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Special Report: Hidden hands behind penny stock surge
Edge Weekly
Special Report: Hidden hands behind penny stock surge
By The Edge Malaysia / The Edge Malaysia
30 Sep 2020, 06:00 pm
Updated - 08:45 pm

main news image
This article first appeared in The Edge Malaysia Weekly on September 21, 2020 - September 27, 2020

ASTUTE market observers would have noticed on the local bourse a group of individuals, supposedly acting in concert, who have amassed shares in more than 20 publicly traded companies. These companies — linked via shareholding and directorships — are often on the most actively traded list, with huge, fluctuating share prices.

“It (the companies) is all linked to the same person; usually, the most actively traded list on a daily basis involves these counters,” one source says when asked which are the companies that are linked.

NVIDIA

Forecasted High Price: 1,187.4 Minus Forecast Low Price: 298.3

Buy Zone: 298.3 to 520.6
Hold Zone: 520.6 to 965.1
Sell Zone: 965.1 to 1,187.4
Current Stock Price of 853.64 is in the HOLD Zone.

Yields jump, futures plunge.

Core CPI YoY 3.8% vs 3.7% EST.

(March Inflation data hotter than expected)

Interest rates differential between US and Malaysia widen.

US$ will strengthen against the MYR.

For every transaction, there is a seller and there is a buyer. The seller thinks the share price will go down in future, the buyer thinks the share price will go up in future.

The rational investor, analyses the business of the company and comes to an intrinsic value for this stock. Then he/she acts accordingly, and to him/her, rationally. :-)

Price has risen a lot over last 2 weeks.

pang72 is bullish
calvintaneng is bearish

34.500

Volume 217,300
VWAP 34.459
Change 1.140 (+3.4%)

Trade Value 7,487,918

7.6.2012

Here are some examples of KLSE listed companies that have grown their earnings over the last 5 years. Their earnings (green lines on the chart) have doubled or almost doubled over this period. Therefore, assuming you have paid the fair PE for these stocks, your capital appreciation on the stock price would likewise have shown the corresponding gains. Investing can be as simple as this: invest into good quality growth companies at fair or bargain prices, and holding them forever, unless their business fundamentals deteriorated permanently.

Stock Performance Chart for Dutch Lady Milk Industries Berhad

Stock Performance Chart for Padini Holdings Berhad

Stock Performance Chart for Petronas Dagangan Berhad
Lastest EPS of PetDag was 91 sen.

Stock Performance Chart for Nestle (Malaysia) Berhad

Stock Performance Chart for Guinness Anchor Berhad

Stock Performance Chart for LPI Capital Berhad

Stock Performance Chart for Public Bank Berhad

Stock Performance Chart for Guan Chong Berhad
Guan Chong has shown rapid growth over the last year.
Do not expect this growth rate to be sustained at the same level.
It doesn't have the same level of quality as the other companies above.


How many of these stocks do you need in your portfolio?
Over-diversification will lead to attenuation of your potential gains in your portfolio.

THURSDAY 7 JUNE 2012

The Reasons You Should Invest in Quality Growth Companies for the Long Term. Illustrated examples.

The reasons you should review your philosophy and strategy in stock investing:

1. You can create wealth only by adding value to resources or by providing a service of value.
2. Only investments in active businesses are capable of adding value.
3. Owning a business, though very rewarding, is expensive and risky; but owning shares in a variety of successful businesses eliminates most of the risk while retaining most of the reward.
4. Buying the stock of quality growth companies and holding it for the long term provides substantial, predictable returns.
5. Short term trading (BFS/STS) is unpredictable and stacks the odds against you, because it relies upon winning at some loser's expense and because there's no assurance that you won't be the loser.
6. The benefits of long-term investing include carefree portfolio maintenance, the potential to double your money every five years, the deferment of taxes, and the fact that there are rarely any losers.



Let's review the simple mathematics that makes this method work:

1. Assume that 15 times earnings is a fair multiple for a good company and that the company earned $1 per share last year.
2. You will therefore pay $15 for the stock.
3. In five years, the earnings will have grown to $2 per share.
4. At 15 times earnings, the price will then be $30.

The value of your investment will have doubled - in five years!


Hopefully you're satisfied with the logic behind this investing approach and can see its advantages.

Let's dispel any doubts you might have about whether you can be successful.



The best way to minimize the risk is to invest in good quality companies for the long-term, expecting not to make a killing but to earn as much as good quality companies are capable of earning for their shareholders.

I have committed many mistakes and errors too. These resulted in permanent losses. Learning from these mistakes is humbling and yet rewarding.

By always focusing on the risks and the downsides ( keeping losses small), the upside takes care of itself.

WEDNESDAY 20 SEPTEMBER 2023

Comparing Farm Fresh with Dutch Lady
Market cap of Farm Fresh (RM'000) 2,283,742

Market cap of Dutch Lady (RM'000) 1,433,600


Farm Fresh
Adj PER – Latest 45.35
Dutch Lady
Adj PER – Latest 14.03

Performance Info
Farm Fresh
ROE - 5 Yr Avg10.56
ROE - Latest FY 7.94
Dutch Lady
ROE - 5 Yr Avg 62.91
ROE - Latest FY 11.66


Farm Fresh
Latest YR D/E 0.55
NAB/Share (RM) 0.34 Latest PX / NAB 3.59
EV/EBITDA 25.43
Dutch Lady
Latest YR D/E 0.02
NAB/Share (RM) 6.20 Latest PX / NAB 3.61
EV/EBITDA 14.72

FOMO - fear of missing out. (BUYING IN A RISING MARKET driven by GREED)

FOCO - fear of crashing out (SELLING IN A FALLING MARKET driven by FEAR).

After the sharp rise, profit taking activities appear.

These are stocks where I have conviction their earnings in the next 5 to 10 years will be a few times higher than today. For these stocks, and only for these stocks, you should love the market when it's price falls.

I am "overjoyed" when a stock price drops.
I am "heart-broken" when a stock price rises.

These are particularly true for those stocks I am holding long-term.

Dutch Lady - FY23 – End with a Strong Numbers

kltrader
Publish date: Wed, 21 Feb 2024, 05:07 PM
Maintain BUY (TP: RM27.00). Dutch Lady's (DLM) FY23 core net profit jumped by +26.4% YoY to RM131.5mn (excluding transition-related one-off costs of RM59.1mn), which is above our expectations, accounting for 132%. The deviation from our expectations was mainly due to lower-thanexpected operating costs, primarily driven by low raw material as well as distribution and marketing costs. DLM's 4QFY23 core net profit surged to RM54.7mn (+55.9% QoQ), driven by a softening in dairy raw materials prices, lower other operating costs, and a lower effective tax rate. We are positive on DLM's outlook, underpinned by robust demand for dairy products, stabilizing dairy raw material costs, and improving operational efficiency. We maintain our forecast at this juncture, with a BUY call and TP of RM27.00, based on DDM valuation (WACC: 7.5% and TG: 1.5%).
Key Highlights. DLM’s 4QFY23 revenue fell to RM364.5mn (-2.2% QoQ, 0.8% YoY) primarily due to an unfavourable product and channel mix. However, core net profit surge to RM54.7mn (+55.9% QoQ, +119.6% YoY), driven by softening in dairy raw materials prices, effective cost containment (especially promotional expenses) and a lower effective tax rate of 12.9% (-20.7 ppts QoQ). Consequently, the core net profit margin increased to 15% (+5.6ppts QoQ, +11.5 ppts YoY).
Earning Revision. Maintain forecast at this juncture.
Outlook. We are optimistic on DLM for its stable revenue growth driven by consistent demand, stabilizing dairy raw material costs, and improving operational efficiency. Dairy raw material prices have been trending downwards since reaching their peak in mid-2022 (dropping by c.30%-40% for skim and whole milk powder prices), and we project prices to remain at their current lower levels. Additionally, DLM demonstrates its capability to manage rising costs through price adjustments, thanks to its strong brand equity in the market.
Source: BIMB Securities Research - 21 Feb 2024

Multi-baggers

Vision to see them
Courage to buy them
PATIENCE to hold them

Conviction cannot be borrowed.

Stock price goes up and down. It is volatile. Volatility is NOT risk.

What are risks in investing?

1. Not investing is risk. Risk from inflation.
2. Not knowing what you are doing is risk. Risk of losing your capital permanently.
3. Investing in gruesome company is risk. Over the long period, it underperforms, fails to perform or destroys capital. Also, opportunity costs.
4. Entangling in a company run by dishonest manager is risk. You will never get a good deal from someone who is dishonest.
5. Buying at high price is risk. Probability of loss is higher than probability of return. Also opportunity cost.
6. Holding onto losers in your portfolio is risk. Lovers continue to lose money. Opportunity cost of reinvesting into a better stock.
7. Selling a great stock too early is risk. Misses out on the huge future gains from a great compounding company.

Many, if not all, of the above risks are behavioural in nature. The BIGGEST RISK to your investment is YOURSELF!😀

The enemy of your cash is INFLATION.

The friend of your cash is COMPOUNDING.

The best asset to compound your cash over the LONG TERM is STOCKS (EQUITY), as it offers the highest rates of return compared with all the other asset classes.

https://posts.voronoiapp.com/markets/The-Growth-of-100-by-Asset-Class-1970-2023-936


Growth of $100 by asset classes from 1970 to 2023.

>>>
Posted by Sslee > 10 minutes ago | Report Abuse

Timing beside on stock price you need to look into the micro and macro conditions that will affect the earning of that stock.
Sell if earning will drop and buy back when the earning will increase

And if that stock earning will depend on commodities price then monitor the commodities price trend
https://tradingeconomics.com/commodities

>>>

Focus on investing in companies with great businesses. 😀

You earn a lower return because the winners you sell and no longer have, continue to perform well while the losers you still hold, continue to perform poorly.

You have to love to take losses and hate to take gains.

STU

2006 2.50
2007 7.40
2008 2.20
2011 4.50
2015 1.85
2018 0.59
2024 0.28


How to game this stock?!!!
🤣

RST

2006 8.70
2007 11.30
2010 10.20
2014 24.50
2017 16.00
2024 18.00

How do you game this stock?

Buy when it is obviously available at low price or at fair price.
Do not buy when it is obviously at high price.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the LONG TERM and not sell (almost ever), just don't buy when it is high and only buy when it is at fair or bargain price?
It is.

QRS

2006 3.50
2008 10.00
2009 7.00
2010 16.00
2012 9.50
2014 13.50
2018 14.00
2020 19.00
2023 14.00
2024 16.00

How do you game this stock?

Buy when it is obviously available at low price or at fair price.
Do not buy when it is obviously at high price.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the LONG TERM and not sell (almost ever), just don't buy when it is high and only buy when it is at fair or bargain price?
It is.

JKR

2006 4.00
2007 9.00
2008 6.50
2013 31.00
2014 17.00
2016 24.00
2019 26.00
2020 17.00
2024 21.00

How do you game this stock?

Buy when it is obviously available at low price or at fair price.
Do not buy when it is obviously at high price.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the LONG TERM and not sell (almost ever), just don't buy when it is high and only buy when it is at fair or bargain price?
It is.


My friend bought at 4.00 in 2006 and sold at 8.00 in 2007, making a 100% gain quickly. 😉

Timing is of Psychological importance to the speculator

There is one aspect of the "timing" philosophy which seems to have escaped everyone's notice.

Timing is of great psychological importance to the speculators because he wants to make his profit in a hurry. The idea of waiting a year before his stock moves up is repugnant to him.

*But a waiting period, as such, is of no consequence to the investor.*

What advantage is there to him in having his money uninvested until he receives some (presumably) trustworthy signal that the time has come to buy?

He enjoys an advantage only if by waiting he succeeds in buying later at a *sufficiently lower price to offset his loss of dividend income.*

What this means is that timing is of no real value to the investor unless it coincides with pricing - that is, unless it enables him to repurchase his shares at substantially under his previous selling price.

Ref: Intelligent Investor by Benjamin Graham

Market Fluctuations as a Guide to Investment Decisions

What does the past record promises the investor - in either:

- the form of long-term appreciation of a portfolio held relatively unchanged through successive rises and declines, or,
- in the possibilities of buying near bear-market lows and selling not too far below bull-market highs.

Since common stocks, even of investment grade, are subject to recurrent and wide fluctuations in their prices, the intelligent investor should be interested in the possibilities of profiting from these pendulum swings.


There are two possible ways by which he may try to do this:

- the way of timing and
- the way of pricing.

By timing we mean the endeavor to anticipate the action of the stock market - to buy or hold when the future course is deemed to be upward, to sell or refrain from buying when the course is downward.

By pricing, we mean the endeavor to buy stocks when they are quoted below their fair value and to sell them when they rise above such value.

A less ambitious form of pricing is the simple effort to make sure that when you buy you do not pay too much for your stocks. This may suffice for the defensive investor, whose emphasis is on long-pull holding; but as such it represents an essential minimum of attention to market levels.



We are convinced that the intelligent investor can derive satisfactory results from pricing of either type.

We are equally sure that if he places his emphasis on timing, in the sense of forecasting, he will end up as a speculator and with a speculator's financial results.

This distinction may seem rather tenuous to the layman, and it is not commonly accepted on Wall Street.

As a matter of business practice, or perhaps of thoroughgoing conviction, the stock brokers and the investment services seem wedded to the principle that both investors and speculators in common stocks should devote careful attention to market forecasts.

Pretensions of stock-market forecasting or timing.

The investor can scarcely take seriously the innumerable predictions which appear almost daily and are his for the asking. Yet in many cases he pays attention to them and even acts upon them. Why?

Because he has been persuaded that it is important for him to form some opinion of the future course of the stock market, and because he feels that the brokerage or service forecast is at least more dependable than this own.

*

A great deal of brain power goes into this field and undoubtedly some people can make money by being good stock market analysts.

But it is absurd to think that the general public can ever make money out of market forecasts.

For who will buy when the general public, at a given signal, rushes to sell out at a profit?

If you, the reader, expect to get rich over the yers by following some system or leadership in market forecasting, you must be expecting to try to do what countless others are aiming at, and to be able to do it better than your numerous competitors in the market.

There is no basis either in logic or in experience for assuming that any typical or average investor can anticipate market movements more successfully than the general public, of which he is himself a part.

Of course, some may choose to sell some at high price. But not selling at all is also fine too!!!

Company GHI
2008 5.00
2013 21.64
2015 12.24
2020 30.00
2024 24.00

How do you game this stock?

Buy when it is obviously available at low price or at fair price.
Do not buy when it is obviously at high price.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the LONG TERM and not sell (almost ever), just don't buy when it is high and only buy when it is at fair or bargain price?
It is.

Company DEF
2006 1.22
2008 2.12
2009 1.37
2014 4.19
2015 3.64
2018 4.92
2020 3.14
2021 4.19
2022 4.78
2024 4.27

How do you game this stock?

Buy when it is obviously available at low price or at fair price.
Do not buy when it is obviously at high price.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the LONG TERM and not sell (almost ever), just don't buy when it is high and only buy when it is at fair or bargain price?
It is.

Company XYZ
2012 19.00
2014 16.00
2018 37.00
2022 20.00
2024 30.00

How do you game this stock?

Buy when it is obviously low priced or fair price.
Do not buy when it is obviously high priced.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the long term and not sell, just don't buy when it is high, buy when it is at fair or bargain price?
It is.

Company ABC

2006 RM 14
2008 RM 9
2019 RM 64
2024 RM 20


How do you game this stock?

Buy when it is obviously low priced or fair price.
Do not buy when it is obviously high priced.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the long term and not sell, just don't buy when it is high, buy when it is at fair or bargain price?
It is.

Nestle
Mkt Cap RM 28.281
Price RM 120.60
Revenue RM 7.1 b
Earnings RM 660 m
Year ending FY23

DLady
Mkt Cap RM 2.134 b
Price RM 33.340
Revenue RM 1.4 b
Earnings RM 72.4 m
Year ending FY23

F&N
Mkt Cap RM 11.275 b
Price RM 30.70
Revenue RM 5 b
Earnings RM 537 m
Year ending FY23

Apollo
Mkt Cap RM 561.60 m
Price RM 7.020
Revenue RM 257 m
Earnings RM 47.8 m
Year ending FY23

Ajinomoto
Mkt Cap RM 1.173 b
Price RM 19.20
Revenue RM 604 m
Earnings 27.5 m
Year ending FY23

Fresh Farm
Market Cap 2.752b
Price RM 1.470
Revenue RM 630 m
Earnings RM 50.1 m
FY23

On behalf of the Board of Directors of icapital.biz Berhad, we wish to announce that the Net Asset Value per share of icapital.biz Berhad as at 3 April 2024 is 3.92.

At 3.10 today, it is trading at a discount of 20.9% to its NAV.

Most closed end funds trade at a discount of around 20%.

F&N

Its share price climbed slowly over many years, reaching a peak price of RM 38 in June 2018.

From then, it fell to its lowest of RM 20 in October 2022.

Today, it is at about RM 30+.


How do you buy or sell F&N?

Quality: Great (growing)
Management: Great
Valuation:

Buy and hold for the long term.
Buy when it is obviously low.
Do not have to sell when it is obviously high.

In the long term, your investment in F&N will be fine.

33.340

Volume 47,600
VWAP RM 33.217
Change 0.700 (+2.1%)

Value RM 1,581,144

Will the EPS of DLady be higher in 5 years from today?

Is DLady over-priced today, for those with a 5 year investing time horizon?

32.700

Volume 53,000
VWAP 32.284
Change -0.800 (-2.4%)

Value RM 1,711,074

1.360

Volume 8,655,900
VWAP 1.376
Change -0.040 (-2.9%)

Trade Value RM 11,907,221

33.500

Share Volume 121,200
VWAP 33.354
Change 1.000 (+3.1%)
Trade Value RM 4,042,454

Putting dividend in its right perspective. Those who need income, will probably have to stay with dividend yielding stocks.

For others, dividend should not be the main focus. If you have a long term investing time horizon, invest in great company that can grow its revenues and earnings over many many years. This company, in its early formative year, usually distributes no or little dividends. It may distribute 20% or 30% of its earnings as dividends. Because its business is growing so fast, its retained earnings are put to work at high ROE.

Over the many years, you will find that your investment in this company rewarded you a lot more than the very high dividend yield stock (which are usually slow growers or no longer growing, except for 1 or 2 which do not require any retained earnings to grow).

For example:

Company A: Bought in 1992 @ RM 8.00. Its DY was probably 1.5%. Today, it has grown its earnings many folds and its dividend per share is RM 2.00 giving you a DY based on historical cost of 25%. Of course, its share price has appreciated a lot too.

Company B: 2005. You might have bought this stock for RM 2.00. At that time, it was growing fast. Its DY was low but it has been paying increasing dividends due to its increasing earnings. Today, its dividend of 70 sen per share, is a DY of 35% based on your historical cost of RM 2.00.

Note that in bought these companies, the dividends received were many times better that the high dividend yield stocks that did not grow over the same number of years.

>>>
JohnD0ugh

“To solve a problem, you need to remove the cause, not the symptom," said Liezi. Apart from Laozi and Zhuangzi, Liezi was also one of the most significant Daoist thinkers who lived in ancient China.

Solving a problem demands handling the root cause and not just the symptoms; the NAV discount is just a symptom of the underlying problem that your Fund needs the right type of shareowners, which it had for many years before the wrong type came in and caused the NAV discount to surface and persist.

By increasing your Fund's individual share ownership, we are addressing the root cause and finding a more lasting solution. Once again, do not let any investor who refuses to think and act like a share owner destroy a precious gem like your Fund.


i Capital.biz Berhad 2Q2023 Report
>>>

Nothing to do with "root cause."

It is the nature of closed end fund to trade at a discount.

The huge discount that prevailed for many years in iCap was reflecting the poor performance of the fund in those years.

Many long term share owners were disappointed when the fund attempted to time the market, by keeping a lot of cash in anticipation of a big downturn.

Approximately
200,000 shares traded
RM 6 m transacted

Calvintaneng was so sure in his post.

Calvintaneng has fill vision and saw his favourite promotion counter Netx, dropping a negative 10 bagger.

😀

Fundamental approach

Paying good and increasing dividends
Fine earnings record
Excellent financial position

Rule 7: Hold onto to the 1 rising stock for longer period than dabble with a dozen stocks for a short period at a time. But which stock will rise?😀

Rules to follow:

1. Do not follow advisory services. They are not infallible.
2. Be cautious about brokers' advice. They can be wrong.
3. Ignore Wall Street sayings, no matter how ancient and revered.
4. Do not trade in over the counter, only in listed market where there is always a buyer when you want to sell.
5. Do not listen to rumours however well founded they may appear.
6. The fundamental approach works better than gambling. Study it well.

Insiders

They know everything about their companies.

However, they may not know everything about the sentiment of the market regarding their stocks.