Important time-tested proven market rules or tips
AYS - Buy on breakout from a symmetrical triangle
OTB
Publish date: Thu, 03 Feb 2022, 10:44 PM
Dear valued members,
Special note:
This is an educational program, stock selection criteria is based on TA and FA facts.
This article is strictly for reference only. It is not a buy recommendation. Never trust anyone as far as your investment is concerned. Please do your homework before you decide to invest. It is your money, you make your own decision and you are responsible for the final outcome.
I have a certain code of ethics when I write my article in I3.
If the article is beneficial to all the readers here, I will write and post it.
If it is harmful to the majority, I will avoid it at all times.
I have followed this code of ethics since day one when I posted my article in I3.
I want to make this report short and easy to understand.
My stock selection criteria
Below is my stock selection criteria, I want all of you to remember this keyword "UBS GMF".
AYS passed 6/6 of my stock selection criteria.
TA comes first
U - Up trending stock - Cross 200-day SMA - Passed
B - Breakout chart - Break above 0.67- Passed
S - Sector to focus - Cross 200-day SMA - Passed (Ind/Prod - Metal)
FA comes second
G - Growth > 206% per year - Passed
M - Margin of safety > 33% - Passed
F - Forecast current year EPS must be better than previous year EPS - Passed
Please note that I consider TA ahead of FA in my stock recommendation.
Enclosed are the latest technical charts of AYS (daily and weekly) for your perusal.
TA readings
- There is a symmetrical triangle formed in both the daily chart and weekly chart of AYS.
- The Parabolic SAR buy signal appeared on the daily chart on 26/1/2022.
- The share price of AYS breaks above 20-day EMA at 0.645 on 27/1/2022, it is a buy signal.
- The share price is above the "Golden Cross Buy" signal which is at 0.66.
- The share price showed a breakout from a symmetrical triangle.
- Parabolic SAR, Stochastic and Daily MACD buy.
- Daily MACD buy signal, both Blue and Red lines crossed above zero level.
- The share price of AYS crosses above 0.635 in the weekly chart which is the 20-week EMA.
- Parabolic SAR displayed a buy signal for 5 consecutive weeks.
- I believe the uptrend momentum is very strong for AYS and the share price is bullish.
- I believe the share price of AYS has gone through A,B and C corrections.
- I also believe the share price of AYS has gone through Wave 1 and Wave 2 correction.
- It is on the Third Wave up which is the strongest wave up among all the major 3 waves up.
FA report
AYS
Good Q2 2022 quarter results
- Please read the below link.
-
https://www.malaysiastock.biz/
Corporate-Infomation.aspx? securityCode=5021 - There are 4 consecutive quarter of growths in this stock.
- The Q2 2022 result is anticipated to be affected by MCO lockdown.
- The EPS of AYS for first half = 0.15, I believe EPS of AYS for the second half will be at least = 0.13.
- Total EPS for FY 2022 = 0.28.
FA report
- The Q1 2022 result showed record Revenue and PAT for this company.
- There is a strong growth of PAT and Revenue in Q1 2022 result. I believe all steel stocks will perform well in the next 2 years.
- Q2 2022 results of AYS was affected by MCO lockdown.
- Since there is no more MCO lockdown in the future, hence next 2 quarter results will be good.
- Steelaris, a subsidiary of AYS is a one stop steel centre in Singapore.
- This subsidiary is the expert in steel sourcing and project management services for offshore, construction and marine service in Singapore.
- In the FY2020 report, Steelaris contributed 60% of the profit of AYS.
- A stronger SGD and recovery economy in Singapore will benefit AYS.
- The steel rebar future price is trading at RMB4,778 today which is good news to all steel stocks.
- The Q3 2022 result to be released in February 2022 will be very good in view of high steel rebar price.
- The EPS in the last 2 quarter results is equal to 0.15, I still believe the next 2 quarter results will be good like Q2 results since there is no more MCO shutdown in Malaysia.
- I project EPS for 2022 is equal to at least 0.28, at 0.67, the PER is only 2.39 times.
- I like AYS because it is trading at a forward PER of around 2.39 times. It gives a total of 6.0 sen as dividend for a year. The dividend yield is around 10%.
Recommendation
- I spent the whole night reading through the financial report of AYS, I am very impressed with the growth of AYS. I do not want to miss out on this stock.
- TA of AYS is just coming out from consolidation, it is bullish now. It showed a breakout from a symmetrical triangle.
- I like the technical chart because the share price just crossed the "Golden Cross Buy" signal convincingly.
- The share price of AYS closed at 0.695 on 3/2/2022, I strongly believe the share price is still very cheap in terms of valuation.
- The share price of AYS has started to be bullish and I believe it will cross the resistance at 0.73 soon.
- I am very bullish on the share price of AYS, I believe the present share price is undervalued. The share price will skyrocket up the roof once the share price crosses 0.73 convincingly. I believe more investors will buy this stock once the share price is above 0.73 because the share price is confirmed to be on the Third Wave up which is the most impulsive wave.
- Once the share price is above 0.73, it is on the way to break the major resistance at 0.94.
- I believe the share price of steel stock will perform very well in the next 2 years because China is no longer exporting steel products below cost to the whole world.
- The share price of steel stock 20 years ago was very high because there was no dumping of steel products below cost from China. I believe the share price of steel stock will rise up slowly and surely in the next 2 years.
- I believe Covid-19 pandemic is slowly recovering in 2022 because of the effective vaccines. Once Covid-19 pandemic is under control, all industrial nations worldwide, especially European nations and the US will start to spend money on infrastructure, it will boost up the usages and the selling prices of steel products.
- US President Biden's infrastructure plan will cost USD 2.2 trillion. I believe the steel products worldwide will be in a bullish uptrend for the next two to three years. Hence I have very high hopes for steel stocks listed in KLSE since China is no longer dumping steel products below cost in the world markets.
- AYS has very good fundamentals if you read the financial report in great detail. I am very impressed by the strong growth of Revenue and PAT in Q1 2022. I believe the good FA of AYS will justify the share price to be at least at 1.00 in 2022.
- Buy and hold will be a very good strategy to win big on this stock.
- AYS is no longer a penny stock after 2022, the Revenue is more than a billion in 2022.
- I am recommending a Buy on AYS and I will set my initial target price at 1.00 in 2022.
- I recommend buying AYS around 0.67 level. If you buy at 0.67, the potential gain is 49%.
The final decision to buy is always yours.
Thank you.
Ooi
寧可天下人負我, 休教我負天下人
Disclaimer :
This is an educational program, stock selection criteria is based on TA and FA facts.
Please be informed that the aforesaid stocks are solely for the purpose of education only ; it is neither a trading advice nor an invitation to trade. For trading advice, please speak to your remisier or dealer representative.
The final decision to buy is always yours.
My FA report
Enclosed is my FA report for your perusal.
The target price in my FA report is 1.67.
| AYS VENTURES BERHAD (5021) Intrinsic Value calculation | ||||
| KLSE stock selection criteria | ||||
| EBIT growth (%) | >10% | 123.14% | ||
| EPS growth (%) | >10% | 205.76% | ||
| PER | <10 | 4.39 | ||
| Description | Financial Year End : 31/03/2022 | |||
| Year | STD | 2021 | 2022 Q1 | Growth |
| Stock name | AYS | AYS | ||
| Share price | 0.67 | 0.67 | ||
| No. of shares | 380,420 | 380,420 | ||
| Market cap | 254,881 | 254,881 | ||
| Sales | 753,658 | 908,923 | 20.60% | |
| Net profit | 19,004 | 58,107 | 205.76% | |
| EBIT | 41,726 | 93,109 | 123.14% | |
| EBIT Margin | 5.5% | 10.2% | 85.03% | |
| Interest Cost | 12,802 | 11,097 | -13.32% | |
| Interest Coverage | >9 | 3.259 | 8.390 | 157.43% |
| EPS | 0.050 | 0.153 | 205.76% | |
| P/E | <=10 | 13.41 | 4.39 | -67.29% |
| Current Assets | 573,656 | 631,537 | 10.09% | |
| Total Asset | 707,311 | 764,229 | 8.05% | |
| Equity | 277,462 | 309,906 | 11.69% | |
| Current Laibilities | 393,094 | 411,793 | 4.76% | |
| Total liabilities | 428,689 | 447,367 | 4.36% | |
| Property, plant and equipment | 82,099 | 81,497 | -0.73% | |
| Stocks | 278,048 | 311,613 | 12.07% | |
| Receivables | 238,639 | 283,421 | 18.77% | |
| Payables | 93,983 | 118,998 | 26.62% | |
| Current Ratio | >1.8 | 1.46 | 1.53 | 5.09% |
| Quick Ratio | >1.4 | 0.75 | 0.78 | 3.31% |
| Borrowings | 308,163 | 315,234 | 2.29% | |
| Minority interest | 1,160 | 6,956 | 499.66% | |
| Cash & Securities | 31,483 | 36,503 | 15.95% | |
| Cash per share | 0.08 | 0.10 | 15.95% | |
| Net Debt | 276,680 | 278,731 | 0.74% | |
| EV = Market Cap + Mi + Borrowings - Excess Cash | 532,721 | 540,568 | 1.47% | |
| EV/EBIT | <8.0 | 12.77 | 5.81 | -54.53% |
| Earnings Yield | >12% | 7.83% | 17.22% | 119.90% |
| NTA | 0.73 | 0.81 | 10.96% | |
| Change in inventories | (+) Decrease | 58,020 | 47,585 | -17.99% |
| Change in receivables | (+) Decrease | -33,625 | -103,742 | 208.53% |
| Change in payables | (+) Increase | -16,198 | 26,702 | -264.85% |
| Cash Flow From Operation (CFFO) | >Net profit | 45,916 | 59,528 | 29.65% |
| Free cash flow | >10% sale | 61,094 | 59,656 | -2.35% |
| Proceeds from borrowings | 15,419 | 6,909 | -55.19% | |
| Repayment of borrowings | -74,808 | -74,808 | 0.00% | |
| Dividend (cent) | 0.00 | 1.50 | ||
| Dividend Yield | 0.0% | 2.2% | ||
| Net profit margin (N.profit/sales) | >8% | 2.52% | 6.39% | 153.53% |
| Asset turnover (sales/t.asset) | >0.5 | 1.07 | 1.19 | 11.62% |
| Financial leverage (Total asset/equity) | <2.0 | 2.55 | 2.47 | -3.26% |
| ROE | >10% | 6.85% | 18.75% | 173.75% |
| Price/Book Value | <1.5 | 0.92 | 0.82 | -10.47% |
| Method 1 | ||||
| Target price (EV/EBIT=12) | 0.59 | 2.19 | ||
| Current Price | 0.67 | 0.67 | ||
| Margin of Safety | -14.36% | 69.35% | ||
| Potential gain | -12.56% | 226.28% | ||
| Method 2 | ||||
| EPS | 0.153 | |||
| EPS growth rate | 2.06 | |||
| EPS(8.5+2(EPS growth rate)) | 1.93 | |||
| Current Price | 0.67 | |||
| Margin of Safety | 65.23% | |||
| Potential gain | 187.60% | |||
| Method 3 | ||||
| (22.5*EPS*Book value per share)^0.5 | ||||
| EPS | 0.05 | 0.15 | ||
| Total equity | 277462 | 309906 | ||
| Number of shares | 380420 | 380420 | ||
| (22.5*EPS*Total Equity/share)^0.5 | 0.91 | 1.67 | ||
| Current price | 0.67 | 0.67 | ||
| Margin of Safety | 26.00% | 59.96% | ||
| Potential gain | 35.14% | 149.74% | ||
| Checklist | STD | Actual | Remarks | |
| PE Ratio | <=10 ; ≠ -ve | 4.39 | Good | |
| ROIC (Equity) | >12% | 15.82% | Good | |
| ROIC (Asset) | >12% | 16.70% | Good | |
| ROE | >10% | 18.75% | Good | |
| CFFO > 50% Net Profit | > 29054 | 59,528 | Good | |
| Price to CFFO | <=15 ; ≠ -ve | 4.28 | Good | |
| Free Cash Flow > 30% Net Profit | > 17432 | 59,656 | Good | |
| Price to Free Cash Flow | <=20 ; ≠ -ve | 4.27 | Good | |
| Cash Yield | >4% | 23.41% | Good | |
| EV/EBIT | <8.0 | 5.81 | Good | |
| Earnings Yield | >12% | 17.22% | Good | |
| Price / Book Value | <1.5 | 0.82 | Good | |
| Debt to Equity - (T.debt/T.equity) | <=0.5 - 1 | 1.44 | Bad | |
| Net Debt to Equity | <=0.5 - 0.8 | 0.90 | OK | |
| Net Profit Margin (N.profit/Sales) | >8% | 6.39% | Bad | |
| Asset Turnover (Sales/T.asset) | >0.5 | 1.19 | Good | |
| Financial Leverage (Total asset/Equity) | <2.0 | 2.47 | OK | |
| Interest Coverage | >9 | 8.39 | OK | |
| Current Ratio | >1.8 | 1.53 | OK | |
| Quick Ratio | >1.4 | 0.78 | Bad | |
| Current | Target | Gain % | ||
| Actual Price | 0.67 | 1.67 | 150 | |
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
sensonic
WELL SAID,I WILL INVEST 1 MIL ON IT.
2022-02-03 23:47