant since the end of last year. Also already in my pockets are dividends totally RM2025.00 for all those years of keeping the shares. Any surge in its mother share will correspond with a similar rise in its warrant shares.

What a sweet double delight at the moment for yours truly to have a bit of business in solar business!!

A Belated Sincere Apology

to all my Hindu friends

Since I started this blog, I have made it a point to time my posting of blog nicely to ensure that each time a festival season is due, there would be a wishing from yours truly.

But for the first time, I did forget to wish my Hindu friends A Happy Deepavali wishing prior to my blogs posted before Deepavali day.

I guess as one gets older or "senior", one tends to lose memory easily. I can safely testify on this because I have been experiencing forgetfulness more often compared to my days before surpassing the golden age of 50s.

So I humbly apologize to all my Hindu friends, readers, followers and supporters for my belated wish.

always win on November 19, 2015

in an email asked :

What stocks are you currently holding. Could I also know your cost?

Dear always win,

Surely you have a marvellous name, always win or in Bahasa, Selalu Menang. Just joking, but I really like this name. This type of name is indeed seriously needed as a good omen when it comes to investing.

Jokes aside, I still have a number of  counters left or 'unlisted" on my blog. When I say "unlisted', I mean I have yet to share it with all my readers. Of course there are very few losing counters as well. The lucky thing is that these very few losing counters were bought at very small quantities only.

From time to time, I would be "listing" the counters in my future blogs.