Sometimes we can never know exactly what's happening but we can always do our best estimation.

On a six month time frame, the stock is so happening. It appears to be a strong uptrending stock. Very seductive.

However, as we zoom out, the picture isn't quite the same.

Take a look at the 5 year time frame.

It's a deep downtrending stock !!!!

If we relate to the company's profit track record, we CAN CLEARLY AGREE why the stock is so BORAK.

And the recent quarterlies agrees. Huge losses.

And so we have yet another case, where the stock is ABSOLUTELY DEFYING IT'S FINANCIAL PERFORMANCES.

How?

Whack the stock just cause the stock chart shows it might fly higher?
ps: it recently traded as low as 0.725.

tell me.... you holding, buying or selling?

This would be my preferred chart. It accounts for the stock going ex dividend.

So the main driver of the stock is the sale of the leasing company. Right or wrong this is what the market is expecting.

So more or less, the Q results .... err... probably not as important for the time being.

Now for the earnings... some issues to remember.

1. OIL prices. Cheaper oil by right should be good for AA. However, the problem is, they hedged too early. Hence, their hedged oil prices is actually more than the current prices.

2. Currency. It's all about the USD. They have 2 hedges. One on the currency and one of the currency swap. (Please read the Q reports la)

Now it's now as straight forward and simple as this.

If if you take say YearX Q4 notes (better if you read the annual report), what you should do is, read the amount they hedged for the year. ie, ALL THEIR HEDGES.

NOW COMPARE IT VERSUS THE PREVIOUS YEAR. The amount is significantly more (the last I remember).

They are hedging MORE..... and they have been hedging ever since they started.  And another interesting note is, these hedging results, is actually more significant than their actual operating profits. 

Which is why you will see the forex gains/forex losses, oil hedges losses .... these sums run into millions. Once. I recalled, losses hit over 500 million.
And because these hedges results figures are so huge, you cannot discount it. You cannot say, oh because the forex losses were so many millions, this was why the company did not do good. This is because hedging is in their dna and it's certainly in Tony's dna.

Which is why, in my opinion (probably many would not agree) why AirAsia is trading at so low earnings multiples.

ok so far?
Like I said..... main driver for the stock is still the leasing company. A special payback dividend of maybe 80 sen or 90 sen or 1.00 can easily masks everything.
Take care.
ps: I believe in betting on easy trades.
Simple easy trade.
If it's complicated... I avoid. If lari ayam, so what.

Waterfall...

Never can understand the choice of word to describe such a chart.

I started learning the markets long ago, DURING A BEARISH MARKET. Oh, yeah, the market conditions are important to note whenever we trade. It's like fishing. A calm sea and rough sea are two different fishing condition. The end result is never the same, using the same exact skill set. In trading, during early bullish market conditions, breakout trading will work like a charm but when the market turns extremely bearish, using the same trading skill set, will most likely yield a different end result.

For plunging stocks like this or even AirAsia, throughout my personal paper trading result, NOT BEING A HERO and avoiding the stocks during the initial plunge had always been the better option. For most of the time, the plunge WILL CONTINUE and trading it will yield disastrous results. Oh yeah, some will be smart panties and insist that this is a bullish market, and whatever plunge should represent a buying opportunity.

Let's not be biased and let me choose a stock from 2013, a period where the KCLI was in an extremely bullish period.

Now let's find a plunging stock, yeah, LOL, your waterfall stock.

Stock name is withheld so that we do not form any BIAS from the get go.

Stock was at 2.79... and it plunges... big gap down....



another gap down the next day.



in the next chart below, the stock stabilizes .... held at 2.43 the next couple of days...

ok.... at this point of time...  perhaps one wait the declining volume as an indicator that maybe the selling has subside....

.... so at the end of the day... with the stock holding the 2.43 line... and volume declining.... one dives in....

wham ....bam......

the stock gaps down once again..... closes at 2.25 !!!! remember the stock was just at 2.79 few days ago... see chart below



How? Hold or take the losses?

Ahh.... this is where it got even more trickier.... the stock actually stabilized and by Oct, young green shoots were showing and perhaps there was chance, an opportunity to take the risk and make a gamble on the stock.



and guess what happens? in that month it did rally to as high as 2.73...... but then....... it fell once again....



it would hit a low of 2.03!!!!

oh... yeah.... I am sure many would have guessed.... I am talking about my favorite other stock.... AirAsia.

Oldtown..... so.... you think the sell down is justifiable?

and what's the buy recommend based on?

The 2 OBVIOUS risk....

1. Will Tony get this sale DONE?

This sale idea was mooted a long time already.  Wasn't it last Aug when AA announce this idea publicly.
It's now nearly June. If this leasing company is so attractive, why is it taking so long?
No buyers? Or buyers not willing to pay so high? Or buyers not liking the T&C of the sale?

The longer it drags............

2. Special dividend.

Everyone is simply greedy.
All is focus on how much and the potential yield.
Like I said before, the sale and leaseback of assets is designed to help companies with tight cash flow.
Selling of such leasing company? LOL! AirAsia is really desperate for the cash, yes? (and if you agree on this, then perhaps you would also agree that it will the bidder's market. yes? )

Now with AirAsia needing the money badly ... which is very, very obvious... when then would it want to throw it away by giving so much money as a special dividend?

Meaning to say.... we need to address the possibility that AirAsia might not give out special dividend as suggested by the market.

Where is your...

Got sale, but really small dividend ?

Got sale NO dividend?

ASSUMING you have do not own any stocks of OLDTOWN before but was interested cos it's a 'INVESTMENT' stock plunging big time.

And obviously, the mindset is to think that whenever there's a huge fall, there must be some sort of bargain. Sometimes the answer is yes BUT many times the answer is no. A rather IFFY strategy cos you can get it more wrong than right.

First thing first...



Now that's the BIG fall... but the thing to note is the chart below...



As we can see the stock was driven high the past couple of months, which coincided with OLDTOWN's super duper result recorded in Feb 2017.

Now if we are interested in it now, now that the latest result is said to be 'disappointing', we need to check out Feb results.... key is don't be a sucker and simply dive in chasing numbers....

Again, for me, everything is about comparing numbers....



As can see

1. OTHER GAINS.....

that boosted profits by some 5.336 million. Well the amount is significant given the total size of Oldtown's profits. Which means we need to read that note B.



And comparing it with the same quarter last year and also comparing it with the total ytd figure, it's best one not to expect these to occur regularly.

2. Purchase of trading merchandise, food , beverages and consumables

I was interested in that amount. Oldtown purchased so much less for that period.
* This is an expense item. Obviously, the lesser the expense, the more the profits! *

Now this is where I jump to the most recent report...

What is shown is rather REVEALING.



For the latest quarter, this expense item SHOT up. Remember the quarter in Feb, the purchase figure was only 3.3 million. This quarter it was 21.9 million.

There you go. Expense shot up, profits came down.

Now 2 things to consider.

Was it intentional that Oldown purchased so much lesser for their Feb Q results? Did they attempt to boost profits? If the company is guilty then..... why on earth do we want to trade/invest in this stock?

If it was not intentional then ok. Oh yeah, thngs like this could happen. Suppliers no stock, suppliers shipment problem etc etc...

Then of course, for the Feb Q report, despite the handsome quarterly profits, it was really reflected in its cash balances.... see below.



Cash was actually lower.... BUT what stuck out sorely was the massive, massive rise in TRADE RECEIVABLES....

from 63 million to 92 million in 3 months.... is bloody scary.

So there we have it..... this stock jumped from 1.90+ to 3.40+ in just 3 months. The earnings reported was impressive but when we go thru its quarterly report, was this HUGE JUMP IN OLDTOWN'S STOCK PRICE JUSTIFIABLE?


This needs to be answered before even considering an attempt to trade this stock.

Oh back to the receivables issue. In the most recent result quarterly, the company said...

The Group has provided for doubtful debts of the overdue trade receivable accounts
amounted to RM4.76 million

Huh !!!!

In Feb report, trade receivables jumped from 63 to 92 million. Now we read the company needs to provide for doubtful debts. So the profits is adjusted lower by 4.76 million.

WOW!

If we put 2 and 2 together, ie put the purchase issue and this trade receivables issue together.........

[WARNING: amateur analysis  ]
When i look at volume, i always look at its compliment; MACD and stoch RSI. While Stoch RSI might show oversold signal, MACD is still in downtrend which signal bearish trend. If I were you, i'll wait a bit more.

While i hope i am right, i could be wrong. If so, someone pls correct me. Still learning basics to TA. 

Petronas okays Hibiscus’ purchase of Shell stake in Sabah venture
Read more at http://www.thestar.com.my/business/busines...Xgj0ZMheK36p.99

PETALING JAYA: Hibiscus Petroleum Bhd saw its net profit in the third quarter (Q3) ended March 31, 2017 slump 92% to RM6.5 million, against RM80.5 million in the previous corresponding quarter.
http://www.thesundaily.my/news/2017/05/24/...rofit-slumps-92