Yesterday I posted my article “Dayang-when did I start to buy and when will I sell”. My article has helped many people made money. Unfortunately, many people misunderstood my intention. Some people say whenever I recommend buy they should sell and vice versa.
You can see I have written a few buy recommendations before. Since the price is dropping, many of readers are interested to know my opinion. Moreover, a few people including BatuHitam who posted his article “Exposing KYY’s nonsense” on i3investor. They are angry because they must have bought it when the price has already gone up a lot.
Fortunately, many of my followers who have bought it earlier were thanking me for giving them ANG POW for the Chinese New Year as you can see their comments from i3investor.
That is why I need to write this piece.
As I said many a time before, no share can go up or come down continuously for whatever reason. After some time, it will correct itself as some investors will start to sell to take profit. After it has dropped for some time, some cash rich investors will start to buy to push the price up again.
Carimin is a good example. When I saw its profit growth for its 2 consecutive quarters, I started to buy.
When did I start to buy:
4th quarter of financial year ending June 2018 EPS -6.82 sen. 1st quarter of financial year 2019 EPS 5.01 sen which was announced on 29th Nov 2018 which complied with my golden rule, I started to buy it on 30th Nov 2019 when the price was around 28 sen. It shot up to 93 sen, 330% increase within 3 months.
You would be considered a foolish investor if you did not sell at or near its peak.
KYY Golden rule for share selection:
The company must report profit growth for 2 consecutive quarters before I decide to buy it. In addition, it must be selling below PE 10.
Among all the criteria such as NTA, Cash flow, dividend yield, debts, liabilities, cash in fix deposit, profit etc profit growth prospect is the most powerful catalyst to move share price.
When will I sell?
No share can go up or come down continuously for whatever reason. After some time, it will correct itself as some investors will start to sell to take profit. Based on this guideline I started selling. As you can see the daily volume is more than 10 million shares, there must be many other sellers. You cannot blame me for selling. I know many smart investors also follow me to sell to buy Dayang.
After it has dropped for some time, some cash rich investors will start to buy to push the price up again, just like now, as I am writing. It has gone up 4 sen with 7.9 million shares traded after 1 hour in the morning.
Why I will also sell?
I will also sell as soon as I see the company report less or reduce profit for 2 consecutive quarters. You must bear in mind that many company’s product or services are seasonal. I will not simply sell, when I see the company reported reduced profit for 1 quarter because its product or services may be seasonal.
I will also sell any of my holdings if I found a share with a better profit growth prospect than any stock among my holdings.
What is my target price for Carimin?
1st Quarter EPS 5.01 sen and 2 Quarter EPS 2.25, total 7.26 sen. Bearing in mind that its 2nd Quarter from Sept to Dec, was N-E monsoon period during which the company did less work.
Assuming its earning for the 2nd half year is the same as the 1st half year, its annual EPS will be 7.26 X 2 = 14.52 sen. Even if I based on P/E 10 which is very safe, my target price is Rm 1.42.
Many smart investors with good foresight can foresee its annual profit before the end of its financial year ending June 2019 which is about 6 months away.
Please note that I am not asking you to buy or sell. If you decide to buy or sell, you are doing it at your own risk. In any case, whether you buy or sell will not affect the share price because the daily volume often exceeds 10 million shares.
I believe Carimin has a lot more to go from the current price of 74 sen.
Note: To be really successful, investors must also have some knowledge of financial and technical analysis, understanding of human nature and business sense.
