..... and this is the accident waiting to happen.... >100xPE

May I know what you are smoking????



First you post the chart....
In which you asked....

'Too early to exit at higlighted yellow area?'

Now you say you want to look at chart factor before digging deeper?????

Knowing the fundamentals would help more than just looking at charts.


Like I said before, do not let the charts use you.

Understand more of its fundamental la.

One. Ok can understand the comparison with Old town but Old town is overrated. So being better than Oldtown doesn't say much.

Earnings was better the last 2 quarters but then on a fiscal yearly comparison it's simply flat and uninspiring. Which CLEARLY does not really justify the current stock pricing.

Meaning to say you are betting on Proot on an already optimistic prices...

Ok. Let me say it 'differently'....

Proot reported profits the other day. Fiscal year end profit stood at 43.5 million vs 43.3 million a year ago.

Which means profits were .... fill in your description..... flat/stagnant/growthless/poor/ etc etc etc....

Despite such lacking earnings, Proot trades at an earnings multiples of 19x...

Does it sound attractive at all?

Which investor would pay 19xPE for a company with no earnings growth for the current fiscal year?

Dividend counter?

looks like you are getting a lot of risky perceptions (like what is fallen means equals good buy or dividend counter means good/safe stock) about the market.

Let me say this.... you can have a good/SOLID so-called company....
paying more than 6% dividend....
but profits kept falling.....

U think the price will hold just because of the risky yield?




Buy low sell high?
You think that's a good strategy?

Aiyoooo...... are we wanting to talk and become aunties?

leave such stuff alone la...
you won't get rich or poorer from it.

You did not answer the following question...

Let me say this.... you can have a good/SOLID so-called company....
paying more than 6% dividend....
but profits kept falling.....

U think the price will hold just because of the risky yield?

So you realise and understand that dividend counters will have its risk because the lower profits puts a burden on the company's cash flow and hence forces the company to reduce dividends.

Case study: Amyway.

Hope you understand when you said PROOT would be a dividend counter is risky.

The fundamentals should be used to your advantage.

If a company profit is still good and if you foresee better future profits, you do not have to force yourself to look at every possible exit.

Trade wisely la.

For sure!

Great advice!

It's like the chat of JAKS i posted the other day.



Clearly for now, the stock has stopped advancing. It had been consolidation lower and lower. Current PE multiple? >100x.

So many suckers in the world?

Karex ....

The chart looking damn FUGLY !!! Yikes!!!



First thing noticed there's 2 RECENT sell downs...

1st one in Feb 2017.

It reported it's earnings on 24/2. See how the sell down after that.

From 2.34 to a low of 1.98. (Amazing thing is the stock rallied to 2.2++ after that! What a kind world! Shitty results but yet this one can still up. )

Then came to the current sell down (Karex was 2.33) which started on 26/5. Four days before the report came out on the 30th.

Current cumulative profits indicates a decline of ONLY 67% in yearly profits......

The amazing thing was the end of profit growth DID NOT just happened overnight.



We are NOW looking at the 5TH CONSECUTIVE quarter where earnings DECLINED!

Was there not a chance to exit this stock earlier? Or rather SHOULDN'T ONE NOT CONSIDERED THEIR EXIT STRATEGY EARLIER?

Update...

Parkson closed at 575.

The profits does matter (not difficult to have a quick look see)



* those 3 quarters that shows positive profits? They all include one-off disposals. *

By my calculations... we have now seen 19 CONSECUTIVE QUARTERS of losses !!

And not looking for the share price.... the share price has broken lower...



* Buy low, sell high? The problem with such strategy is that it is rather very risky if we used this as a one blanket rule. Some stocks are consistently hitting new 56-week lows (another rather pointless yardstick) , The low one buy today could very well turn out to be the highs of the yesterdays. *




The BIG picture is actually highlighted clearly in their performance review in their latest earnings notes.




Look at the cumulative year-to-date review of its retail sections in all countries.

THEY ARE ALL LOSING MONEY!!

Also, this Parkson business strategy of focusing on new store growth.... well it clearly doesn't seem to be working anymore. Yeah Parkson opened 2 new stores. Parkson MyTown and Parkson Sunway Velocity. Hard to understand. Opening two brand new stores at two NEW MEGA MALL which are located so close to each other.


** Technicals? Chinese Water Torture. Just when you think the stock cannot go down any further, it does!

** NTA. Many have used the NTA as a reason to buy this stock.... and yet Parkson keep falling!


Take care.

Profit growth .... has it's risks. Plenty - in fact.

But what to do.... no risk no gain. LOL!

1.Once the growth rate slows down...

You gotta watch this. A company's profits can grow for say... 20% per annum. Which really is phenomenal.... but as in the business world, such growths don't last for a long period of time. The minute, it slows down to say 8%... these stocks can get hit so bad. In some cases, more than 50% can be wiped off the share price in the blink of an eye.

( Math's time. Stock is 100. It falls 50%. It is now 50. But for it to recover back to 100... that stock needs to double. Odds of it happening is slim in most cases !)

2. Perception can kills too.

Not too long ago, we have seen this happen here. Those export oriented stocks. Some high flyers were stocks like Heveaboard which experienced an incredible growth boosted by the STRONG USD. Profits flew, stock flew. Then... before Heveaboard actually posted its earnings, the market got nervous as the Ringgit recovered 'slighly' (strengthen about 10% + nia... ) and before I could finish saying 'Let's go out tonite and have some Hokkien mee (tambah the CYC) and then have some teh tarik.... ' all exports oriented stocks tumbled. Till today, Heveaboard stock never reach its recent peak prices.

So you gotta be careful too. Know your risks.

And of course, when times are good, these growth stocks can trade at very high valuations. The market is pricing the stock towards its future earnings prospects.

Dude this is one extremely poor fundamental stock.

Frankly I don't understand you. Here's why.....

1. What's the 2 vertical line (that has no value) which you have drawn across?

2. Just the other day you wrote:



If time to cabut, why still Karex?

Karex is sitting on a 5 consecutive quarters of decline. At this rate, it's trading on a potential yearly EPS of less than 3 sen. We are looking at a stock trading with a pe > 60. With a clear decline in profits, how many other people you think might want to chase the stock up? ( I hear people investing in private companies that are making more and more money but to invest in a company that is losing more and more money? )

The problem, I understand, in any market, ANY stocks can be fried. ANY. And sometimes, these big name stocks sound sexy. But I reckon it's better you need to understand the risk trading such stocks.

3. Look at the current type of stocks you are/had focused on. Jatuh air stocks.
Ok, Karex did well the past 2 days. But your current system picked stocks like Xingquan. When you posted on the 2nd Xingquan closed at 0.045. 2 days later it closed at 0.02 sen.

Here's another issue. Such penny stocks. It's extremely hard to line up your sell bids because the Q is usually large in numbers. The only way to sell is that you need to give in and sell to the buyers bid. If the trade buy/sell bid is 1.5 sen and 2 sen, do take into consideration the extra huge losses you have to endure if you were forced to sell at 1.5 sen.

So in such trading system, your stock selection focus on stocks allowed you to gain a 20 sen gain on Karex (assuming you got in at 1.67 and sold at 1.87 sen) A 11.97% loss.
But in the same system, your stock selection also focused on stock that could lose 2 sen (assuming you buy at 0.045 and sold at 0.02 sen). A loss of 55%!

Your trading system has a potential to lose more than you gain!

And usually all it takes is one BIG BAD MISTAKE to wipe everything away!

So caveat.




Ever think of it in this way? Trade wisely dude... always.

This post has been edited by Boon3: Jun 6 2017, 08:49 AM

Yes, of course I understand your intention. However, my point to you is that such system tends to generates more risks.

Leave charts out. Think for a moment..... Think about the system you are trying to develop.
Ok?
Now ask yourself....
why do we have such cases?
why do we have such cases where stocks suddenly plunges?
And when we scalp of the bottom in such scenarios, we are challenging the market that they got it wrong. Yes?

Ever think of the flip side?
A stock just broke UP STRONGLY instead of breaking down.
They go on a 2 or 3 day tear.
Creating them long candles.
Now would you want to do the opposite by shorting?
Yes, an understandable practice cos the stocks could consolidate and perhaps after 2 or 3 days of consolidation or maybe more, the stock would resume its uptrend again.
Now the consolidation phase. Sometimes it is short. Sometimes there isn't any meat (hope you understand this)....
Agree?
If you can understand the risk in shorting in such situations, you would understand the risks in betting for the reversal in a plunging stock.


Stocks generally do not fall without a reason.

1. Karex. The profits is CLEARLY going down the drain.
2. Xingquan. DO study the history la. It's a bloody joke. Understand the fuss against Chinese stocks. And when these Chinese stocks can't even produce a financial statement, understand the implication la.
3. Parkson. Ahem. Big name retail company but so what. Look at the books. Look at the numbers. Malaysia losing money. China losing money. It's a bloody joke.
4. AAX and AirAsia. Do read again the earlier postings.
5. Poweroot and Oldtown. Do they deserve the high valuations that they were trading earlier?



Several real time postings made last time before.

Do search back my postings on SKPet. The warnings I gave on chasing the OnG blue chip stock. The stock fell from 5. How much capital has one got to average all the way down?

Vivocom. The 3 billion stock. See how it fell.

Xingquan. Posted on it when it was 1++

Parkson. Posted on it when it was 2++



Take care.

Run as many trial trades as possible. See the end results. Compare the success rate vs the failures. Most important, gauge if you can contain and limit each lossess cause as far as I know, losses can be extremely humbling.

I would have put into consideration the historical earnings track record. Even if they had showed a sign of turnaround, the earnings is really lousy. In short, you are betting on if this lousy horse can turnaround or not.

Yes, as I have said before, ANY kind of stocks can be goreng UP, which means, sometimes despite our best logical reasoning the stock can still act contrary to our hard work. Yes it happens. It is what it is, the stock market. This is how the game is set up. Should we abandon our logical reasoning and simply bang on?

Use FGV.

FGV currently has a trailing eps of only 2.2 sen.
What it means is that based on current quarterly trends, at current pace, potentially FGV might only earn 2.2 sen eps for the current fiscal year.
At 1.66, we are looking at a stock that is trading with an price earnings multiple of over 75x !!!
Yeah. 75x PE.

Now let's take a fast look at the quarterlies.



Look at the massive lumpy losses.

What does these losses suggest to you?

Then we look at the 5 year track record.



Look at how the profits has collapsed. And since its IPO too!

Now given such a track record, how would you assume the stock is trading since IPO? Yes, let's use our logical reasoning. See if it works or not....

drums please...........................................



Yes, over time, a lousy company = a lousy stock. Yes, time is the enemy of a lousy company. You cannot escape one. As long as things remain, the lousy company usually perform lousy earnings. Who wants to invest in a company whose earnings is less and less?