CRESNDO dividend going ex tomorrow

Just a short message here to inform that CRESNDO's 2nd interim dividend of 2 sen will go ex tomorrow. This means that today will be the last day in which you are still entitled to the dividend.

However, after the ex, the share price will reflect the 2 sen dividend paid out.

MAMEE: Someone key in wrong order to BUY?

MAMEE gained RM1.00 or 28.7% to RM4.48 with 10000 shares traded at this price. This is quite unusual. Based on yesterday close price of RM3.48, I guess that someone have key in BUY order wrongly.

Lesson learnt:

1. Check your order 3 times before keying in (for those that trade directly using Internet).
2. When you see large price increase with huge spread between BUY and SELL, then most probably it is a wrong order.
3. Capitalizing on human mistake, sometimes you can consistently key in SELL order at price way above yesterday close, especially on low liquidity stock. If someone key in wrongly to BUY your offer, you gained the $ from their mistake.

CIMB Initiate Coverage on Petronas Chemical Group

CIMB Research initiated coverage on Petronas Chemical or PCHEM today with OUTPERFROM call with Target Price of RM7.25. At the close, PCHEM lost 10 sen to close at RM5.86.

My view:
PCHEM is a FBM KLCI stocks and for this counter to go down so much when CIMB initiate coverage on this stock is something rarely seen. However, to be fair the South East Asia market performed badly today with Jakarta Composite Index down 152.90 points to 3478.55 and Singapore Straits Times Index lost 32.08 points to 3229.27 points.

All these seems like foreign funds have started to take profit. Be careful and start to unload $ from now onwards...

TM: Limited upside from now onwards

FBM KLCI ended 3.84 points higher today to 1572.21 points, registering 5th day straight gains. On a weekly basis, FBM KLCI surged 53.3 points or 3.51% to 1572.21.

My view:
We have really reached the uncharted territory. Logically, one couldn't stop thinking about what stocks to take profit out of the share market for some shares. Out of the stocks that I am looking at, here's one stock in which I think is ripe for profit taking:

Telekom Malaysia
In my blog with title TM:Special Dividend Coming? dated 3-Dec-2010, I have mentioned of the possibility of TM distributing special dividend. From the share price increase, it seems likely that TM may do so soon. However, I would prefer to take profit first due to: i) Average analyst target price for TM is RM3.53, 20 sen below today close of RM3.73, ii) assume dividend of 20 sen annually, the share price increase have pushed the dividend yield to 5.4% from around 5.8% previously, iii) assume TM pay out all the proceeds from Axiata stake sale and Measat, the special dividend should less than 30 sen which is already reflected in the price increase.

CRESNDO: 5 reasons NOT TO MISS THIS STOCK

Stock Code: 6718
Potential can go up to RM2.12
Upside potential: 47.2%

I have written about Crescendo or CRESNDO on 10-Dec-2010, the full link: CRESNDO Introduction.

To recap, CRESNDO. To recap, CRESNDO is mainly involved in property development and construction related activities in Johor. CRESNDO is a pure proxy to Iskandar investment theme as the Company owns a total of 3,055 acres of land in Johor, out of which 1,735 acres of it is within the boundary of Iskandar Malaysia (as of 31-July-2010).

As usual, let's do some KISS (Keep It Short and Simple) and look at the 5 reasons not to miss this stock.


No 1. Stellar 3Q2011 result with net income up 107% y-o-y
On 29-Dec-2010, CRESNDO announced its 3Q2011 result in which net income surged 107% y-o-y to RM8.45m. However, the net income drop 7.3% q-o-q. Looking from 9-months year to date or 9MYTD perspective, net income surged 56% to RM22.38m


No 2. Consistently paid dividend of 7 sen in the past 5 years, this year dividend likely to be higher
Along with the result announcement, CRESNDO announced dividend of 2 sen per share. This is a surprise as the Company did not do so in last year. Looking at the trend in which 6 sen dividend already announced for this year, final dividend of 3 sen is likely, bringing total dividend to be 9 sen. This translates into 6.25% dividend yield based on yesterday close price of RM1.44... this is easily the highest dividend yield counter among the property stocks.


No 3. From technical point of view, price have returned to NEUTRAL level
After the good 3Q2011 result, the market has noticed CRESNDO and push the stocks to OVERBOUGHT level, causing CRESNDO to move up to as high as RM1.48 on 4-Jan-2011. With the share price retreated slightly to RM1.44 yesterday, the stock RSI has returned to 67.7, indicating it has returned to NEUTRAL level. How to play with this? Use this as a chance to accumulate this stock with deep value.


No 4. Attractive value with Price to NTA ratio of 0.48x
Considering that: i) CRESNDO has the potential of growth due to its exposure to Iskandar investment theme, ii) 3Q2011 net profit jumped 107% y-o-y and iii) consistenly paid dividend in the last 5 years with 7 sen dividend each year... the market may have given too much discount to CRESNDO with only 0.48x Price to NTA or P/NTA. 
 
No 5. Have potential to increase 47.2% to RM2.12
KSL is the nearest comparison for CRESNDO with P/NTA is 0.93x based on yesterday close price of RM1.94 and NTA of RM2.08. However, KSL has land or projects in KL while CRESNDO do not. By taking this into consideration, 25% discount to KSL's P/NTA will give fair P/NTA of 0.7x. If the market agree to 0.7x P/NTA for CRESNDO, then this stock is poised to go all the way to RM2.12, representing possible upside of 47.2%.

FPI: 5 reasons NOT TO MISS THIS STOCK (Stock code 9172)

I have written about Formosa Prosonics Industries or FPI on 18-Nov-2010, the full link: FPI Introduction.

To recap, FPI produces a variety of products which include Home Theatre Audio Systems, Satellite Speaker, High-End Audio Systems, AV Racks, WI-FI Internet Radio, WI-FI Internet Adaptor, Outdoor Speaker, Bluetooth Speaker, Receptor Radio, CD Radio & Car Speaker Series.


The Group’s manufacturing facilities are located in Port Klang (Selangor), Sungai Petani (Kedah) and Dongguan (Guangzhou, China). Overall, the Group owns 2,908,170 square feet in total of land area.

Let's do some KISS (Ooops, I mean Keep It Short and Simple) and look at the 5 reasons not to miss this stock.

No 1. Attractive value with historical PER of only 6.1x
Considering that: i) FPI has more than 20 years experience in manufacturing high end speaker, ii) net profit jumped 175% in FY2010 and iii) strong balance sheet with net cash of RM81.4m... the market may have given too much discount to FPI with only 6.1x historical PER. Even at 9x historical PER, FPI should worth at least RM1.33.
No 2. > 10% Dividend Yield (Historical)
In FY2009, FPI distributed total dividend of 10 sen. Based on closing price of 90 sen, this is 11.1% dividend yield. Bear in mind though that this is historical dividend. FPI announced 3 sen dividend in 2Q2009 but did not do so this year during 2Q2010. Nevertheless, FPI distributed 7 sen dividend in 4Q2009 and it is still possible the Company may pay 7 sen or 10 sen. Worst case, 5 sen still not bad as it translates into 5.6% yield.

No 3. Unusual volume increase today
Let's have a look at the previous 5 day volume (rounded to nearest 1000):
28-Dec-2010: 35000
29-Dec-2010: 60000
30-Dec-2010: 55000
3-Jan-2011:    20000
Today 4-Jan-2011, FPI total traded volume is 289000

Which is about 700% increase as compared to its normal average volume of 42.5k. This means that the stock is getting more attention from investors after being neglected for some time. Significant increase in volume in good fundamental stocks may be followed by share price surge.

No 4. Laggards among small cap counters
With market cap of around RM200m, FPI is a small cap counter which has yet to appreciate significantly. When the main market increase cool down, mid cap and small cap counter will normally come into investors attention. From the significant volume increase, FPI seems to be the next stock you should really look at...

No 5. Have potential to increase 47.8% to RM1.33
Wait, don't think I am too bullish here for FPI. Look at my previous post FPI Introduction and FPI 2Q2011 Result, look at the balance sheet, look at the Company's potential in high end speaker manufacturing. Giving a 9x historical PER is certainly not too demanding. If the market agree to 9x historical PER for FPI, then this stock is poised to go all the way to RM1.33.

MBMR: 5 reasons NOT TO MISS THIS STOCK

MBM Resources Berhad or MBMR owns 20% of PERODUA and 71.5% of Daihatsu (M) Sdn Bhd. Besides motor segment, the Company also involves in Manufacturing and Property segments as shown in the Group Structure below:

To make it simple, let's have a glance at top 5 reasons why you SHOULD NOT MISS THIS STOCK:

NO 1: Attractive Valuation
At RM3.34, the stock is trading at forward PER of 5.9x only, as compared to APM 9.3x and PROTON 9.8x


NO 2: Earnings improving, FY2010 earnings poised to be the highest ever in history
For 9 months 2010 or 9MYTD, MBMR accumulated net income is RM112.78m. Considering that Quarter 4 is normally weaker, let say MBMR made only RM25m in the last quarter. If that comes true, MBMR will be achieving its highest ever net income since incorporation. Imagine the share price reaction when the earnings are reported in newspaper and by other research house.


NO 3: Still significantly below book value of RM4.03

At RM3.34, the market is giving discount of 17.1% to the Company's Book Value. Think it again, 20% ownership of Perodua and 71.5% ownership of Daihatsu Malaysia. Does it make sense for the discount? I myself think that the discount should narrow to 5%, which means MBMR has potential to go up to RM3.83.


NO 4: From technical view, still NOT OVERBOUGHT

At RM3.34, the Relative Strength Indicator or RSI reading is 59.1, which means it is still at NEUTRAL state. Still some way to go before MBMR RSI cross 70 level, which then it will be considered Overbought.


NO 5: Average analyst target price is RM4.56
There are 11 analysts covering MBMR, 10 calling BUY, 1 HOLD. The average target price is RM4.56, representing upside of 36.5% from current market price of RM3.34.



Possible bonus issue?
MBMR balance sheet has the strength to do so. The market price has surpassed RM3.00 which may cause less retailers participation. All these indicators suggest that it is possible for MBMR to do bonus issue, 1 to 1 is not a major problem...