Early offloading of long-timers

Sensing weakness closer to Chinese New Year, I have sold off three long time stocks - Auric Pacific, Etika (now Envictus) and UOB-KayHian - on the first trading day of 2015. Will now be observing the market for interesting stocks that I can buy into and maybe reinvest early in March.

Etika International: Possible big announcement

The share price of Etika cleared the 45 cents level, some 12.5% above its long time plateau of 40 cents, in a week mark by general market weakness. The graph above tells us two possibilities. One, it could be that the price is being pumped up before insiders cash in their options, or worse, a possible dilutive share issue. The cashing in of options has happened a few times although the price increase has not been that significant. Or two, it could be that there is a big announcement of either acquisition or buy in from a big player. These are speculation on my part but it is backed up by strong interest in the counter. I am invested in Etika so I naturally hope that it is positive news that will be announced some time next week. 

End-January Update

I was way off in my prediction for the the Punngol East By election 2013. The Worker's Party Lee Lilian overcame the People's Action Party's Dr Koh Poh Koon by slightly more than 10% of total valid votes. That was not the reason I was away for a while. For the past 2-3 weeks, I was called away and thus could not find the time to blog my thoughts nor could I access terminals to make any investments.

Back on my computer and my spreadsheet for tracking returns, I was pleasantly surprised that my total portfolio (including cash of around SGD 8,303) increased 14% compared to the STI 4%. This was due largely to news that Sam Goi was on board Etika International and that the monies raised from the earlier placement would be used for expansion plan. Follow the money.

Stocks that have fallen into my radar are Wilmar International, RH Petrogas and SingPost. I see Wilmar International as a short term sentiment play. The consensus is that this is not a SGD 4.00 stock but somewhere close to SGD 5.00. It has taken quite a beating the past few months due to weaker-than-expected margins. RH Petrogas is a small and illiquid stock which markets itself as the only pure upstream stock on the SGX. I feel that there is upside for this stock to SGD 0.80 but it might just be due to slow bid up. SingPost, well, is just the usual dividend play.

Sam Goi takes 14% stake in Etika

In a very interesting development, Sam Goi, the very prominent Singapore businessman has taken a 14% stake in Etika International. This caused an increase in its share price yesterday. Etika's share price has been sliding for some time and this is welcomed. Long term wise, I suspect that Sam Goi might use this stake as a way on injecting some of his assets (TYJ is not listed) but it just speculation on my part.

Etika FY12 earning down 23.8 per cent

You can read more about their results here and here. This stock forms the biggest part of my portfolio. Ever since the stock announced a bonus issue, its share price has been on the downward trend for a very long time. It has stopped announced new acquisitions but margins are still hurt by volatile raw material prices to the extent it has ventured into the retail F&B business. I know we should not have hope when investing, but I do hope that the stock recovers in its share price.

Etika shows recovery for FY 1Q2012/13

Revenue increased 19.6% to RM 246.7 million for the three months ended December 31, 2011. Profit after tax, minority interest grew 35.8% to RM 5.4 million. Margins have improved slightly due to stabilising of raw material costs. These numbers are not impressive but point towards a recovery as the company gains momentum in its effort to reap the synergies from its earlier acquisition. More here.

Bought 20 lots of Etika, sold off Asiatic

I bought 20 lots of Etika after selling my stake in Asiatic. I had thought of selling all losing positions but I felt that that would be too drastic. That would also require me to sell off my stake in China Animal Healthcare. Nonetheless, I am monitoring the market to sell into strength. I has been quite some time and some of these stocks do not seem to recover.

Bought 10 lots of Etika On Friday

Bought 10 lots of Etika International at 33 cents on Friday, bringing the total number of shares I have in the company to 30 lots. Was trying to queue for them at 32 cents but the market seems to be rallying up, having discounted all of Japan's nuclear woes. The purchase should bring my average cost per share to about 24 cents each. Will exclude them for the review due end of the month.

Etika International: Bonus Issue!

Etika Internatinal, one of my favourite stock has proposed a 1-for-1 bonus issue. That will lower the price initially and give it space to manoeuvre upwards eventually. yay!

Etika International Holdings: Great Company, Great Stock?

The below is excerpted from paid research done by NRA Capital dated earlier in February. Back then, NRA's Angelia Phua had a target price of $0.615. I believe it is due for a re-rating following a recent run up, possibly due to completion of several acquisitions in Vietnam and Indonesia.

There is some upside for the year with $0.80 being my target price for the rest of the year. This is premise on the growth of all its business units due to M&A, as well as, the return of consumption growth with the recovery. Potential pot holes along the way are rising costs of materials. Sugar and tin have been on an uptrend as well, with the former being hit by bad weather. This is a great company but overall not a great stock due to its poor trading volumes.

Capacity expansion to capitalize on growth opportunities