CIMB on the uptrend and its call warrant.

This week share market volume has hit 3 bil with lower liner and ace counter taking lead on top volume counter list. There is also a lot of movement on blue chip counter such as Bursa and Public bank but not CIMB. CIMB has only just started to move with a small pace. CIMB recently just hit the bottom on 30 jan 2012 with price of RM6.85. This counter only started to move up which closes at 7.21 on 10-FEB-2012. This is just a gain of 5% on from the bottom of RM6.85. From the candlestick chart and RSI chart show that CIMB is just started on the move and still on the uptrendTo make maximum capital gain on CIMB, it is best to invest on its call warrant CIMB-CQ and CIMB-CR. These 2 call warrant only friday close at 0.115 and 0.12sen which worth buying with expire date on SEP-2012 and Dec-2012. With current rally on the market and previous highest close on CIMB on RM9.00. This round CIMB can easily hit RM7.50 to RM7.80, with call warrant can easily reach 0.15sen. This will make up a 40% gain on the call warrant with current closing. So is this worth jumping into ? You should decide.

Happy investing to all.

Decoding the financial ratios

Before we start to invest in a company, the best we should have read through theirs accounting reports. It is always is a difficulty for the lay person or people not from financial field. There a few Ratio that are important to investment decision making that derive from the accounting report.

1)Debt-to-equity ratio

DER shows how much a company's capital is dependent on external borrowings.Total liabilities and total equity can be found in its statement of financial position. Although this is not an all conclusive ratio, with an entity with a high DER can be vulnerable to economic downturn. On the flip side, a high DER company can also suggest that the company is expanding, so look for the information on its outlook and plans.

2)Operating Cash Flow

A healthy cash flow allows a business to meet its payments and keep its business solvent and operational. A company can report a net loss and still be in positive cash flow and vice versa. If a company that keeps reporting profit with shrinking cash flow or negative cash flow. This mean the company is not collecting their profit or just keep selling and not collecting. This kind company should be in a no no list for investor.

3)Earnings per share (EPS)

EPS is commonly used to indicate how profitability is a company. It shows how much profit the company is making for each share you own. A EPS of 2o meant , each share the company you hold it is making earning of 20sen. A small pay up capital company might have high EPS while a big corporation might have a low EPS. A financial company RCE CAPITAL might has a higher EPS then LION Corporation and vice versa. EPS is all depended on the Paid up capital and the paid up capital might change due to Right issue or bonus issue. EPS should be adjusted accordingly after the Right issue or Bonus issue. If a company have outstanding warranty,employee stock options or convertible loan stocks, this will also dilute the EPS of the company. Adjustment also be made accordingly.

4)Earnings before interest, taxes, depreciation and amortisation (Ebita)

Earnings, taxes and interest is found in a company's statement of comprehensive income. Depreciation and amortisation figures can been seen in the cash flow account. Ebita is way to tell whether a company is creating value for the shareholder. This figure should be positive and increase year by year. Ebita shows how much money a company made, while operating cash flow shows how much it has actually collect.

5)Return on equity (ROE)

ROE measures how much profit a company has generated with the money that shareholders has invested. The shareholders equity is the total equity that can be found in company's statement of financial position. Meanwhile, net profit can be read in the income account. ROE is an indicator how well a company capital is being reinvested. It also an indicator for how well the company is creating value for its shareholders.

6)Price - Earning Ratio (PE)

This is most common ratio and most used ratio by analysts and fund managers.
It shows how much investor are willing to pay for every dollar of a company earnings. Some analysts or fund managers are using projected PE on their analysis. As for some , they uses previous earning as the calculation on the PE.
Anyway of calculation is depend on the way we look at company earning.
For one thing for sure , the lower the PE is better as what Warren Buffett will look at. As for me ,I will definitely will look a company with PE of 10 and below.
On the market average ratio KLCI index was in PE of 16.92 , Singapore Straits Times index' 10.59 and the Thailand Stock exchange index's was 17.40 .

Is Bursa a good buy after 7-July-11 Rally?

With the Rally already over without much damage or riot in Kuala Lumpur, the Bursa Malaysia will be in good footing. I have monitor Bursa and is call warrant for sometimes. Look like the Bursa has already hit the bottom on 27-June-11 with closing of RM7.50.
Can the Bursa will go down further?.. not really.
It is on up trend now, with closing of RM7.75 on 8-July-11. With the market started to recover last week, bursa will benefit with the volume increase. Estimated Bursa will move up to RM8.20 on first resistance line.
To move in line with Bursa and the current market, Bursa-CT will mostly is the best exposure to Bursa counter. With current price of RM0.06sen, this has translate to a premium of 5% against the ex-price with expire date on 20-Jan-11. This is worth calculated risk to invest with. If bursa can go up to RM8.50, Bursa-CT will be worth about 10sen. This will a 80% gain. Is this a worth invest counter? What Say You

My thought On Bursa-CO

Let look at Bursa-CO closing at Friday 1-Oct-2010. Bursa closed at RM8.17 and Bursa-CO closed at RM0.12. Bursa-CO will expire on FEB-2010 which 3 month from now.

The strike price of RM7.7 with ratio 10:1. If today closing price of BURSA RM8.17, Bursa-CO is over value by 73sen (RM8.9-RM8.17).

In 3 month time Bursa able to move to RM8.50 . Bursa-CO still over value by 40sen on current closing price of 12sen. Bursa-CO will be in the money when BURSA is higher than RM8.90. But now there is another Bursa-CQ , strike price at RM7.80 with ratio 8:1.

Is it still worth Risk holding this Bursa-CO when is still left 3 month to go?
Will Bursa move up more than RM8.90 in 3 month time?

Base on the candlestick chart, Bursa-CO is start moving downward starting on 22-Sept-10.

Even, RSI chart do show the same downtrend .

For me the risk is too big for me to continue holding on. What say you?

How I going to ride thru this KLSE bear market

The new RAT year has just begin on 7-Feb-08 and US share market look not so good with more negative news popping out one by one. To continue to be in the KLSE market, I already turn 1/3 of the my equity holding to good old cash. I fore see a downturn coming back on last year 2007 December, when I browse thru the newspaper, where most of the Mesdaq counter already drop to year low. Only left that not hit is the Blue Chip and index link counter.

Now with the Chinese New year celebration ending next week and election coming on the early month of March, the share KLSE sure will go in to correction a month or two or three. I think it is a right times to window shopping for undervalue stock.

With US economy in to slow mode and world economy following behind soon, hence Oil price had started coming down last week. On Wednesday CNBC reporting US gasoline price is coming down and survey showing more people believe in a downturn oil price because of increase inventory. OPEC not reducing oil output in short term, I really believe oil price will move down to US65 till US68 area in this one or two month.

To benefit from this oil price downtrend, best is jump into oils depended company such as Airline and plastic related company. I’m looking forward to Airasia and Titan for cheap entry. I’m at looking to at price of below RM1.55 for Airasia and below RM 1.40 for Titan chemical. In this coming quarter might not see any great figure but the real benefit will only pop up on the June quarter reporting on August 08.

With the cash I having, not only growth stock should be consider, I also looking into

dividend stock to ride thru this bear market. With 8 to 10 percent return base on dividend yield is better than FD on Malaysia Bank. There few counters that can out perform the FD and REIT in KLSE. Try Ccmdbio, Yilai and Uchitec, they provide 35sen , 12sen and 20sen dividend last year. This make out about 13% dividend yield base on Friday closing for CCMDBIO Rm 2.59, 12% didvend yield for Yilai RM1.04 and 9% dividend yield for Uchitec RM2.09.

So all the best to those who read this article, hopefully the world economy will go downturn as I expected. But we should expect the worse to happen and get prepare. Having Investing !!