Subscribers to the diy-investors.com website will be aware that we picked two virtual portfolios for 2011. The first took a notional £10,000 and invested this equally into ten shares. The second was more focussed, spreading the fund equally between five shares. Although this is OK as a comparison with the annual ritual that the mainstream newspapers engage in, it doesn't reflect the reality of my approach as an active DIY-Investor.
I have therefore taken up the challenge of actively managing two (mirror) virtual portfolios, using the same sharepicks as my starting point. However, I am applying the portfolio management techniques (as set out in chapter 14 of my book "Picking Winning Shares", coupled with the selling techniques as set out in chapter 15).
So far, the only change that I have made was to have sold MBL group (incurring a loss to the portfolio of £418), following the deterioration of the price action after the profit warning on 31st January 2011. The proceeds were invested in Pendragon (2431 shares purchased at 23.25p). This has, so far, proved to be the correct move as MBL Group has now dropped to 12p (having had the contract for the supply to Morrisons terminated, as announced on 15th March 2011).
I'm currently monitoring the virtual shareholdings in the two actively managed portfolios and at diy-investors.com, we'll be comparing the passive and actively managed virtual funds quarterly as we go through the year. We'll circulate the first quarter results to our subscribers over the weekend of 2nd/3rd April.
I believe that I can outperform the passive virtual funds - but by how much over the full 12 months? Anyone like to offer an opinion as to how many percentage basis points this might be?
Sunday, 27 March 2011
Friday, 25 March 2011
Is HaiKe Chemical Group (SP=32p) about to take off?
Is Haike Chemical Group (AIM: HAIK), about to start another short term uptrend?
Over the past 4 years, HAIK has been in a downtrend, characterised by very volatile short term moves (see graph below).
Is there any reason to expect the shareprice to turnaround? Well I believe the answer may well be yes. The recent positive news about both turnover and profitability, coupled with the commencement of production at the jointly owned Ruilin Refinery, could well be the reason. The increase in gasoline and diesel prices,by the PRC Government in December, may also have a positive effect going foreward.
Analysing the recent news, it appears that the full year Turnover, for the year ended 31/12/2010, will be around £780m. On the current shareprice of 32p and with 38.4m shares issued, the MCAP is currently around £12.3million. This gives a PSR of only 0.016. This appears to be extremely low for a Company with such a large turnover and located in such a growing market. Note also that, for the years ending 2005 to 2007, HAIK managed an operating profit of between 5 and 7%. Any slight improvement in profitability, coupled with the rapidly increasing turnover, will be likely to lead to a massive increase in profit and hence eps (based on the current 38.4m shares issued). A re-rating is therefore quite likely!
What about the recent chart action? Well, here too there are grounds for some optimism (see below):
As you can see, since the last RNS (20th January 2011), the shareprice has dropped from 73p to 32p (a fall of 56%). However, note that the 200 day moving average is sloping up and providing support to the price. Also, there appears to be buy signals on both MACD and stochastic secondary indicators. RSI is also oversold but the OBV is very strong. The recent decline has also taken the price back to about the level where it broke (laterally) out of the 4 year downtrend, at the end of November 2010. In my opinion, this could be the last buying opportunity at this level, as the full year results (expected at the end of June 2011) are likely to show huge growth in turnover, and a "modest profit" (as per the RNS of 20th January).
What do you think?
Over the past 4 years, HAIK has been in a downtrend, characterised by very volatile short term moves (see graph below).
Is there any reason to expect the shareprice to turnaround? Well I believe the answer may well be yes. The recent positive news about both turnover and profitability, coupled with the commencement of production at the jointly owned Ruilin Refinery, could well be the reason. The increase in gasoline and diesel prices,by the PRC Government in December, may also have a positive effect going foreward.
Analysing the recent news, it appears that the full year Turnover, for the year ended 31/12/2010, will be around £780m. On the current shareprice of 32p and with 38.4m shares issued, the MCAP is currently around £12.3million. This gives a PSR of only 0.016. This appears to be extremely low for a Company with such a large turnover and located in such a growing market. Note also that, for the years ending 2005 to 2007, HAIK managed an operating profit of between 5 and 7%. Any slight improvement in profitability, coupled with the rapidly increasing turnover, will be likely to lead to a massive increase in profit and hence eps (based on the current 38.4m shares issued). A re-rating is therefore quite likely!
What about the recent chart action? Well, here too there are grounds for some optimism (see below):
As you can see, since the last RNS (20th January 2011), the shareprice has dropped from 73p to 32p (a fall of 56%). However, note that the 200 day moving average is sloping up and providing support to the price. Also, there appears to be buy signals on both MACD and stochastic secondary indicators. RSI is also oversold but the OBV is very strong. The recent decline has also taken the price back to about the level where it broke (laterally) out of the 4 year downtrend, at the end of November 2010. In my opinion, this could be the last buying opportunity at this level, as the full year results (expected at the end of June 2011) are likely to show huge growth in turnover, and a "modest profit" (as per the RNS of 20th January).
What do you think?
Usual warnings DYOR etc.
Monday, 14 March 2011
"Picking Winning Shares"
Well, at last my book is published - you can now buy it on Amazon HERE!
The back cover image is here ...
I hope you enjoy reading it and that it helps with your investing.
Kind Regards, Mick.
The back cover image is here ...
I hope you enjoy reading it and that it helps with your investing.
Kind Regards, Mick.
Wednesday, 9 March 2011
A real good price move!
Real Good Food Group closed at 37.5p today (up 8.3%), breaking through the overhead resistance (see chart below).
The preliminary results are due on 29th March and based on the last RNS, we can expect a pleasant surprise. If the forecast turnover of £220m is met and given todays MCAP of £24.4m, RGD is still on a paltry PSR of 0.11. Expect a re-rating if the results are good.
Looking at the longer term chart, the next serious price resistance is expected at the 80 to 81p price level.
Will this one double again in the next year? What do you think?
You may also have noticed that RGD is available as a free case study HERE.
As ever, do the DIY-Investors thing and "make up your own mind!"
The preliminary results are due on 29th March and based on the last RNS, we can expect a pleasant surprise. If the forecast turnover of £220m is met and given todays MCAP of £24.4m, RGD is still on a paltry PSR of 0.11. Expect a re-rating if the results are good.
Looking at the longer term chart, the next serious price resistance is expected at the 80 to 81p price level.
Will this one double again in the next year? What do you think?
You may also have noticed that RGD is available as a free case study HERE.
As ever, do the DIY-Investors thing and "make up your own mind!"
Wednesday, 16 February 2011
Is Uniq unique?
Uniq (SP=13.25p) underwent an explosive breakout today, closing up 5.75p (+74.92%). Of the 115million total shares available, 9.96m changed hands (8.7%), making this a significant move.
Was any of this foreseeable? Well we thought so, hence UNIQ was one of our picks for 2011. Another one of our picks for the year went up 21.18% today on a very impressive set of annual results. Want to get details? Join our community of DIY-Investors Here.
Was any of this foreseeable? Well we thought so, hence UNIQ was one of our picks for 2011. Another one of our picks for the year went up 21.18% today on a very impressive set of annual results. Want to get details? Join our community of DIY-Investors Here.
Monday, 7 February 2011
Pendragon (20.5p) - Start of a new upward move?
Fully listed Pendragon (PDG), closed today at 20.5p, up 2.5p or 13.89%. With the preliminary full year results due on 28th February 2011, is this the start of a new upward move?
On a fundamental basis, PDG is currently on an exceptionally low PSR of 0.04 (compared to the sector average of 0.87). Similarly, its PER is currently only 5.31 (sector average is 13.7). Analysts are expecting the eps for y/e 31.12.2010 to have grown 203% to 2.53p, with another 34% growth in earnings expected for 2011 (to 3.39p).
What of the technicals? Well have a look at the grapth for the past 9 months (below):
From this, you can see that the closing price (20.5p) has nudged through the resistance line, extended from the two previous highs (Aug 2009 & April 2010). Similarly, it has broken through the shorter term resistance line (September 2010 to present).
Of particular note is the strengthening OBV, giving a positive divergence with the falling shareprice. Also, we have buy signal on the Stochastic Indicator. Similarly, the RSI and OBV have kicked up nicely today.
All of this bodes well for the future, as it mirrors the breakout that took place early in January 2009 (see graph below).
What you think about the prospects for Pendragon?
On a fundamental basis, PDG is currently on an exceptionally low PSR of 0.04 (compared to the sector average of 0.87). Similarly, its PER is currently only 5.31 (sector average is 13.7). Analysts are expecting the eps for y/e 31.12.2010 to have grown 203% to 2.53p, with another 34% growth in earnings expected for 2011 (to 3.39p).
What of the technicals? Well have a look at the grapth for the past 9 months (below):
From this, you can see that the closing price (20.5p) has nudged through the resistance line, extended from the two previous highs (Aug 2009 & April 2010). Similarly, it has broken through the shorter term resistance line (September 2010 to present).
Of particular note is the strengthening OBV, giving a positive divergence with the falling shareprice. Also, we have buy signal on the Stochastic Indicator. Similarly, the RSI and OBV have kicked up nicely today.
All of this bodes well for the future, as it mirrors the breakout that took place early in January 2009 (see graph below).
What you think about the prospects for Pendragon?
Friday, 4 February 2011
DCD Media (SP=9.625p) - Buying Opportunity?
DCD Media (AIM: DCD) ticked up 0.75p (6.9%) today. The share price graph (below) shows a clear reversal signal ...
Note also that the on-balance-volume (OBV) is very strong. Couple this with oversold indictions from RSI and MACD and we seem to have a good opportunity to buy into a small company with improving prospects.
The longer term graph (below) shows the price history.
The decline from 2007 to 2010 indicates a classic depressed stock. However, after a period of "bottoming out", there now seems to be some indications of a resurrection in the share price. Our interest started when Taya Communications increased their holding to 12.145 million shares (19.87%) - clearly they had spotted some value here! DCD Media has nine operating companies producing and selling television programmes and licensing various rights to third parties. The accounts for the year ended 30th June 2010 showed an improving balance sheet, with £4.9m in cash - not bad for a company with a current capitalisation of £5.9million!
With a low PSR (0.17) and improving prospects, we believe that this is well worth adding to our DIY-Investors portfolio.
What do you think?
Note also that the on-balance-volume (OBV) is very strong. Couple this with oversold indictions from RSI and MACD and we seem to have a good opportunity to buy into a small company with improving prospects.
The longer term graph (below) shows the price history.
The decline from 2007 to 2010 indicates a classic depressed stock. However, after a period of "bottoming out", there now seems to be some indications of a resurrection in the share price. Our interest started when Taya Communications increased their holding to 12.145 million shares (19.87%) - clearly they had spotted some value here! DCD Media has nine operating companies producing and selling television programmes and licensing various rights to third parties. The accounts for the year ended 30th June 2010 showed an improving balance sheet, with £4.9m in cash - not bad for a company with a current capitalisation of £5.9million!
With a low PSR (0.17) and improving prospects, we believe that this is well worth adding to our DIY-Investors portfolio.
What do you think?
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