Important time-tested proven market rules or tips

AYS - Buy on breakout from a symmetrical triangle

OTB
Publish date: Thu, 03 Feb 2022, 10:44 PM
OTB
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To educate investors the correct method to invest and trade stocks globally.
To educate investors to create a second income without having to quit their jobs.
To educate investors to make money from stock market consistently month after month.
Following Message

Dear valued members,

 
Special note:
This is an educational program, stock selection criteria is based on TA and FA facts. 
This article is strictly for reference only. It is not a buy recommendation. Never trust anyone as far as your investment is concerned. Please do your homework before you decide to invest. It is your money, you make your own decision and you are responsible for the final outcome.

I have a certain code of ethics when I write my article in I3.
If the article is beneficial to all the readers here, I will write and post it.
If it is harmful to the majority, I will avoid it at all times.
I have followed this code of ethics since day one when I posted my article in I3.
 
I want to make this report short and easy to understand.
 
My stock selection criteria
Below is my stock selection criteria, I want all of you to remember this keyword "UBS GMF". 
AYS passed 6/6 of my stock selection criteria.
 
TA comes first
U - Up trending stock -  Cross 200-day SMA - Passed
B - Breakout chart - Break above 0.67- Passed
S - Sector to focus - Cross 200-day SMA -  Passed (Ind/Prod - Metal)
 
FA comes second
G - Growth > 206% per year -  Passed 
M - Margin of safety > 33% - Passed
F -  Forecast current year EPS must be better than previous year EPS - Passed 
 
Please note that I consider TA ahead of FA in my stock recommendation.
 
Enclosed are the latest technical charts of AYS (daily and weekly) for your perusal.
 
TA readings
  1. There is a symmetrical triangle formed in both the daily chart and weekly chart of AYS.
  2. The Parabolic SAR buy signal appeared on the daily chart on 26/1/2022.
  3. The share price of AYS breaks above 20-day EMA at 0.645 on 27/1/2022, it is a buy signal.
  4. The share price is above the "Golden Cross Buy" signal which is at 0.66.
  5. The share price showed a breakout from a symmetrical triangle.
  6. Parabolic SAR, Stochastic and Daily MACD buy.
  7. Daily MACD buy signal, both Blue and Red lines crossed above zero level.
  8. The share price of AYS crosses above 0.635 in the weekly chart which is the 20-week EMA. 
  9. Parabolic SAR displayed a buy signal for 5 consecutive weeks.
  10. I believe the uptrend momentum is very strong for AYS and the share price is bullish.
  11. I believe the share price of AYS has gone through A,B and C corrections. 
  12. I also believe the share price of AYS has gone through Wave 1 and Wave 2 correction. 
  13. It is on the Third Wave up which is the strongest wave up among all the major 3 waves up.
FA report
AYS
Good Q2 2022 quarter results
  1. Please read the below link.
  2. https://www.malaysiastock.biz/Corporate-Infomation.aspx?securityCode=5021
  3. There are 4 consecutive quarter of growths in this stock.
  4. The Q2 2022 result is anticipated to be affected by MCO lockdown. 
  5. The EPS of AYS for first half  = 0.15, I believe EPS of AYS for the second half will be at least = 0.13.
  6. Total EPS for FY 2022 = 0.28.
FA report
  1. The Q1 2022 result showed record Revenue and PAT for this company.
  2. There is a strong growth of PAT and Revenue in Q1 2022 result. I believe all steel stocks will perform well in the next 2 years.
  3. Q2 2022 results of AYS was affected by MCO lockdown.
  4. Since there is no more MCO lockdown in the future, hence next 2 quarter results will be good.
  5. Steelaris, a subsidiary of AYS is a one stop steel centre in Singapore.
  6. This subsidiary is the expert in steel sourcing and project management services for offshore, construction and marine service in Singapore.
  7. In the FY2020 report, Steelaris contributed 60% of the profit of AYS.
  8. A stronger SGD and recovery economy in Singapore will benefit AYS.
  9. The steel rebar future price is trading at RMB4,778 today which is good news to all steel stocks.
  10. The Q3 2022 result to be released in February 2022 will be very good in view of high steel rebar price.
  11. The EPS in the last 2 quarter results is equal to 0.15, I still believe the next 2 quarter results will be good like Q2 results since there is no more MCO shutdown in Malaysia.
  12. I project EPS for 2022 is equal to at least 0.28, at 0.67, the PER is only 2.39 times.
  13. I like AYS because it is trading at a forward PER of around 2.39 times. It gives a total of 6.0 sen as dividend for a year. The dividend yield is around 10%. 
Recommendation
  1. I spent the whole night reading through the financial report of AYS, I am very impressed with the growth of AYS. I do not want to miss out on this stock. 
  2. TA of AYS is just coming out from consolidation, it is bullish now. It showed a breakout from a symmetrical triangle.
  3. I like the technical chart because the share price just crossed the "Golden Cross Buy" signal convincingly.
  4. The share price of AYS closed at 0.695 on 3/2/2022, I strongly believe the share price is still very cheap in terms of valuation.
  5. The share price of AYS has started to be bullish and I believe it will cross the resistance at 0.73 soon.
  6. I am very bullish on the share price of AYS, I believe the present share price is undervalued. The share price will skyrocket up the roof once the share price crosses 0.73 convincingly. I believe more investors will buy this stock once the share price is above 0.73 because the share price is confirmed to be on the Third Wave up which is the most impulsive wave.
  7. Once the share price is above 0.73, it is on the way to break the major resistance at 0.94.
  8. I believe the share price of steel stock will perform very well in the next 2 years because China is no longer exporting steel products below cost to the whole world. 
  9. The share price of steel stock 20 years ago was very high because there was no dumping of steel products below cost from China. I believe the share price of steel stock will rise up slowly and surely in the next 2 years.
  10. I believe Covid-19 pandemic is slowly recovering in 2022 because of the effective vaccines. Once Covid-19 pandemic is under control, 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.
  11. 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. 
  12. AYS has very good fundamentals if you read the financial report in great detail. I am very impressed by the strong growth of Revenue and PAT in Q1 2022. I believe the good FA of AYS will justify the share price to be at least at 1.00 in 2022. 
  13. Buy and hold will be a very good strategy to win big on this stock.
  14. AYS is no longer a penny stock after 2022, the Revenue is more than a billion in 2022.
  15. I am recommending a Buy on AYS and I will set my initial target price at 1.00 in 2022.
  16. I recommend buying AYS around 0.67 level. If you buy at 0.67, the potential gain is 49%.
 
The final decision to buy is always yours.

Thank you.  
Ooi
寧可天下人負我, 休教我負天下人
 
Disclaimer :
This is an educational program, stock selection criteria is based on TA and FA facts.   
Please be informed that the aforesaid stocks are solely for the purpose of education only ; it is neither a trading advice nor an invitation to trade. For trading advice, please speak to your remisier or dealer representative.
The final decision to buy is always yours.
 
My FA report
Enclosed is my FA report for your perusal.
The target price in my FA report is 1.67.
 
AYS VENTURES BERHAD (5021) Intrinsic Value calculation  
KLSE stock selection criteria        
EBIT growth (%) >10%   123.14%  
EPS growth (%) >10%   205.76%  
PER <10                 4.39  
         
Description   Financial Year End : 31/03/2022
Year STD 2021 2022 Q1 Growth
Stock name   AYS AYS  
Share price   0.67 0.67  
No. of shares   380,420 380,420  
Market cap   254,881 254,881  
Sales   753,658 908,923 20.60%
Net profit   19,004 58,107 205.76%
EBIT   41,726 93,109 123.14%
EBIT Margin   5.5% 10.2% 85.03%
Interest Cost   12,802 11,097 -13.32%
Interest Coverage >9 3.259 8.390 157.43%
EPS   0.050 0.153 205.76%
P/E <=10 13.41 4.39 -67.29%
Current Assets   573,656 631,537 10.09%
Total Asset   707,311 764,229 8.05%
Equity   277,462 309,906 11.69%
Current Laibilities   393,094 411,793 4.76%
Total liabilities   428,689 447,367 4.36%
Property, plant and equipment   82,099 81,497 -0.73%
Stocks   278,048 311,613 12.07%
Receivables   238,639 283,421 18.77%
Payables   93,983 118,998 26.62%
Current Ratio >1.8 1.46 1.53 5.09%
Quick Ratio >1.4 0.75 0.78 3.31%
Borrowings   308,163 315,234 2.29%
Minority interest   1,160 6,956 499.66%
Cash & Securities   31,483 36,503 15.95%
Cash per share   0.08 0.10 15.95%
Net Debt   276,680 278,731 0.74%
EV = Market Cap + Mi + Borrowings - Excess Cash         532,721         540,568 1.47%
EV/EBIT <8.0 12.77 5.81 -54.53%
Earnings Yield >12% 7.83% 17.22% 119.90%
NTA   0.73 0.81 10.96%
Change in inventories (+) Decrease 58,020 47,585 -17.99%
Change in receivables (+) Decrease -33,625 -103,742 208.53%
Change in payables (+) Increase -16,198 26,702 -264.85%
Cash Flow From Operation (CFFO) >Net profit 45,916 59,528 29.65%
Free cash flow >10% sale 61,094 59,656 -2.35%
Proceeds from borrowings   15,419 6,909 -55.19%
Repayment of borrowings   -74,808 -74,808 0.00%
Dividend (cent)   0.00 1.50  
Dividend Yield   0.0% 2.2%  
Net profit margin (N.profit/sales) >8% 2.52% 6.39% 153.53%
Asset turnover (sales/t.asset) >0.5 1.07 1.19 11.62%
Financial leverage (Total asset/equity) <2.0 2.55 2.47 -3.26%
ROE >10% 6.85% 18.75% 173.75%
Price/Book Value <1.5 0.92 0.82 -10.47%
         
Method 1        
Target price (EV/EBIT=12)   0.59 2.19  
Current Price    0.67 0.67  
Margin of Safety   -14.36% 69.35%  
Potential gain   -12.56% 226.28%  
Method 2        
EPS     0.153  
EPS growth rate     2.06  
EPS(8.5+2(EPS growth rate))     1.93  
Current Price      0.67  
Margin of Safety     65.23%  
Potential gain     187.60%  
Method 3        
(22.5*EPS*Book value per share)^0.5      
EPS   0.05 0.15  
Total equity   277462 309906  
Number of shares   380420 380420  
(22.5*EPS*Total Equity/share)^0.5   0.91 1.67  
Current price   0.67 0.67  
Margin of Safety   26.00% 59.96%  
Potential gain   35.14% 149.74%  
         
Checklist STD   Actual Remarks
PE Ratio <=10 ; ≠ -ve   4.39 Good
ROIC (Equity) >12%   15.82% Good
ROIC (Asset) >12%   16.70% Good
ROE >10%   18.75% Good
CFFO > 50% Net Profit > 29054   59,528 Good
Price to CFFO <=15 ; ≠ -ve   4.28 Good
Free Cash Flow > 30% Net Profit  > 17432    59,656 Good
Price to Free Cash Flow <=20 ; ≠ -ve   4.27 Good
Cash Yield >4%   23.41% Good
EV/EBIT <8.0   5.81 Good
Earnings Yield >12%   17.22% Good
Price / Book Value <1.5   0.82 Good
Debt to Equity - (T.debt/T.equity) <=0.5 - 1   1.44 Bad
Net Debt to Equity <=0.5 - 0.8   0.90 OK
Net Profit Margin (N.profit/Sales) >8%   6.39% Bad
Asset Turnover (Sales/T.asset) >0.5   1.19 Good
Financial Leverage (Total asset/Equity) <2.0   2.47 OK
Interest Coverage >9   8.39 OK
Current Ratio >1.8   1.53 OK
Quick Ratio >1.4   0.78 Bad
         
  Current Target Gain %  
Actual Price 0.67 1.67 150  
 

 

AYS (5021)
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Discussions
3 people like this. Showing 5 of 5 comments

sensonic

WELL SAID,I WILL INVEST 1 MIL ON IT.

2022-02-03 23:47

sensonic

POST CNY RALLY START ON MONDAY ?

2022-02-04 11:01

ahbah

CNY angpow season is ON !

Go in n get your angpow$$$ !!!

2022-02-04 11:03

sensonic

I AM SO EXCITED POST CNY RALLY STARTING NEXT MONDAY...

2022-02-05 08:42

WHYO0001

thank you for this article..

2022-02-08 16:01

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