Opportunities In Out-of-favour Stocks

jinraidx
Offline
Junior Member

13 years 1 month ago #5687 by jinraidx

Replied by jinraidx on topic Re:Opportunities In Out-of-favour Stocks

Out of favor is one thing but I would urge everyone to check and do the proper due diligence. The risks of catching a falling knifes are high. As I mentioned to everyone previously about certain dubious companies like Hongwei, Gaoxian and Eratat, 2 of them have already have issues.

I think the most important thing is forget about the numbers first and look at past trasactions and corporate actions and ask yourself, does it make sense?

Next, check the story of the company and see the numbers if it ties in with the story.

Please Log in or Create an account to join the conversation.

Rich
Offline
Elite Member

13 years 3 weeks ago #5739 by Rich

Replied by Rich on topic Re:Opportunities In Out-of-favour Stocks

I doubt Eratat has issues - just a hunch and only time will tell. Eratat has attracted investors to take up recent placement and prior to that I hear that CMIA did a very thorough due diligence over 2 or 3 months before it decided to take up new shares. Anyway, Eratat stock is going nowhere - which is the sad part because it is a deep value stock. Will sitting on it for another 6 months make a difference?

Please Log in or Create an account to join the conversation.

jinraidx
Offline
Junior Member

13 years 3 weeks ago - 13 years 3 weeks ago #5747 by jinraidx

Replied by jinraidx on topic Re:Opportunities In Out-of-favour Stocks

For a investment as such, one should not rely too much on hunches or gut feel.
Where a significant risks of permanent capital impairment exists, it warrants a closer, in depth analysis of the company. And no, having PE firms that does due diligence does not count as a proper analysis done by the investor.
There have been several cases of PE firms doing due diligence for months and years and still end up badly charred by the investments. And I am not talking about local PE firms like CMIA but the global billion dollar ones.
Theres 2 level of looking at this firm.
1) Firm management is not wise in corporate actions and is reducing shareholder value, and/or
2) There may be some existence of dishonesty in dealings
Personally I have done some analysis and track the management rather loosely. (To me, there is further upside of digging deeper). And I have written it my blog below.
skewed-odds.blogspot.com/2011/04/koon-up...other-ramblings.html

To say its a deep value play, I think it is still early to say, even for the enterprising investor.

Last edit: 13 years 3 weeks ago by jinraidx. Reason: Shorten the prose

Please Log in or Create an account to join the conversation.

yeng
Offline
Platinum Member

13 years 3 weeks ago #5752 by yeng

Replied by yeng on topic Re:Opportunities - Dow up 187 pts!

Global stocks staged the biggest rally of 2011 and the Dow Jones Industrial Average reached an almost three-year high amid better-than-estimated results at companies from Intel Corp. to United Technologies Corp. and L’Oreal SA. Gold jumped to a record as the dollar slid.

Please Log in or Create an account to join the conversation.

Dongdaemun
Offline
Platinum Member

13 years 2 weeks ago #5785 by Dongdaemun

Replied by Dongdaemun on topic Re:Opportunities In Out-of-favour Stocks

I agree with jinraidx who probably has not lost a major amt of money. This is better than making big and losing big with a net gain of a small amount and not knowing if the next tsunami will wipe you off from the face of the earth.

Please Log in or Create an account to join the conversation.

yeng
Offline
Platinum Member

13 years 2 weeks ago #5847 by yeng

Replied by yeng on topic Re:Opportunities In Out-of-favour Stocks

So you are frustrated with ultra low S-chip valuations and others....U think the prices of US big caps are rational?

Amazon stock trades for 60 times earnings estimates. OK, u think it deserves this rich valuation.

But why does Apple trade for just 14 times earnings?

No, I didnt mix them up. Apple is 14 and Amazon is 60.

And get this ---- Amazon has 3.3% net margins. Apple has 18%.

Amazon grew its sales at 38% last quarter. Apple --- 83%. What the hell, people?

Please Log in or Create an account to join the conversation.

Time to create page: 0.229 seconds