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Author: milosh   |   Latest post: Tue, 13 Jul 2021, 10:44 AM

 

STEEL hype by KYY and OTB

Author:   |    Publish date:


Mr. Koon Yew Yin shared a short but really insightful post on steel industry which I think is really worth your time to read. Mr. KYY wrote his article to support OTB, so I write main to support the support! No really I fully agree with what was written, just that our preferred stock picks may differ, my pick is LSTEEL as their profits seems to me more “stable” and predictable. Previously I wrote a post on LEONFB HERE, which you should definitely check out.

 

As always I would like to stress this is not a trading recommendation, just expression of my personal view, please do your own "homework" when deciding to invest.

 

 

LSTEEL:

 

Prediction 4QR EPS: 16+ sen

Target Price based on P/E Ratio of 8: RM 1.28

Market Price 11 June 2021: RM 0.705

 

 

 

LEONFB:

 

Prediction 4QR EPS: 30+ sen

Target Price based on P/E Ratio of 8: RM 2.4

Market Price 11 June 2021: RM 1.21

 

 

From the above, it looks like no brainer to buy into any of these with LEONFB higher UP potential, if you think their EPS growth will continue exponentially. Even with current trailing EPS, both are very undervalued.

 

More posts on my BLOG.

 

 

Disclosure: Im holding LSTEEL

Disclaimer: Im not a professional financial advisor or a financial analyst or an economist or an accounter.
This is not a trading recommendation / advise, just my personal view

 


 

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  LimitUp likes this.
 
OTB I add the below information to support you.

I believe the share price of steel stock will perform very well in the next 2 years because China is no longer dumping steel products to the whole world. I hope the next up cycle is started again after a minor correction is over. China steel price rebounded strongly in the last 3 days.

The share price of steel stock 20 years ago was very high because there was no dumping of steel products from China. I believe the share price of steel stock will rise up slowly and surely in the next 2 years after China stopped dumping steel products below cost.

I believe Covid-19 pandemic is slowly recovered in 2021 because of the effective vaccines. Once Covid-19 pandemic is under controlled, all industrial nations worldwide especially European nations and the US will start to spend money on infrastructure, it will boost up the usages and the selling prices of steel products.

US President Biden's infrastructure plan will cost USD 2.2 trillion. I believe the steel products worldwide will be in a bullish uptrend for the next two to three years. Hence I have very high hopes for steel stocks listed in KLSE since China is no longer dumping steel products below cost in the world markets.

Thank you.
13/06/2021 10:46 AM
milosh Thanks for the additional info, much appreciated.
13/06/2021 11:11 AM
milosh btw. in this case PEG ratio can be even more interesting/informative, if we are expecting EPS will continue to grow... but the level of future growth is very speculative
13/06/2021 11:44 AM
shortinvestor77 When China makes U-turn in dumping steel products to the world, investors will start to regret that leopard will never change its skin.
13/06/2021 1:33 PM
milosh short: if that happens, but even if yes, impact is questionable as recovery and orders backlog will still play a significant role
13/06/2021 3:08 PM
BILLC Why this times masteel not in the recommended list ??
13/06/2021 3:29 PM
milosh billc: masteel EPS is low & growth very slow too compared to others in the sector:
EPS: 0.85 + 1.83 + 1.87 = 4.55 sen, if next QR EPS will increase to 3 sen, trailing EPS will be 7.55 sen X 8 (target P/E) = target price RM 0.6 ... I think its obvious.
13/06/2021 3:38 PM
milosh billc: explanation of EPS and P/E Ratio: https://miloshtrading.blogspot.com/2021/06/understanding-basics-profit-margin-eps.html
13/06/2021 3:53 PM
qqq3333 u can buy steel stocks as long as u are aware these are cyclical stocks.
13/06/2021 3:59 PM
qqq33333333 but nothing else to buy meh? u know when steel prices will come down meh? what is the demand curve in Malaysia
13/06/2021 4:01 PM
qqq33333333 cost driven not demand driven.... how much can these companies benefit?
13/06/2021 4:02 PM
qqq33333333 counter cyclical investors will sell to u..... hahaha
13/06/2021 4:03 PM
qqq33333333 why can't people just buy companies that are growing and in good industries? why buy so many steel counters?
13/06/2021 4:05 PM
qqq33333333 so u consider steel as low risk high reward shares meh?
13/06/2021 4:08 PM
qqq33333333 maybe u get the risk part wrong.... haha
13/06/2021 4:09 PM
qqq33333333 other people money very easy... own money not so easy
13/06/2021 4:12 PM
milosh qqq: I just presented my opinion on fair valuations based on earnings, if you are interested in other stocks/sectors I wrote about many actually: http://miloshtrading.blogspot.com
13/06/2021 4:14 PM
qqq33333333 Milo's I not criticising u.... I just write about the situation
13/06/2021 4:32 PM
qqq33333333 for a long time people also look at Serba as low PE low risk high reward shares.... but turn out to be a mistake
13/06/2021 4:34 PM
milosh qqq: I always welcome any opinion
13/06/2021 4:36 PM
OTB Posted by Sslee > Jun 13, 2021 6:26 PM | Report Abuse

U.S. President Joe Biden and other G7 leaders hope their plan, known as the Build Back Better World (B3W) initiative, will provide a transparent infrastructure partnership to help narrow the $40 trillion needed by developing nations by 2035, the White House said.

So all building material price will increase so are many commodities price due to every country printing more money.
14/06/2021 8:45 AM
Tiger66 Next QR will be very bad due to MCO , better sell
14/06/2021 9:06 AM
milosh tiger: don't think so
14/06/2021 9:15 AM
milosh note LBALUM is doing well too
14/06/2021 10:26 AM
milosh the best yet to come
14/06/2021 7:08 PM


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