Opportunities In Out-of-favour Stocks

hey, i think Mac said in another thread that he didnt get to visit Qingmei.

anyway, I called up this thread cos I have a view to put forward --- at this moment, on this Sunday night, I can imagine the number of people who are sure the SG market will fall tomorrow morning (at least) if nt the whole day. The reason is the Dow had fallen somehting like 170 points on Friday NY time.

I am not 100% certain of a fall in SG tomorrow becos markets are basically unpredictable creatures and there are many factors that could cause SG mkt tomorrow to stay flat or to even rise. Of course it could simply fall --- here i am not contradicting myself. I am just saying at this point there is no certainty that it will fall. It might still fall  --- but I am not ruling out that it will rise!!!!

Same applies to individual stock picks -- how many times have we picked something with lots of confidence only to find they do not perform? And then the darn stocks that look uninteresting surprise us a few months later by rising 30%.

Dear forummers who follow qingmei,
 
I spent some time studying and researching QIngmei, and feel that its 4th quarter results is more probably better then Q3 for the following results.
1) From prospectus, factories stop production during "chun jie", that means qingmei manage to increase topline even after losing 15 days of production.
 
2) Demand side, from CTEI websites, marco conditions for textile and apparel industry continue to be favourable, up till may (5 mths), exports overseas from PRC for shoes went up 21.7% compare to a year ago. Sales of textile, including shoes, hats for 5 months went up 21.8%, PPI for clothing went up 4.4% in may, CPI, consumer price for textile remain stable, up 1.8%. So no worries from slowdown in China.
 
3) Xtep, one of the prominent customers of qingmei, 4Q sale fair secures order value up 24%, announced in 5-5-2011. I tried checking other prominent customers, but draw a blank... Even baidu yields no results.
 
4) Cost side, rubber, EVA, TPU made up almost 50% of the of the cost of raw materials, I check the prices, (From prospectus, their suppliers are mainly from fujian, I couldn't get such accurate reading, but found prices on these items in PRC from alibaba website, guess it should not be too far off), prices of EVA has been high since Q3 2010, and has remain relatively stable, although still high, but given the qingmei only signs 3-4 months contracts with supplier, the high price of EVA, should be already factored in in Q3 results. The same goes with TPU, prices are high, but are stable up till june, no sudden spiking of prices, unlike cotton, so the wild card of costs is relatively tame, and should not throw out surprises.
5) SInce QIngmei has a cash cycle of less than 90 days, it might not be useful to look at inventory, receivables and payables in Q3 to guage Q4, but the numbers are generally stable, except for payables.
6) So all in all, I expect Q4 to do better or worse come to worse, do as well as Q3, since the excess capacity would have already kicked in. So, observer2 full year forecast of earning might still be meet.
 
FInally, why bother to do all these research when you can know the results in 2 months time?? Well, first of all, its interest, and the responsibility in doing Homework, secondly, the counter in dirt cheap!!! at 19 cents!! I accumulate at 19.5 cents, with so many marco factors affecting sentiments, I would not be surprise if qingmei falls further. If it does falls further, I would accumulate futher! Next price for accumulation 15-16 cents. Hope is doesn't go there thou!!!
 
 
 
 
 
 

Several interesting development with the S-Chips in the market now. Share prices has plunged to super cheap status, however how many of these companies have insider buying at such a low price?
For me, i will not be buying anymore S-chips or either will i do an averaging down since the insiders are not buying even at 2-4x PE. Do we miss something or the insiders know something which we don't?
Did a review of S-chip as well as the small and medium cap counters on SGX. I think it is LIKELY to be a safer bet to buy into construction related stocks like Yongnam, Lian Beng, BBR which have massive book order till as far as 2014. 
These counters are already trading below 4 - 6x PE. Might be more expensive than S-Chip but definitely we have more visibility in their business. Singapore government is pumping up the construction of HDB flats, there will also be more projects to be released for public section which includes MRT. In this aspect, Yongnam has the competition advantage in MRT/Tunnel related projects. Both BBR, Lian Beng insiders has been buying from market as well.
 

not all company got buy-back mandate even local listed companies.
if u ask me, I think Blue chips are very attractive to buy now.. hehee..
almost all stocks are cheap, so those who think S chip is risky and of course look elsewhere.
 
 
 
 
 
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[erelation 16-06-2011]:

Several interesting development with the S-Chips in the market now. Share prices has plunged to super cheap status, however how many of these companies have insider buying at such a low price?
For me, i will not be buying anymore S-chips or either will i do an averaging down since the insiders are not buying even at 2-4x PE. Do we miss something or the insiders know something which we don't?
Did a review of S-chip as well as the small and medium cap counters on SGX. I think it is LIKELY to be a safer bet to buy into construction related stocks like Yongnam, Lian Beng, BBR which have massive book order till as far as 2014. 
These counters are already trading below 4 - 6x PE. Might be more expensive than S-Chip but definitely we have more visibility in their business. Singapore government is pumping up the construction of HDB flats, there will also be more projects to be released for public section which includes MRT. In this aspect, Yongnam has the competition advantage in MRT/Tunnel related projects. Both BBR, Lian Beng insiders has been buying from market as well.
 

Dont think we should throw the baby out with the bathwater as present is lot better than 2007 subprime. Check out the counters with a history of share buyback/insider buying and those which dont ( as they maybe only interested to run their biz ). If there is no action from the 1st group, start to worry. However, no insider buying also does not mean that their friends are not buying on their behalf? In fact, a slow declining and fearful market is ideal for pushing down small cap stocks. The retail investors have no chance vs professionals/insiders in present market. Best is not to add new positions but instead switch from bad stocks to stocks with good growth potential/dividends. If you have to add new position, buy only with your spare cash ( so that you are not caught by forced selling )and wait for the technical rebound, which could come soon.

relaxing, U & other guys have hit the nail on the head!
I hv just noticed the latest share buyback coming from CEO of China Environment. Just announced at lunch time. 780,000 shares bought at ard 16 cents.