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The Falling Market

By Pehon | August 1, 2007

The current market thrend is making people like me look stupid. Extremely stupid.

Here I am preaching investment for the long term.

It was just yesterday that I recommended readers to buy shares they have been eyeing for a long time, while they have a relatively cheap valuation.

So what now. I’ve no change in my recommendations. if i had all the money in the world, I would start accumulating the following stocks. They have fallen far from their highs, and close to by previous buy price.

1. China Hong Xing - China Hong Xing is probably one of my worst hit stock in my portfolio. It has fallen from its high of $1.07 just a week back to the current price of $0.73. I find the fall in price uncalled for, and a contributing factor for this fall is probably the transfer of interest from China Hong to China Sports. China Sports is really a way smaller cousin of China Hong, with margins lagging behind China Hong Xing my considerable amounts. Its a matter of time that investors realise this. Short term catalyst for this realisation will probably come with the 1H07 results of China Hong Xing. With a consensus target price of $1.80 by 2 research houses, it will prove to be a very sound investment to accumulate at current price.
2. Aztech - Similiarly, just last week, Aztech was trading above the $0.7 levels, and the stock has been beaten by the correction, currently at $0.595 levels. Its in my opinion that at this price of $0.595, valuations of Aztech is extremely cheap. DBS has placed a target price of $0.93 on Aztech, and Aztech is consistantly met the target within months.
3. Breadtalk - Due to release their results on 13 August 07, I’m expecting revenue and profit growth in excess of 30% Y-o-Y. Just take a look at all the breadtalk brands in Singapore. And thats just Singapore. How about the further away businesses in China and Hong Kong. If anyone here missed my previous buy call and saw Breadtalk zoom to $0.69, and got kinda sore about it, maybe its your chance now. Breadtalk is a upcoming stock, and I’ll really categorise it as a good growth stock. Its a matter of time that research houses takes notices of its business, and start providing coverage (more investor interest)
4. Swiber - Still the star of my recommendations. It saw a high of $3.52 on 13 July 2007, and started to fall over the next few weeks to the current close price of $2.9. Even I was reluctant to accumulate more shares above $3.00. Its our chance now. Swiber has won contracts after contracts since they won the Brunei Shell contract that effectively doubled their entire year’s revenue. Its my opinion that the company is able to continue on their contract winning streak.

The above are just some of what I would buy from my coverage stocks. The above stocks have been sold, probably over sold over the last few days, and happen to be my worst hit stocks in my recommendations, and at current valuations, they present a good enough potential returns for a buy. Even Now.

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Topics: Aztech, Breadtalk, Swiber, Indexes&Economy, ChinaHongXing |

4 Responses to “The Falling Market”

1. WL Says:
   August 2nd, 2007 at 10:32 am

   Hi Pehon, good morning. FYI: your portfolio date is wrong. Regards

2. musicwhiz Says:
   August 3rd, 2007 at 2:00 am

   Pehon,

   For Swiber, I maintain a good entry level is below $2 as the company’s FY 2007 earnings with their current crop of contracts probably does not justify a market price of S$3. Unless they announce more clarity on margins and possible new customers, I prefer to remain cautious.

   Also, btw, the highest Swiber ever reached was $3.42, not $3.52.

   Cheers !

3. WH Says:
   August 5th, 2007 at 12:35 am

   What about Aztech warrant? Although it doesn’t qualify for dividend, do you think it is good to accumulate since the price is lower than the mother share.

4. silverover Says:
   August 12th, 2007 at 11:41 pm

   hi hi… think u must have missed my previous comments. in your previous blogs, u created a controversy by cutting loss on your china farm, and u also had an article on cutting loss and taking profit. did u exercise cut loss on the stocks u held for your portfolio?? if not, why? i am a firm believer of cut loss or take profit strategy, so I am a little disappointed when u didnt do the same…

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