Monday, November 29, 2010

Commentary On Hot Stocks

Its been a tough week for the markets. You know people are disturbed when I have readers emailing me to ask me to stop with the sea creatures mastheads, and switch back to louts flower as they made a lot of money when the lotus flower appears as masthead.

Realistically, nothing much has changed an markets uptrend is intact but in a moving market it will always be susceptible to minor negative news as those will always be reason enough for people to take chips off the table. I do think its a good time to reload your guns, both for traders and fundamental longer term players as the markets whipsaw action brought quite a number of opportunities.

Some of the stocks to take a look:

Air Asia - I have not been keen on it for the longest time. However the recent 3Q 2010 PBT was a shocker on the upside. Looks like it has surged past critical mass. The second factor which is causing analysts covering the stock to scramble to upgrade Air Asia is the potential of its Indonesia operations - looks to be surpassing the size of Malaysian operations soon if not already. That is testament to a good replication strategy and the ability to transplant its business model successfully in the region. The execution ability will be well regarded as that can only hint of future successes in other regional countries for Air Asia. Now, maybe the plethora of Air Asia covered warrants will finally start to move up. Its currently at a 30% to regional peers, watch funds surge to buy the stock.

EAH - Maybe its because of the missiles thingee but many investors may have missed the fact that it is trading cum-free warrants on Tuesday 30 Nov, which means its the last day to buy and still be entitled to the 1-for 2 free warrants. As the warrants are exercisable at 59 sen, its a no brainer. Company fundamentals are intact for this new kid on the block. Recently visited the company and am confident with their outlook. It does not want to be just another ACE company but with grander plans to move to the next level via smart acquisitions. Pipeline is healthy with a good chance of securing a couple of significant GLC related contracts, which should make current valuations cheap in 3-6 months time.

IJM Land / IJM Land-W - Both suffered the North Korean dengue, but among the recent flurry of property mergers, this looks to have the better upside. Even though it may take 6 months for the merger to be completed, the price is now too skewed to the negative. All things being equal, IJM Land should be at RM3.30 and the warrant should be closer to RM2.05. Let it be known that IJM Land is about the only one which will get an upper hand in these recent mergers, most of the rest are a merger of equals, while IJM Land gets in with something in hand and more.

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.


Ooi Beng Hooi said...

Will the share price of EAH be adjusted (theoretical fair value of RM 0.078965) ex free warrant?

Salvatore_Dali said...

no, there should not be any adjustment

kl said...

The market, not the Exchange, will make the adjustment to EAH share price when it trades ex-warrant.

surewin1woh said...

EAH will annnouce Q3 result tonite and it will be good....tomorrow can flyyy

offstonee said...

This Airasia growth is fanstastic, but not sure how much crude oil derivative aka hedging still on their hand. They got burned once, hope that they learned the lesson.

Dali, any idea on this?

ronnie said...

I am not sure which is more amazing, your ability to find top performing stocks or gorgeous babes (to die for). Keep up the great work.

Yick said...

Hi Dali,

I always have this question on my mind. The theory about the market being wrong once in a while and a deep deep deep value share is being miss-priced. How do we know if it is not something fishy hapenning behind the company or that the market is really being wrong?

Wall Street KLCI said...

Hi Dali, wonder where is the beautiful scene (of the lotus) taken? Is it in Malaysia?

Salvatore_Dali said...

yick, u have to give specific stocks for me to comment.

wall street, i took them at the beautiful clearwater sanctuary golf club near ipoh ... i am not a photography buff, n using my pariah camera also can turn out decent shots.

Alex said...

Hi Dali, what say you about SPSETIA...the price is holding steady.

And what you say about IFCAMSC's corporate exercise?

And what EAH is not moving with its free bonus warrants and what you would expetec the warrant price will be.

1000 thanks.

jeremy tan said...

Hi Dali,
What are the chances of Sime Darby property division and Sp Setia merging?


Akagi Shigeru said...

Dali :
I hold some position in EAH. I have to agree with its potential. I believe it is going to buy 51% of DDSB Sdd. Bhd. with it's issuance of new share. I would appreciate your view on this. I have been looking for information about DDSB but to no avail. Any information that you would like to share ? Thnaks.