After selling $Dutech(CZ4) late last year ahead of the US Elections, I have re-initiated a new position today at 46 cents. Reasons for investing are largely the same:

1) Steel prices this quarter are largely comparable to last year
2) Mgmt will focus to restructure Metric UK after acquiring it last year
3) Increase in advances to suppliers and growth in inventories may suggest greater work ahead

Anyway, it is really a tiny position accumulated today

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Recommended & Related Posts

$Dutech(CZ4) 3Q results are out. stable and steady growth path.

Read my initiation report here and why I am bullish about its long-term prospects

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Investment Strategy For US Election 2016
- Original Post from Heartland Boy

The US Election 2016 is another event that could have a profound impact on the global stock market. Similar to BREXIT, there is a known date for its occurrence. The US Election 2016 is set to take place on 8 November 2016 (US Time), and the results will probably start to filter in by 9 November late afternoon. (Singapore time) Given the latest FBI probe, Hilary Clinton is no longer seen as a clear front runner. As chances of a Donald Trump victory increases with each passing day, the stock market has reacted by tumbling steadily the past week. Given the significance of the US Election, Heartland Boy has reviewed his public portfolio in the past month. Here is his investment strategy for US Election 2016.
Investment Strategy For US Election 2016
Heartland Boy does not like uncertainty and neither does Mr Market. However, he is certain that the Singapore Stock market will experience a turbulent trading day on 9 November. Therefore, he made an effort to devise a simple 2-step investment strategy for US Election 2016.
Step 1: Review Your Investment Portfolio
During the month of October, Heartland Boy spent considerable time analyzing his investment portfolio. He read his initial investment thesis and checked all the performance indicators that would help to give a glimpse into the near-term earnings of his stocks. These were the following decisions that he has made in the month of October:
1. Sarine Technologies $Sarine Tech(U77)
In this post, readers would have realized that Heartland Boy buys stocks when they are on an uptrend. Conversely, he would sell stocks when they are on a downtrend. Unfortunately, Sarine has embarked on a downtrend lately. Furthermore, the industrial indicators also reveal a rather gloomy outlook. Prices of rough diamond have been rising while prices of polished diamonds have been dropping. Given that Sarine sits in the middle of the value chain, it may experience pressure on its revenue. As such, Heartland Boy has made the decision to take profit on Sarine and divested it completely. This is a contrarian call against what Maybank thinks though. Heartland Boy maintains that Sarine is a very solid stock but the industry headwinds may be too strong for it to bear at this moment.
2. Dutech $Dutech(CZ4)
Similarly, Heartland Boy has decided to take profit on Dutech. Steel, which forms a significant portion of Dutech’s cost of production, has been trending up during 3Q2016. Further, given that it is a S-Chip stock, Heartland Boy is afraid that it will be more sensitive to panic selling. However, given that Dutech is a critical supplier to Diebold and Wincor Nixdorf, it is still a good stock. Heartland Boy is simply taking a super conservative stance here.
3. Sunningdale $Sunningdale Tech(BHQ)
Selling Sunningdale was an easy decision to make. It has fallen considerably since it hit a high of $1.20 in the earlier part of the year. Heartland Boy thought that Sunningdale would be more susceptible to panic selling and decided to reduce his holding. Even with a creditable 3Q16 results, its share price continues to languish around $1.05.
1. Lippo Mall Trust $Lippo Malls Tr(D5IU)
This REIT has appreciated over 15% since Heartland Boy’s first purchase in May 2016. Heartland Boy is not selling Lippo Mall Trust because the Indonesia retail sales index for July and August are relatively positive. Further, Rupiah has appreciated significantly the past quarter owing to the success of the Tax Amnesty programme. Heartland Boy is looking forward to a good set of results this quarter.
2. Croesus Retail Trust $Croesus RTrust(S6NU)
Similarly, there are a lot of positives going for Croesus Retail Trust. The Yen has surged over 12% compared to the quarter in the preceding year and it will also benefit from a full-quarter contribution of its yield-accretive purchases. (Mallage Saga, Feeeal Asahikawa, Internalisation of Manager)
3. QAF $QAF(Q01)
Heartland Boy is keeping QAF simply for the fact that it is solid and boring. Further, AUD has appreciated against SGD during 3Q16 and range between 1.01 to 1.04. This compares favourably to the range of 0.99 to 1.01 experienced in 3Q15.
4. Mirco-Mechanics $Micro-Mechanics(5DD)
It just released a creditable set of results despite the difficult conditions in the semiconductor industry. Further, Heartland Boy suspects that this stock is too illiquid to be affected by panic selling.
5. CNMC Goldmine $CNMC Goldmine(5TP)
Of all the stocks in Heartland Boy’s portfolio, CNMC Goldmine is probably the only stock that would rise in tandem with a surprise Donald Trump victory. As such, Heartland Boy is glad to have this counter in his portfolio as it provides some natural hedge against uncertain hedge.
Step 2: Prepare Your Shopping List
Using the Fundamental Analysis Criteria that Adam Khoo advocates, Heartland Boy has again found several exciting stocks on top of his existing portfolio.
Heartland Boy’s Shopping List For US Election 2016
In his previous investment strategy for BREXIT, Heartland Boy bought QAF, Lippo Mall Trust and Dutech from his shopping list. That the stocks appear in this shopping list could also give readers an insight into the future stocks that might be initiated on Heartland Boy.
Conclusion of Investment Strategy for US Election 2016
Whatever the outcome of the US Election 2016, it will be a bumpy ride on 9 November at the SGX. As Heartland Boy is very risk adverse, he has taken some conservative steps by selling some of his stocks to hoard on more cash. Currently, Heartland Boy’s portfolio is segmented into 39% cash, 48% equities and 13% insurance. He is looking to deploy up to a further 14% of his cash into equities. Given that there are also several SRS promotions around year end, he may look to max out the contribution limit if the STI ETF falls to a very tempting level.  So, what is your investment strategy for US Election 2016?
The post Investment Strategy For US Election 2016 appeared first on Heartland Boy.

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When to Buy Stocks In Singapore
- Original Post from Heartland Boy

Earlier, Heartland Boy wrote about the tiring process of finding the real prince from the pool of frogs. Readers may be disheartened to learn that that is only Step 1 in Adam Khoo’s proven investment strategy. The fundamental analysis merely tell you WHAT stocks to buy on SGX. Therefore, the next logical question to ask is WHEN to buy stocks in Singapore. Indeed, to make consistent profits from the Singapore stock market, it is not enough to simply identify a good stock, it is equally important to buy a good stock at the right time. Therefore, after identifying undervalued stocks, Heartland Boy merely puts them into his shopping list and waits for the right time to buy.

Why It Is Important To Know When To Buy Stocks In Singapore
It is often true that one feels that he has purchased a stock with very strong fundamentals but the stock price keeps going down in the short term. This can indeed be frustrating and would dent the confidence of even the most experienced investors. This is because in the immediate term, the market is driven by emotions such as fear and greed. Therefore, it is important to buy only when the emotions are on your side. This explains the “Momentum” part of Adam Khoo’s Value Momentum investment strategy for Singapore stocks. Therefore, besides Fundamental Analysis (‘FA’), Adam Khoo explains that it is also important to also perform basic Technical Analysis (‘TA’).
What is Technical Analysis?
“It is so cheap now, surely it cannot fall anymore.”
This is a sentence commonly heard and carries even greater significance when attached to super-growth stocks and blue chips. However, this is a very dangerous myth to live with. For instance, in his short investment journey, Heartland Boy has witnessed how investment darlings such as Ezion, Super, Sembcorp, Noble etc have all fallen over the cliff again and again. He counts himself extremely fortunate not to have bought these stocks despite the strong persuasion of his peers and stockbrokers.
That is because it is impossible for anyone, let alone a retail investor, to fight the might of the market. Therefore, it is imperative that TA is done so that the investor reads and understands the emotions of the market with a good degree of confidence.
For instance, when the market is optimistic, buyers are willing to bid higher prices to get their hands on the stock. This is likely to result in an uptrend, which is characterised by a series of stock prices making higher high points and higher low points. Therefore, the probability that the price of your stock increases in an uptrend is considerably high. The converse is true for a stock facing a downtrend.
Trend Reversal For $Innovalues(591)
Using Innovalues as an example, you would want to be holding the stock in March 2016 when it is on an uptrend. Along the same vein, you would not want to hold on to the stock during August 2016 when a clear downtrend has emerged. This was exactly what Heartland Boy did; he sold Innovalues in August at $0.96, pocketing an annualized gain of 38%. Yes, it is true that Heartland Boy missed out on the general offer to delist Innovalues at $1.01 made in October. But do not forget that he need not sit through the trauma of seeing Innovalues plunged back to $0.79 just before the general offer.
Therefore, it is important to be able to identify trends and react whenever trend changes. As such, Heartland Boy is going to reveal 2 simple tips that will help to improve your technical analysis. Only when stocks in your shopping list meet these 2 criteria do they become stocks to buy now.
50SMA Must Be Above 150SMA
SMA stands for Simple Moving Average. It is formed by computing the average closing price over a specific number of periods. Its only purpose is to smooth the various closing prices to form and define the current trend direction. Therefore, a 50SMA is computed by adding up the closing prices of the last 50 days and dividing the sum by 50. Heartland Boy understands that this definition can be too technical, so he shall illustrate this with a Mathematics question typical in Singapore’s primary schools.
Explaining Simple Moving Average
The SMA for Year 1 is 52.5 while the SMA for Year 2 is 55. Readers can treat Year 1 and Year 2 as 2 different time frames that result in 2 different average values. Having explained the concept of SMA, a stock is in an optimistic mood when the 50 SMA is above the 150 SMA. Here is an example of a stock whose 50SMA is above 150SMA.
QAF: Example of 50SMA Above 150SMA
Note that the 50SMA is the blue line while the 150SMA is the red line. You can also request for these indicators on your brokerage platform. However, do note that charting tools are not available on uber-cheap Standard Chartered Online Equities Account. Therefore, you buy stocks in Singapore when its 50SMA is above the 150SMA.
2.Both 50SMA and 150SMA Are Sloping Upwards
To ensure that you buy shares in Singapore at the right time, you must also pay attention to the second tip. The criteria to fulfill here is that both the 50SMA and the 150SMA must be sloping upwards.  
Heartland Boy would like to show you an example whereby a stock has fulfilled the FA criteria, but he did not purchase it immediately. That decision saved him a ton of money.
Sarine’s 150SMA still sloping downwards
From the picture above, Sarine has plummeted from a high of $3.30 to a low of $2.40. Retail investors may think that it is a good time to enter after such a steep correction. However, based on Adam Khoo’s simple Technical Analysis, you should not buy in July 2015 because:
50SMA is not above 150SMA
50SMA is sloping upwards but 150SMA is still sloping downwards.
However, Heartland Boy did buy Sarine in April 2016 when both TA criteria were fulfilled. He subsequently sold it for an annualised profit of 11% in September when he noticed that both the fundamentals and technical analysis have deteriorated.
Therefore, the lesson here is that if your undervalued stock is still on a downtrend, you need to be patient and wait for it to reverse into an uptrend. You never know when the bottom is indeed.
Examples Of Stocks Heartland Boy Purchased Recently
Therefore, if the 2 criteria outlined above are fulfilled, it is the right time to buy the stock. With that, perhaps you can understand why Heartland Boy purchased these stocks recently.
$CNMC Goldmine(5TP) In Optimistic Trend
$Dutech(CZ4) In Optimistic Trend
Conclusion Of When To Buy Stocks In Singapore
Some may argue that this technique “misses” the bottom. For instance, wouldn’t it be better to have bought Sarine at 1.3 compared to Heartland Boy’s entry price of 1.65?  However, Heartland Boy is willing to trade off “missing the bottom” for a higher probability that his stock is in an optimistic mood. Do note that this technique does not guarantee that your stock price will increase after you have bought it. It simply gives you a high probability of success. This also implies that you need not be right all the time, you simply need to be right most of the time.
The post When to Buy Stocks In Singapore appeared first on Heartland Boy.

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Target Price

$Dutech(CZ4) is an undervalued gem. Despite the run-up this year, I still think there is room left for the stock to go!

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$Dutech(CZ4) passed my FA criteria test. Read all about this undervalued gem here.

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