United Engineers Limited – What really matters in a Stock

Founded in 1912 | Property/Engineering/Manufacturing

Comparison will be done with Boustead (F9D)

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 0.873 (22.7 Below fair value) F9D – 1.553
  • Price to earning ratio : 65.12 ( Above industry standard – 35.86) F9D – 14.521

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity : 50.35% | 27.44%
  • Growth Performance : -42.99% | -10.33%
  • Dividend Yield : 2.09%[ 5 years] | 2.84% [ 5 years]
  • Current Ratio : 2.11 | 2.17 [Stable]
  • Book Value per share : 3.06| 0.6166
  • Cash Flow per share : 0.0583 | 0.1231
  • Average management ability ( dividend growth  | Weak net income/gross profit margin | overall Positive & Strong cashflow within its business )Screen Shot 2017-07-15 at 11.06.37 amScreen Shot 2017-07-15 at 11.06.21 amScreen Shot 2017-07-15 at 11.06.04 am

3)Technical Analysis

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Price action on the weekly chart shows that market is in a bullish trend for the past few weeks before forming a Head and Shoulder pattern. The stock seems to be respecting the pattern as you can see the immediate retracement when price tries to break above (ignoring the trend). An entry in this trade would not be wise as market in the past few weeks has been forming bearish characteristics.

4) Would I be vested into it?

No for now (because of technical), but might in the future.

Fundamentally:

  • Good cashflow management and undervalue
  • zero dividend growth
  • Low profit margin might be due to the size of the company

Technically:

  • H&S pattern is respect
  • RR ratio is not worth the entry

 

” +1 Knowledge Point”

“+1 P.I”

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#12 – AUDUSD (Dollar weakening)

Majority of the currency pairs are gaining on the dollar

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Spotted USD weakness over on its index and an opportunity to hedge against it through AUDUSD. Monthly trend seems to be forming bullish characteristic as it tries to break off previous high. Bullish momentum is strong in the volume indicator.

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During May, price action has failed to break key Weekly level and since then, market has been making strong progressive bullish candlestick. As you can see, multiple rejection of a bearish pull down.

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On the Daily Chart, Market bearish channels were broken as soon after formed bullish trend characteristic. This was what got me into preparing an entry into this pair.

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On the 4Hour Timeframe, A channel was spotted, and the immediate break off it with a doji was what led to a market entry. My exit strategy on the this was to exit when market showed weakness, which led to the 1:5 RR ratio.

Hopefully everyone caught it too 🙂

“Habit is built through repeated actions”

 

Is CPF really that bad? (Part 3 – Healthcare)

What does Medisave do?

“Medisave is a national savings scheme which helps CPF members save for future medical expenses, especially after retirement.” – CPF.GOV.SG

What can you do with your Medisave account?

Use it at all public healthcare institutions, and approved private hospital and medical institution – Click here if you want to know which specific one

Benefits of Medisave?

  1. Use it for yourselves (of course) and for you family members
  2. For all medical issues
    • “The Medisave Withdrawal Limits are generally enough to pay for the charges incurred by a patient staying in a Class B2/C ward in a restructured hospital. If you decide to stay in a higher class ward or a private hospital, you may have to pay part of the bill in cash. It is therefore important to choose a ward or medical institution that you can afford. For a rough estimate on the medical charges, you can check the hospital bill sizes by medical condition / procedure at the Ministry of Health (MOH) website. If you know your estimated medical charges, you may use our Medisave/MediShield Life Calculator to estimate how much you can claim.” – Cpf.gov.sg

Cons about Medisave?

  1. There are limits on medical issues
    • For example; outpatient scan of $600 per year for cancer treatment
    • How to go about it?
      • use your family’s member
  2. There’s a cap amount of $52,000 called basic healthcare sum (BHS)

Still think Medisave is not enough for your future healthcare needs?

Medishield Life was created in 2015 to replace Medishield. ” It is a basic health insurance plan, administered by the Central Provident Fund (CPF) Board, which helps to pay for large hospital bills and selected costly outpatient treatments, such as dialysis and chemotherapy for cancer. ” – CPF

Do you have to apply for it?

No! it is a replacement of the old Medishield plan that everyone has.

Why should you max out your MA account?

Similar to your SA, it gives the same interest rate and any amount above the BHS will go into you your other CPF A/C. Additionally, the amount for BHS rose by 4.4% within a year, which means you require a higher amount of $$ in your MA when you’re older. Remember compounding now and at a larger number beats “most of the future” compounding.

Corn-clusion

All in all, the money in your medisave account acts like a full basic healthcare insurance plan which can be used mainly everywhere in Singapore. If you need better care, an insurance plan is needed to cater to that need. 

The question to you is whether it is suffice? How knowing this can plan your insurance needs?

 

 

AEM Holdings – What really matters in a Stock

3 Manufacturing Plant (China, Malaysia, Singapore) | Presence is in 8 countries | Precision / Plating & Chemical /  Equipment Solution | Many famous directors in its board

Maybank holds 5 %,  while 40% are hold by two separate Novo Tellus companies

Comparison will be done with Micro-Mechanics (5DD)

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 4.364 (436.4% Above fair value) 5DD – 3.385
  • Price to earning ratio : 17.798 ( Above industry standard – 23.74) 5DD – 13.01

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity : 0.19% | – No data Available-
  • Growth Performance : -6.48% | 11.68
  • Dividend Yield : 2.38%[ 5 years] | 0% [ 5 years] – They pay dividend
  • Current Ratio : 1.68 | 4.83
  • Book Value per share : 0.5316 | 0.3604
  • Cash Flow per share : 0.1421
  • Below average management ability ( Average dividend growth (Only started paying in 2015) | Weak net income/gross profit margin | overall Positive cashflow but weak)Screen Shot 2017-07-08 at 10.35.56 amScreen Shot 2017-07-08 at 10.35.33 amScreen Shot 2017-07-08 at 10.35.29 am

3) Technical Analysis

Screen Shot 2017-07-08 at 10.43.47 am.jpg

This is definitely a popular stock as you can see the price jump of 10.5 times in a span of 1 year. Market is a overall bullish trend but is not in a short-term perspective. A live entry puts you in a 1:0.74 RR ratio. Technical entry would be very speculative at this

4) Would I be vested into it?

Nope but I would love to know more about this company. The amount of money you will make in one year is ridiculous.

Fundamentally :

  • $2.58 million debt dropped to a mere $85k within 5 year (is absolutely amazing)
  • Current ratio can’t beat competitor’s
  • Heavily overvalued
  • Poor cashflow

Technically :

  • An entry would be quite speculative

“+1 Knowledge Point”

#11 – USDJPY

Last week, I spotted a potential trend reversal on USDJPY.

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DollarYen has been trending bearishly for the 1991 and only in recent year 2013, BOJ has failed to meet many “promises” which leads to the fall of its currency price against the strong dollar. Monthly Chart indicate that 2007 high has been broken, a sign of a trend reversal on this market pair. As, I have noticed market has bounced of from key level, I’ve decided to hedge my trading idea on the smaller timeframe.

Screen Shot 2017-07-08 at 10.13.10 am.jpg

Last Monday on the Daily Chart, I’ve noticed that market was trading in key price action level. Additional, market channel was broken only few days back. It gave confidence for a potential entry soon… but I didn’t believe it to be so soon.

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Eventually, I’ve landed an entry on the 1Hour time frame as the 4hour proves unwise from a RR ratio perspective. My entry on this chart was a patient one as I waited for market to break previous high before entering. It led to a 1:6 RR ratio, exit was done forcefully as I got distracted with non-farm payroll data release. Didn’t really consider it a bad trade management but could instead put a trailing stop loss based on price action instead.

Hope all of you got a hold of this trade too

“Lessons were taught in every action done” – xxx

 

Is CPF really that bad ? (Part 2 – Housing)

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Did we harm ourselves? Or is it the Government fault?

Like how DTLIM commented, the allowance of more usage has lead us to deplete our CPF money faster than ever.  It’s actually quite scary, that Govern allowed CPF savings to pay for more than one property ( Very bad for the low/middle Income group)

Have the Allowance of CPF used for housing a good thing?

 

There was a study done by the Government as you can see, the average Singaporeans doesn’t shift to a smaller house but always to a bigger house! The number is actually not shocking because we humans are always looking for improvement, aren’t we?

So what do we have to pay when we move house?

  1.  CPF Refund (With accrued interest)
  2. Resale Levy (Not applicable for DBSS/EC/Resale flats/PRP)
    • Range from $15k – $55k
  3. Outstanding loan

But is all about my CPF… it doesn’t affect me

It does affect you! Being young and powerful, the tendency to spend and spend is inevitable. If the cash that is not used to invest, the probability of you retiring comfortably is very low. The sad truth is that, many Singapore are not financial literate and very pessimistic (good & bad thing).

REMEMBER, when you purchase a new house – Renovation will be the next big cost and it always tend to be in the 5 digit range… so you think you’re saving from paying with CPF? you might be spending more after all.

For the pessimist: the alternative of using our CPF has to always be greater than the $xxxxxx withdrawal amount when u turn 55. Without using your CPF at all you can withdraw a good 6-7 digit when you’re 55.

Disclaimer : Seek real financial help before acting on all these information as it is really damn biased… but its all factual (I take from government website hor).

Personal Thought:

Nothing is a guaranteed in life, even insurance companies, big banks (Lehman for example), but it should not stop you from making good financial choice. We are living in a world where risk is inevitable, the only way to win in it, is to have an edge. CPF interest rate is mandate by our government and its own by the country. That gives it a lower probability to be falsified (embezzlement/**** with us) without being caught as compared to a company.

“+1 Knowledge point”

 

 

GP Batteries – What really matters in a Stock

Founded in 1964 | Under the establishment of Gold Peak Group in Hk | Largest consumer battery manufacturer in China

Couldn’t find a good company for comparison

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 0.577 (43.3% Below fair value)
  • Price to earning ratio : 37.4 ( Above industry standard – 28.13)

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity : 77.73%
  • Growth Performance : -16.81%
  • Dividend Yield : 1.46[ 5 years]
  • Current Ratio : 1.15
  • Book Value per share : 1.43
  • Cash Flow per share : 0.2108
  • Average management ability ( Low dividend growth | Weak net income/gross profit margin | overall Positive cashflow)Screen Shot 2017-07-01 at 4.13.37 pmScreen Shot 2017-07-01 at 4.13.41 pmScreen Shot 2017-07-01 at 4.15.31 pm.jpg

3) Technical Analysis

Screen Shot 2017-07-01 at 4.20.08 pm.jpg

Stock price of GP Batteries has been in a long term downtrend after 1994 high of $5.4. Since then, market has been stuck with bearish characteristic of lower highs and lows. Price action on the monthly and weekly, seems to state that market is consolidating. A live market execution order will put you in a 1 : 0.74 RR.

4) Would I be vested into it?

No! GP has definitely have alot of value being a household brand for many many years or many would remember it for its famous rechargeable batteries. My no is mainly because of my investment methodology as of now, It doesn’t fulfil my entry requirement. A Chance of a buy back might be made apparent if the company loses it’s “efficiency” in producing money for its parent company. Definitely a company to be put in my watch list.

Fundamentally:

  • Company seems to be raking in alot of money but majority is going out to its stakeholders (good for investors)
  • Cashflow is good while growth rate is low probably due to many new entry of “China made” batteries

Technically:

  • Market has been in downtrend from 94, which speaks alot about management ability.
  • Long entry now doesn’t put my equity in a good position, then again, it might be a good price for fundamental investors.

“+1 Knowledge Point”

” Potential P.I”