Profits more important than revenue.

Ok.. from past experiences...

I have noted that the market tends to get nervous when the profit 'growth' extends more than 3 years...
this is cos.... I think... they are taught that growth doesn't last forever....
so after 3 years or so, they then pay attention to rate of profit growth...
once it slows, as per your example, they won't get so gung ho over the stock....
in fact... they usually get edgy....     

Err.....     

gung ho .... err .... means ........optimistic....

edgy...... err...... means ........ nervous.

ok ah?

hi all sifu sifus here

PRESTARIANG BERHAD

profit was increasing q by q, however recent quarter fell short

what are you gonna do if you are a shareholder???

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As mentioned before, you need to understand some sort of fundamentals ma....

So what has happened in the month of May?

How was the general profits trends announced?


Care to name some of those 'weak' klci stocks?

second half of 2014 - means the second quarter of 2014?

Not exactly clear.  In this case, since the statement does not specifically says FY 2014, I would assume that it means exactly what it means in English, which is from June to Dec 2014.

operations in vietnam are expected to incur a loss in the next financial years - so the profits in FY2014 will be affected, and it was already informed in 2013, so my question is when the quarter reports for FY 2014 are announced and indeed their profits are decreased, will it affect the share price?

You need to check if profits come mainly from its operations in Vietnam. If the answer is yes, profits will decrease and YES, logically (but sometimes, market not very logic one), the share price will fall.


profit contribution from vietnam opearations are expected to remain negligible for at least another 3 years - meaning the operations are expected to incur loss for 3 years to break even?

My interpretation here is that negligible means earnings are so small it's not meaningful. Does not neccessary mean it will incur loss.

My 3 sen nia. 

Wish you all the best of luck

However, do note, starting an overseas ventures operation does not mean sure success.
Many times, overseas ventures, like overseas plants ends up in failures one.
For example, you can take the case of JCY.
Last time, it spent big bucks to setup their plant in Thailand....
then.... what happen next?
Floods came......     

i can only hold till year end. because that money not belongs to me actually. it is my parents one. but if lost, i will fill the hole with my saving. because i just thought to learn to earn money in stock market. and this money accidentally transfer to my account ( i did tell my mom).

so i dont know what should i do now. from the quarter report, it did improve. but i dont know why it still keep on dropping. some say those big fish run away already. i also not sure.... i just a beginner after all...

Sorry for slow mo reply...
before I start my long reply...
please la...
no seafood here and there la...
seafood for eating only.
ok?


I could be wrong but it seams you like to trade stocks from bottom up.
I guess perhaps it's natural....
or perhaps you were taught this way...
... that is... when you buy stocks at the 'bottom'...
there is a sense of 'safety'....
ie... the stock HAD already fallen....
so... it should be safe.... much safer to chase a stock and only to see the stock fall 'big' time after you buy....

the problem here....
is that you are TRADING and not INVESTING.

from the investing point of view...
every time the stock falls...
it means the investor is getting the stock more cheaper...
and more cheaper means more value.....
so  if the investor buys the stock and the stock falls more...
it means the investor is getting an even better deal....

however.... traders should not follow such approach.
Traders are not looking at value when they trade...
they just want to buy and sell for the profit.

now when a trade enters a trade...
he/she is betting that the trade will make them xy profit.
what happens once the trade is made... and the stock does not go up but down?
it means only one thing...
the trader made a MISTAKE...ie a WRONG bet.

If the trader buys again... at a lower price....
what exactly is the trader doing?

Answer? Buying more of their WRONG bet.
Yup. Instead of admitting to their initial mistake, they are increasing their bet on their earlier bet.

Is this wise?

Ok so far?

Now how would you describe today's stock market in general?
ie current stock market?

It's a BULL market.

remember this for a moment...

back to earlier today.... questions were asked on Supermax.

The market in general...
is moving higher....
but Supermax isn't.

It is moving lower.

It's a massive counter trend.

Why?

Instead of profits growing,the last two quarters profits were declining rather badly.

Market sees the problem and understands the problem.

Remember Supermax and other glove makers were very aggressive with their capex...
A lot of money spent...
millions and millions...

instead of making more money....
company is making less and less....

hence...

the stock is being sold down...

for a very good reason.

Now if you are a trader.... should you bet on such a declining stock?

Me? My answer is no.

For I cannot see any near term catalyst that would seduce the investor to buy the stock.

Now if the investor doesn't buy the stock... what is the trader doing by buying the stock?
trading it for the dead cat bounce?

It's a no for me.

Now DRB....     

Like Supermax.... the stock is moving against the general market trend. 

For you... what is important is .... you need to find out WHY first.... before you enter a trade....

remember the general main trend for the stock is..... down.....


errr... so how?

I dunno and since I am not an investment adviser, I have no advice to offer you.

Ok?

i thought it will up base on its trend. 

This one, always a tricky issue and it also depends on whether you are an investor or trader.

Most important, you need to gauge whether the poor qtr result is a temporary blip or the weakness is the start of a long term weakening.

Sometimes, decrease in sales could be temp...
I might be wrong but I reckon a drop of around 10% is not too much of a concern
But I would probably advice you to check out the operating margins.
Is there a drop?
If margins drop significantly along with declining sales, then it's a big concern.

Rising costs.... now that's a issue.
If the company cannot pass on this rising cost to the customer (by raising prices), then it's a worry.
The shareholders of the company has to shoulder all these costs increase.
Not a good sign.....

Suggest you to wait and see the next qtr......

3.9% drop in margin and 2.9% drop in sales is not significant.....
and yes, increase in labour costs will eat into profits.

... and when you factor all these into the bigger picture.... what do you get?

If you do not own the company, do you find this as an attractive company to invest in?

I think it's just normal for any company.

A company should always make plans and counter measures whenever they face challenges to their profitability.

For the investor or the trader.... I believe what matters most is result.

Yes, it's result oriented (especially for traders).
The traders usually would not to sit and wait for the company to turnaround.......

Why? A company not churning out good profits will not seduce others to buy the stock.
Without buying interest, how else would the stock go up?

Err.. actually you need to consider if my comments suits you or not.

Because my comments are more 'trader bias'......

if I was more 'investor bias'.... then I would be considering the value part of the equation...

because if such issues are temp, and it causes a huge drop in share prices...
then one with an investor perspective would use the value issue as the basis for them to actually buy more of the stock.

yup,  buy when no one wants the stock.

Like I said before, one needs to understand oneself....

You need to know your own edge.

Are you a good trader?

Are you a good speculator?

Are you a good investor?

Or are you simply a punter?

..and you are learning how to invest from a trader....

I am definitely not an investor.