Investing

A new lesson for investors

 

Just basing on FA and TA to buy shares will not make you rich. You need some business sense to be rich.

Both JAKS and Eversendai have reported losses in 2016, last year. All the expert accountants basing on audited accounts, would not buy them because they could not see the future of the companies. They have no business sense and they do not care what the companies are doing.

They will only buy when the companies show profit and when the price charts show that the prices have gone up higher than the 70 day moving average.

As show on the price charts, JAKS has gone up from Rm 1.00 to Rm 1.58, a rise of 58%, in the last 5 months and Eversendai has gone up from 58 sens in January to close at 98 sen yesterday, a rise of 70% in 5 months. They are still waiting for their prices to go higher than the 70day moving average to start buying. By then many shareholders will be selling and laughing to the bank.

Why are these accountants missing this golden opportunity to make money?

JAKS:

You can see from the price charts that JAKS has gone up from Rm 1.00 in January to close at Rm 1.58 yesterday. In fact, in early April it shot up to Rm 1.72, a rise of 72% in about 4 months with an average daily of more than 3 million shares. In fact, the average daily turnover in the last 4 weeks is 3.3 million shares.

As announced by the company I own 96.5 million shares which I have bought in the last 4 months. Since the daily turnover is more than 3 million shares, there must a lot of people also buying and selling the shares. I alone could not have bought so much shares to push up the share price so rapidly.

My sole reason to buy JAKS is because the company secured a contract to construct 2 X 600 MW coal power plant to sell electricity to the Vietnamese Government.

To ensure that the whole project can be completed satisfactorily, the company managed to subcontract the whole project to the Chinese JV partner who has been involved in 90 percent of the coal generated electricity in China. They must have studied the power purchase agreement (PPA) and are prepared to undertake such a large investment of about Rm 7.5 billion.

In return, JAKS will receives about RM 400 million during the construction of the power plant and 40% of the profit every year from the electric sales for 25 years.

From the recent announcement, you can see that the company has received an initial of about Rm 60 million out of the Rm 400 million. Unfortunately, a large part of this profit was used to pay for the interest charges for the loan taken for its property development business.

I bought so much JAKS because it is sure of making huge profit. It has a very good profit growth prospect which is the most powerful catalyst to move share price.

Eversendai:

You can see from the price chart that Eversendai has gone up from 58 sen in January to close at 98.5 sen, a rise of 70% in 5 months. Record shows that it average daily turnover in the last 4 week has been 6.24 shares.

As announced by the company, I own 52.7 million shares which I bought in the last 5 months. I became the 2nd largest shareholder of the company. I could not be the one pushing up the price so rapidly basing on the daily turnover of 6.24 million shares.

I bought so much Eversendai shares because I am very impressed by its fantastic track record. If you look at its website you will know what I mean. From my long experience in the construction industry, I know that the company is specialised in huge steel structures which has less competitors. As a result, the company can secure large volume of business. Recently the company issued the following press release:

EVERSENDAI SECURES CONTRACTS WORTH RM 1.3 BILLION IN 2017 Eversendai with presence in 15 different countries, today announced that it has secured projects worth RM557.6 million to-date, bringing a total of RM1.3 billion projects secured for the year 2017. The company has secured the historical largest volume of contracts and it has written off all its losses in the oil and gas investment. I believe it will continue to show increasing profit.

 

I am obliged to inform you that I am a substantial shareholder of each of the 2 companies and I am not asking you to buy or sell. If you decide to buy or sell, you are doing it at your own risk.

 

 

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