Tuesday, March 30, 2010

Biosensors International: Should I Hang On?

Just a short post. i am holding on to 3 lots of Bionsensors International since last year. at one point, i was hanging on to about 50% paper gains. however, it has been on a serious down trend since the PRC government announced that it would try to make healthcare more affordable to its people.

For those who do not know Biosensors that well, it has often stated that it intends to penetrate the Chinese market rather than the developed markets of Europe or America, where in truth, it would be out-muscled by the bigger pharma boys.

I believe that there is long run potential for what Biosensors is doing. otherwise i would not have bought into it in the first place. however, i am faced with the fact that an industry earthquake occurred, significantly changing the competitive environment it is in.

Its FY10 results will be in end-May and most likely profitability would be sustained. my consideration right now is whether all the bad news have been priced in and whether will it permanently impair Biosensor's earnings growth. judging by the almost non stop fall from two weeks ago compared to a slight uptick in the broader market, a bottom should be reached any time soon

If the latter be the case, then i would be better off taking profit right now. however, the main hurdle i face is where do i park the proceeds should i really sell. i hate holding on to cash because the market seems to be fairly valued right now. do i have to start hunting for a stock again or buy into an existing one?

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