Stock Pick Challenge 2013 2H
Stock Pick Challenge - [LBS-WA] by OTB
LBS-WA Stock Chart as at 16-08-2013
Dear valued members,
You should be realistic about your goals.
"In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten." Peter Lynch
Disclaimer: Please be informed that the following mentioned stocks / symbols 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 dealer representative or remisier or financial adviser. Please buy at your own risk. Final decision is yours.
The 5th stock I wish to select for second half of 2013 is LBS-WA.
My trading plan
This stock is an up trending stock (daily, weekly and monthly).
The stock price was hitting new high (current) at 0.525 on 18/7/2013. The price goes through a correction and closed at 0.49 on 2/8/2013.
Major resistance is 0.525.
Major support is 0.405.
Target price = 1.00.
Margin of safety = 51%
Potential profit gain = 104%
Cut loss at 0.39 = 20.0%
Risk reward ratio at 1.93 cut loss = 1 : 5.1.
Recommendation from CIMB = Target price for LBS is 3.03, LBS-WA is 2.43.
Technical Chart.
A very nice up trending stock formed. A Cup and Handle chart was formed with pivot line at 0.51. The buy signal is at the Handle which is the reason I like this stock. There will be a good chance to hit our target price of 1.00 if the major resistance at 0.525 is crossed convincingly. A Cup and Handle chart formation is always a bullish chart.
Conclusion
Recommend to buy at 0.49 on 2/8/2013.
Please review the report done by CIMB using the below link.
http://research.cimb.com/
[Tan]: CIMB Research on LBS posted on i3 - http://klse.i3investor.com/blogs/cimbresearchklse/34260.jsp
Posted by Ooi Teik Bee at Aug 5, 2013 02:37 PM
Dear valued members,
I feel that Method 4 is more appropriate, hence there is only 1 method of calculating Intrinsic value.
LBS IV Calculation
Total Net Profit Years 9/10
Total Positive Operating Cash flow Years 5/10
Total Dividend Payout Years 4/10
Total Positive free Cash flow Year 4/10
Growth%
10 Years Average Turn Over 365955
Latest 4 quarters 528270 44.35%
10 Years Average Net Profit 22498
Latest 4 quarters 44187 96.40%
| 2011 | 2012 | 2013 | Growth% | |
| EPS (Cent) | 8.87 | 10.18 | 11.17 | 9.72% |
| PER | 16.23 | 14.15 | 12.89 | 8.86% |
| ROE | 8.12 | 8.35 | 8.39 | 0.48% |
| NTA | 1.1 | 1.16 | 1.19 | 2.59% |
| Dividend | 2.5 | 2.5 |
| 2011 | 2012 | 2013 | |
| NP/ (NL) | 34,300 | 37,160 | 44,187 |
| Equity | 422536 | 445105 | 526831 |
| ROE | 8.12% | 8.35% | 8.39% |
Price CAGR % (Buy and Hold)
Average Return History -8.13%
3 yrs Return 35.41%
Method 4
(22.5*EPS*Book value per share)^0.5
EPS 0.11
Total equity 526831
Number of shares 395322
(22.5*EPS*Total Equity/share)^0.5 = 1.83
Current price 1.44
Margin of Safety 21.32%
Potential gain 27.09%
Warrant
LBS-WA
Expiration date 2018
Exercise price 1.00
Price of Mother share (LBS) 1.44
Intrinsic value of WC 0.44
Actual price of WC 0.49
Premium or Discount 3.47
Gearing 2.9
Conclusion
If the price of LBS 1.83, the price of LBS-WA should be (1.83 - 1.00) = 0.83.
If it is trading at 20% premium, the price of LBS-WA should be (0.83*1.2) = 1.00.
Potential gain = (1.00 - 0.49)/0.49*100 = 104%.
Thank you.
Ooi
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
More articles on Stock Pick Challenge 2013 2H
So what is wrong with the pick on Kumpulan Fima which lost 2.4% since a year ago? - kcchongnz
Created by Tan KW | Jan 02, 2014
Hexza and Graham net-net and high dividend yield investing strategy - kcchongnz
Created by Tan KW | Nov 08, 2013
Graham Net-Net Investment Strategy and some property companies - kcchongnz
Created by Tan KW | Sep 06, 2013
Discussions
1 person likes this. Showing 44 of 49 comments
j harcharanjit a/l jalaur singh dhillon
in your stock pick i do not see mother share LBS?
2013-08-06 07:37
Made a few hundred for LBS too(Unfortunately not LBS Wb). Good for a Angus steak meal for my family.
2013-08-07 09:40
TanKW, i have about a dozen stocks as investment. good enough as a diversification, I think.
this doesn't include my trading for some normal stocks and warrants. those are fast turnover for fun.
2013-08-07 10:01
These 3 rules have re-made OTB a millionaire many times over !
It is the most sincere sharing of a nice gentleman like OTB who have
gone thru the extreme torturous primary cycles of KLSE.
A man who fought this endless 'financial war' n re-invent himself
financially back to the mainstream of stock mkt.
If he can make it, U too !
2013-08-09 07:41
OTB, just a question. Now that LBS WA has shot up to 69 sen, would the principle of buy high sell higher still applies, meaning if one were to enter at 69 sen does he still have a chance to make gains.Thanks
2013-08-09 08:48
Bro Ooi , I learned something new from you today , tq for your unselfish sharing.
2013-08-09 12:24
mr ooi
i have been following your post on i3investor but do you have another link cos some of your stock picks i cant see. please direct me to your link.would appreciate very much. tq
2013-08-09 20:09
ph94, just click the header Blog: Stock Pick Challenge - [LBS-WA] by OTB and you can see all the stocks selected.
2013-08-09 20:34
Dear Mr Ooi
Thank you for your unselfish sharing of your trading knowledge ...
2013-08-09 21:32
The best performing stock in KLSE in 2013. Darling stock of the year 2013.
Thank you.
Ooi
2013-08-15 16:52
otb, what do you think ? is the trend against the fundamentals of TA ? There is no correction so far !
2013-08-15 17:48
Dear Ooi
I am new in this forum, Have been looking on LBSWA for quite awhile. But did not enter due to worries on correction. what is your propose recommended price to go in.
2013-08-15 21:37
Use Fibonacci retracement to find out the support price. You need to take the top and the bottom of the current up trend.
Thank you.
Ooi
2013-08-15 22:54
Mr otb, LBS WA still going up despite the poor market condition. I reckon it defeats all the principles of TA. Do you agree that the trend is against the norm as you have expecting a pullback since it touched above 70 sen.
2013-08-16 09:17
Dear MR Ooi,
looks like there's no stopping for LBS-WA couple with more positive announcement planned on tuesday. Is the price too high now to go in ?
2013-08-17 13:24
I will not buy now, wait for pull back. Please be patience to wait. Please note that I buy stock always very slow because I want my probability to win to be high.
Thank you.
2013-08-17 13:37
dear mr ooi
if you are free please analyse stock 0083/notion, its on the uptrend.
tq
winman
2013-08-17 14:14
This few days tumpang Ooi Teik Bee's LBS warrants and Hap Seng warrants. "Damn song".
2013-09-20 16:47
Dear Mr Ooi,
Could you advise on method 4? what is the method called?
(22.5*EPS*Book value per share)^0.5
22.5 and multiplication of 0.5? how to derive these values or it is just a formula?
2013-10-06 15:12
@In1792,
Yes. A buy signal was generated, it is on up trending now.
@Miketyu,
This is just the formula. Please note this is to a power of 0.5, not time 0.5. This is called Graham Method.
Thank you.
Ooi
2013-10-06 15:34
Dear Mr Ooi
Good Day and sorry for disturbing
I have read through your ways in the calculation of intrinsic value of a stock and I particularly found it to be very useful. One thing I wish to clarify is that in one of the methods, IV= NTAx EPS/Rr. I couldn't make out what Rr represents and if I remembered correctly, Rr was most of the time fixed at 8. I wish to know more about Rr. Thanks again Mr Ooi.
2013-10-06 18:47
tansrihew Mr Ooi. how do do get the book value per share?
Ans : It is the definition of Graham number. Actually book value per share is = Total equity/Total number of share outstanding (paid up).
Hope you can understand.
Thank you.
Ooi
2013-10-06 23:48
Dear dextronium,
Rr is the Return required for your investment. I always take 8%.
Ans : In Malaysia, BLR is 6.6%. If I invest in stock, I want my investment return to be at least better than BLR. Hence I use 8%. Most of unit trust in Malaysia, the max return is about 8%. I also refer to this rate.
Thank you.
2013-10-06 23:54
Dear Siva68,
The exercise price of Censof warrant is 0.46, hence it is not worth to buy warrant. I will prefer mother share.
TA is ok for Censof, the earning per share is not impressive for last 2 quarter, hence I conclude FA is not good for Censof.
I am not keen on this stock despite beautiful story behind this stock.
Thank you.
2013-10-07 00:04
Thanks Mr Ooi and Kcchongnz.
Btw,I have read some Peter Lynch's method using PE/Growth to calculate the fair value of a stock. Graham's or Peter's method is more applicable to the stocks in malaysia? THanks in advance
2013-10-07 09:57
Post a Comment
Featured Posts
Apps
Top Articles
1
Nuclearinvestment
2
AmInvest Research Reports
STRATEGY - Local Institutional Support Drive Upward Momentum
3
Good Articles to Share
4
5
THE INVESTMENT APPROACH OF CALVIN TAN
6
M+ Online Research Articles
7
KLSE Traders Update and Ideas
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Ooi Teik Bee
Posted by Tan KW > Aug 5, 2013 03:15 PM | Report Abuse
the PDF link http://klse.i3investor.com/servlets/staticfile/222829.jsp
It is the correct one.
Thank you.
Ooi
2013-08-05 15:17