Invest!

Our Investment

2009-03-24T18:32:00.000-07:00

We are given $10,000 to invest. Here's how we did it:

COSCO CORP

No of Shares Bought: 2000
Entry Price: 0.690

No of Shares Sold: 2000
Exit Price: 0.705

Profit/Loss: -$24.9181

EPS: N/A
Market Cap: SGD 1,589.86m

Hyflux

No of Shares Bought: 1000
Entry Price: 1.410

No of Shares Sold: 1000
Exit Price: 1.440

Profit/Loss: -$24.9485

EPS: N/A
Market Cap: SGD 740.66m

DBS Group Holdings

No of Shares Bought: 1000
Entry Price: 6.900

No of Shares Sold: 1000
Exit Price: 7.250

Profit/Loss: $289.3081

EPS: 0.2893081
Market Cap: SGD 10,877m

* * *

Total Profit: $239.4415 :D

Strategy Analysis

2009-03-23T17:45:00.000-07:00

Our team strategises our trades and investments by first looking at the technical and fundamental analyses of our targeted companies, namely DBS Group Holdings, Hyflux and Cosco Corp. This is to ensure that our shortlisted companies are worth investing in. We study indicators in their historical charts, using the RSI, Moving Average, and the stochastic charts, amongst others.

We also do extensive research on the company (and CEO) background in fundamental analysis. We feel that it is important for us to invest in the right company with a good leader, instead of just buying the stock because it is rising at the moment.

Also, we vary our stocks, buying both growth stocks (DBS and Hyflux) and value stocks (CoscoCorp), during the current financial crisis. In the case of DBS and Hyflux, both companies provide high-quality products or render excellent service that yield significant profit margins and the return of equity is 17% to 50%. Both companies have good track record for the past two years. We also believe that time is a compounding factor of time; therefore we plan to invest in these two companies for a prolonged period of time. To add on, in 2006, Hyflux was awarded Water Company of the Year at the Global Water Awards, by the Global Water Intelligence, United Kingdom. Hyflux was twice listed as Forbes Asia’s Best Under a Billion Company twice in 2005 and 2006. Hyflux is also poised to extend its reach to the growing markets in India, China, the Middle East & North America and the Asia Pacific. Also,DBS bank is the largest bank in South East Asia by assets and among the larger banks in Asia. It has market-dominant positions in consumer banking, treasury and markets, asset management, securities brokerage, equity and debt fund-raising in Singapore and Hong Kong. As such, we decided to park our money into these companies as a positive outlook is ensured.

Cosco Corp,on the other hand, was bought as a value stock. When prices climb gradually, we sell the stock and get our profits. We view Cosco Corp as a short-term trade, shorting and selling the stock from time to time.

Moreover, we also experienced the benefits of utilizing momentum investing, investing when opportunities arise. One example would be DBS Holdings. When we realized the RSI was below 30 and both the Moving Average and Stochastic charts were favourable in that situation, we concluded that that was the time to invest in DBS Holdings. And we were right, DBS was at an all-time low and we parked a portion of our money in the company. To date, the price of the stock is still upping itself, slowly but interminably.

Reflections

2009-03-22T09:02:00.000-07:00

Firstly, Investor Education introduces the world of stocks to us students and broadens our perspectives on the various economy bodies across the globe, both of which are realms usually neglected or simply too high-leveled for us. This, subsequently, comes as a very rare opportunity and as a concluding evaluation for the past five days; we are glad to say that we’ve enjoyed this course tremendously and have gained much from it.

Our learning journey, which includes virtual trading on tradershub.net and similar portals, consists of various ups and downs. In fact, such obstacles and hiccups taught us more. For instance, the very first time we actually sat down as a group and looked at tradershub.net for potential stocks, we were rather naïve and rash. We zoomed in to analyse the stocks on the top 20 list superficially, one of them is Celestial. Due to a seemingly restricted budget and as a test, we went in on Celestial. Being rather ignorant, we thought since Celestial is listed as one of the top 20 trades, profits would roll in easily. We did the fundamental analysis and technical analysis in a superficial manner, not really carrying out extensive research. Being rash, we decided to buy when the RSI of Celestial neared 30. That was a major mistake. We looked at only one indicator, which was definitely inconclusive before doing a trade. Following that, the price of Celestial went down quite sharply and we suffered losses as a result.

On hindsight, it really is such pitfalls where we really learn to carry ourselves up and learn from our mistakes. We currently have DBS Holdings as one of our shares and are monitoring the market closely. We chose to invest in them as DBS is currently a blue chip share in Singapore, which also means it is less volatile and prices do not fluctuate as much. We have also dutifully done our technical analysis and made use of indicators like Moving Average, RSI, Stochastic charts to ensure that we are parking our money in the right market. Although it still is a virtual trading hub, we take pride in our account and feel that sense of achievement when profits come in.

However, there are time when we make losses even when we've done our analysis, and that is where our reflection comes in. This time around, the time span given for the project was 2 days, but what we did was to invest in a blue chip company. Meaning to say within these two days, the market might not have risen in value and even might have dropped in value, thus causing us to make some losses. Given a longer time of up to 5 years, if we continue to park our money in DBS, we would have made a bigger profit.

Lastly, our group made the mistake of buying only 1 lot in each share. Even though the value of the stock has gone up to Day High when we sold, we still made a lost because of the administrative fees. The rise of the stock is not significant enough to cover that cost, so next time, we ought to buy more lots in one share instead of less lots in more shares.

Another important aspect of this sabbatical we feel is very admirable is the fact that it is constantly emphasized that money is a means, not an end, that we should not be greedy or covet for more. We feel very strongly towards this as many people have had their fingers burnt in the stock market. Others have neglected family and friends in the process of maximizing profit. Thankfully, we're exposed to these backfires in this course, and we will not make the same mistake.

We feel happy that we've been given this opportunity both to find out more about the investors' world and also about ourselves.

Case Study: Hyflux

2009-03-21T20:41:00.000-07:00

Group CEO, Presidend and Managing Director: Olivia Lum
Group Deputy CEO and CFO: Sam Ong

Share Price: SGD 1.410
DPS: SGD 0.019
P/E Ratio: 23.734
ROE: 13.742%

Today, Hyflux has grown beyond just a water treatment company. It is recognised as Asia’s leading environmental company with operations and projects namely in Singapore, China, the Middle East & North Africa and India.

Specialising in membrane technologies, Hyflux is an integrated solutions provider offering services that include design development, pilot testing, systems integration, and engineering, procurement and construction. It is also engaged in the commissioning, operation and maintenance of a wide range of water and liquid treatment systems on a turnkey or Design-Build-Own-Operate (DBOO) arrangement.

Backed by its membrane and materials research centre in Singapore, the largest in Asia outside of Japan, Hyflux ensures that development of cutting-edge membrane technologies is the key driver to spearhead sustainable company growth.

Through in-house research or in collaboration with reputable institutions worldwide, Hyflux leverages on its technologies to develop a comprehensive range of membrane products (polymeric, stainless steel and ceramic) and membrane systems, to provide an environmentally-friendly solution to a wide range of applications in water treatment and industrial manufacturing processing.

With the use of its proprietary membranes, Hyflux has also moved into the field of clean energy in environmental applications such as the recycling of spent oils and solvents, as well as in the production of bio-based materials such as lactic acid and biodegradable plastics.

Hyflux’s outstanding performance has been widely recognised. In 2006, Hyflux was awarded Water Company of the Year at the Global Water Awards, by the Global Water Intelligence, United Kingdom. Hyflux was twice listed as Forbes Asia’s Best Under a Billion Company in 2005 and 2006.

Moving ahead, Hyflux key growth lies in the development of cutting-edge technologies and strong operational and financial capabilities. Focusing on these strategies and continuous emphasis on research and technology development and acquisition, Hyflux is poised to extend its reach to the growing markets in China, India, the Middle East & North Africa and Asia Pacific.

- Hyflux

* * *

Market Analysis

SWOT Analysis

(S)trength
Technology and Research&Development is a large component of Hyflux's business model. Instead of just producing water alone, Hyflux goes on to develope new technology applications and intellectual property to sustain its long-term competitive advantage. It maintains its leadership position in its core business by engaging in a sustained, market-driven programme of research and development.

In 2004, Hyflux launched its membrane and materials technology centre - the largest in Asia, outside Japan, to spearhead its development in cutting-edge membrane technology and environmental engineering solutions. It maintains more than 10 research laboratories in Singapore, including a knowledge centre, an innovative process development centre, a materials and membrane products development centre as well as advanced machining, prototyping and industrial design functions to support the Hyflux Group’s status as a leading environmental solutions company.

Hyflux collaborates with world-renowned research institutions and companies to develop and enhance its research programmes, expand areas of membrane applications, improve existing technologies and processes as well as commercialise novel technologies. Using these technology, Hyflux value adds to water and keeps itself competitive by providing Singapore one of the 4 "taps"- NeWater.

(W)eaknesses
Many have commented that they do not like the taste of new water, and therefore this might be a reason why some people might not support Hyflux. However, with its innovative technlogy, we belief that it is a matter of time before Hyflux eradicate this problem for good.

(O)pportunities
Water is essential for life- the demand for water supply will not cease to exist. However, only 3% of natural water is suitable for drinking, and this 3% is quickly decreasing with the likes of the increasing population and pollution. Sooner or later, the world will turn to water desalination for potable water, and Hyflux will possess the spear-headed technology and innovation to do just that. Demand for Hyflux' manufacturing products and products will be very high.

Green Technology is also the next big market to venture into and Hyflux is doing just that. Right now, as the world is trying to tackle global warming, Hyflux's products will come into play in every relavant field- it provides safe, drinking water in a environmentally friendly way, at the same time offering a competitive market price so more parts of the world can afford it.

(T)hreat
Consumer
The premium price of the consumer product may limit access to the mass market. For example, the air to water aquovators is currently sold at a price of $1,788 which may be too expensive for an average income family. Thus Hylfux must lower its consumer product prices if it wants to tap into this key lucrative market.

Instability of a young company
A change in the strategy and focus in large competitors may affect the market position of Hyflux. As a young company, Hyflux is still not able to compete with large competitors like US Filter (ASIA), Ionics Asia Pacific and Kurita. This is due to firstly lack of mass production capabilities. Also due to its youth the company may not have sufficient capital reserves to protect it from the risk of failed ventures. Lastly, though it has a reputation locally as a leader for high technology and quality products, yet internationally the company is still new and it may still take time to establish a core reputation worldwide.

* * *

Reasons for buying:

indicator 1: Relative strength Index

30.45
it is considered low when it is at 30. thus, the RSI of hyflux is low.

RSI of lower than 30 is an indication that it is oversold. thus, it is one indication that it is time to buy it. When a share is overbought, it is likely to fall soon. Likewise, if a share is oversold, it is likely to pick up. The price is also at a low and has been decreasing for quite a period of time.

Indicator 2: trend lines of long term and short term moving average

The indication for buying would be when the short term moving average is cutting the long term moving average or above the long term moving average. This most likely suggests an upward trend.
The reverse is true for selling.

Currently, the short term moving average is moving downwards and not cutting the long term moving average. From this there is no clear indication of whether to buy this stock or not.

Divergence:
There is currently no signs of bullish and bearish divergence.

Entrance and exit points:
The entrance points should be somewhere near now as the RSI is hovering around 30. The trend for the RSI is that it is increasing. We should wait until the RSI is hovering around 70 and when the and price, volume is high before we sell. However, it is a good time to buy now as Hyflux has new projects which will push the value of its stocks up. Thus, this investment should be long term and wait for the price to rise after the completion of the projects before selling off at the right time.

Accounting for change in the trend:
The price of the shares are dropping as the price before in January are high and people are selling off the shares at low prices. Thus, there is a dip in the share prices.

Fundamental analysis:
Sector:

Hyflux is in the water purifying sector. This sector is an integral part of the green technology sector. The green technology sector is predicted to be increasing. With the price at only $1.41 per share, it is quite advisable to go into the market. However, you should hold back some of your money and not invest everything in.

Future plans:
Hyflux stocks are also rather promising as Hyflux has new and confirmed contracts:
SingSpring Seawater Desalination Plant, Singapore

Seawater Desalination Plant, Tiajin City, China

Seawater Desalination Plant, Magtaa, Algeria

Seawater Desalination Plant, Tlemcen, Algeria.

From this, we can see that Hyflux shares have a very high potential of soaring very high in the market when the projects start.

Market Capitalisation:
Market Capitaliation is a measure of the size of the company. Larger capitalisation shares have lower volatility.

Hyflux has a market capitalisation of S$735.4 million . This indicates that it is a small cap. Small caps have a high volatility.

Earnings per Share:
The earnings per share is at 23.73. This is relatively high and this is a possible indicator that the share prices are likely to increase.

Dividend per share:
The DPS is constantly increasing from the year 2003. It increase from $0.007 in 2003 to $0.019 in 2008. This shows a steady increase of DPS in 5 years. Thus, the projected DPS is expected to rise. A high DPS implies that the company is doing well and is distributing the dividends to the shareholders. However, this may not be accurate as the companies might be using the profits to invest in the expansion of the company instead of giving it to the shareholders.

Conclusion:

We should enter the Hyflux market with not all our saving buts only partially. The share price is at $1.41. The share price can rise up to $3.70 in the future but this needs time. Thus, this stock is a long term investment. Not all the indicators are pointing to the buy sign but most of them are. Hyflux has a good track record for doing well in the past years. The price currently is also not the peak and can be considered the low in the months. This is a situation of buying a high valued stock at a low price. We should also keep the stock till after the completion of its projects which will further boost the share prices. This share requires a moderate appetite for risk for potentially higher returns in the future.

Case Study: DBS

2009-03-19T20:39:00.000-07:00

Chairman: Koh Boon Hwee

Share Price: SGD 6.90
DPS: SGD 0.800
P/E Ratio: 5.227
ROE: 11.123%

DBS Bank Limited SGX: D05 (simplified Chinese: 星展银行有限公司; pinyin: Xīngzhǎn Yínháng Yǒuxìan Gōngsī) is a bank incorporated in Singapore. It was previously known as The Development Bank of Singapore Limited (新加坡发展银行), before the present name was adopted in July 2003 to reflect its changing role as a regional bank.

The bank was set up in 1968 as a development-financing institution led by the Singapore government. Today, its branches numbering more than 100 can be found island-wide. DBS Bank is the largest bank in South East Asia by assets and among the larger banks in Asia. It has market-dominant positions in consumer banking, treasury and markets, asset management, securities brokerage, equity and debt fund-raising in Singapore and Hong Kong.

- Wikipedia

reasons for buying:

indicator 1:

Relative strength Index

33.72
it is considered low when it is at 30. thus, the RSI of hyflux is low.

RSI of lower than 30 is an indication that it is oversold. thus, it is one indication that it is time to buy it. When a share is overbought, it is likely to fall soon. Likewise, if a share is oversold, it is likely to pick up. The price is also at a low and has been decreasing for quite a period of time.

Indicator 2:

Trend lines of long term and short term moving average

The indication for buying would be when the short term moving average is cutting the long term moving average or above the long term moving average. This most likely suggests an upward trend.
The reverse is true for selling.

Currently, the short term moving average is moving downwards and not cutting the long term moving average. From this there is no clear indication of whether to buy this stock or not. However, the long term and short term moving average are moving downwards with the long term moving average having a steeper gradient as compared to the short term moving average. This is a sign that the two moving averages are likely going to meet in the near future.

Divergence:
There is currently no signs of bullish and bearish divergence.

Entrance and exit points:
The entrance points should be somewhere near now as the RSI is hovering around 30. The trend for the RSI is that it is increasing. We should wait until the RSI is hovering around 70 and when the and price, volume is high before we sell. However, it is a good time to buy now as DBS can be considered a value stock going at low prices. Thus, this investment should be long term and wait for the price to rise till around the range of $20(May 2008) after the economic downturn.

Accounting for change in the trend:
The price of the shares are dropping as the price before in January are high and people are selling off the shares at low prices. Thus, there is a dip in the share prices.

Fundamental analysis:

Sector:
DBS Bank is the largest bank in South East Asia by assets and among the larger banks in Asia. It has market-dominant positions in consumer banking, treasury and markets, asset management, securities brokerage, equity and debt fund-raising in many parts of Asia including Singapore and Hong Kong. DBS has a good track record in Asia and shareholders are reliable companies like Temasek Holdings and HSBC(Singapore). With the price at only $7.00 per share, it is quite advisable to go into the market as the shares have a potential to go back to the May 2008 prices of $20 or more. However, you should hold back some of your money and not invest everything in DBS yet until more indicators are supportive of the buy.

Market Capitalisation:
Market Capitaliation is a measure of the size of the company. Larger capitalisation shares have lower volatility.

DBS has a market capitalisation of S$10.9 billion . This indicates that it is a big cap. Large caps have a low volatility and is very stable.

Earnings per Share:
The earnings per share is at 5.227. This is relatively low and this shows that the shares of DBS are undervalued. This implies that the DBS shares can perform better and that now is the right time to enter the market since the company is undervalued and there is over selling occuring.

Dividend per share:
The DPS of DBS is constantly increasing from the year 2003. It increase from $0.300 in 2003 to $0.800 in 2008. This shows a steady increase of DPS in 5 years. Thus, the projected DPS is expected to rise. A high DPS implies that the company is doing well and is distributing the dividends to the shareholders. However, this may not be accurate as the companies might be using the profits to invest in the expansion of the company instead of giving it to the shareholders.

Conclusion:

We should enter the DBS market with not all our saving buts only partially. The share price is at $7.00. The share price can rise up to $20.00(almost 200% return) in the future but this needs time. Thus, this stock is a long term investment. Not all the indicators are pointing to the buy sign but most of them are. DBS has a good track record for doing well in the past years in Asia and is one of the safest and most stable bank in the region. The price currently is also not the peak and can be considered the low in the years. This is a situation of buying a high valued stock at a low price. We should also keep the stock till after the recovery of the market. This share requires a moderate appetite for risk for potentially higher returns in the future.

Case Study: Cosco Corp

2009-03-17T20:39:00.000-07:00

Share Price: SGD 0.690
DPS: SGD 0.070
P/E Ratio: 4.771
ROE: 35.809

Chairman: Li Jian Hong

COSCO Corporation (Singapore) Limited ("COSCO" or the Company) has the largest Ship Repair, Ship Building & Marine Engineering operation in China. A diversified group with activities also in the Dry Bulk Shipping, Shipping Agency and other sectors, it is the SGX Mainboard-listed subsidiary of China Ocean Shipping (Group) Company ("COSCO Group"), China’s largest shipping group and one of the top shipping conglomerates in the world.

COSCO has achieved significant progress in growing its Ship Repair, Ship Building & Marine Engineering capacities and capabilities. The completion of its acquisition of a 51% stake in the largest shipyard in China, COSCO Shipyard Group ("COSCO Shipyard"), on 1 January 2005 had propelled COSCO into the premier league in the ship repair industry. COSCO is poised to continue in its dynamic growth momentum for further breakthrough in its core businesses and global coverage. The Company is a component stock of the Straits Times Index (since 1 March 2004), constituent of the London benchmark FTSE All-World Asia Pacific (Ex-Japan) Index (since 19 March 2004) and MSCI Singapore (since 1 June 2005). In October 2006, the Company has been included as a component stock of Prime Partners China Index – the first index that tracks the performance of China enterprises listed on the Singapore Stock Exchange.

- Cosco Corp's Website

* * *

Cosco Corporation is a leading Chinese marine engineering group focusing on three core business divisions of ship repair & conversion, dry bulk shipping and shipping agency. China Ocean Shipping Company, the largest shipping conglomerate in China, owns a majority 54% stake in Cosco Corporation. Cosco has seven key shipyard assets located in China, making the group the largest shipyard operator in China.

Cosco conducts the bulk of its ship repairs and conversion jobs through five major shipyards located in key strategic locations (Dalian, Nantong, Zhoushan, Guangzhou and Shanghai) along the coast of China. Approximately 80% of vessels repaired are international vessels. Cosco is currently undergoing a massive expansion program to increase its shipyard capacity to 1.7mn dwt by the end of 2007 from 1.2mn dwt. Approximately 80% of repair revenue is derived from vessels registered under foreign flags.

Trade volumes have expanded in tandem with economic growth; with the exception of 2001-02, volume growth and output growth has been markedly higher than in the 1990s. China remains the world’s strongest economic growth driver. Despite being an often repeated cliché, it is a fact that cannot be ignored. The emergence of China as a global trading power has done much to fuel economic growth. The insatiable demand for raw materials and finished goods has led China to become a significant trading partner of the US, the world’s largest economy. Currently, Chinese goods already account for approximately one sixth of US retail sales and approximately half of the growth. India is also coming on strong as a developing economy, albeit at a slightly lower pace of growth and with less impact on a global scale, India is nevertheless expected to become a more significant part of the world economy over the next decade. Aside from China and India, Merrill Lynch forecasts that most economies within the Asia Pacific will continue to report strong growth over the next two years. China and India lead the pack, followed by Singapore, Hong Kong and Indonesia.

Barring a blip during the early 1980s, seaborne trade has closely tracked the growth in world output. While the level of increase is not as sharp as actual output, seaborne volumes have, without question, increased progressively through the years. At major ports in US, Europe and Asia, volumes have in recent years, risen by high single digits. Consequently, the global merchant fleet has witnessed steadily increasing growth since 2001. Seaborne trade volumes have been on a persistent ascent since the early 1990s, and we fully expect the trend to persist in line with the continued expansion of the global economies.

Positive energy transportation trends
The demand for energy is estimated to grow significantly over the next few decades. According to the International Energy Agency, worldwide energy consumption is expected to increase 50% by 2050, requiring US$17tn of investment; of this, 12% or S$2tn would be invested in shipping and port related assets and facilities.

As a Singapore listed company based in China, Cosco’s growth prospects matches up well with regional markets. Cosco’s expected growth rate is significantly higher than Merrill Lynch expectations for both Singapore and China companies across the respective markets and has been accorded a higher earnings multiple that is reflective of that growth. Cosco also compares favorably with other regional shipyard related comparables. However, we note that Korean shipyards are very established shipbuilders and engaged in a multitude of shipyard activities, whereas Cosco is primarily a pure ship repair and conversion yard, with an eye on the offshore market

* * *

Reasons for buying:

Indicator 1: Relative strength Index

35.60
it is considered low when it is at 30. thus, the RSI of Cosco Corp is low.

RSI of lower than 30 is an indication that it is oversold. thus, it is one indication that it is time to buy it. When a share is overbought, it is likely to fall soon. Likewise, if a share is oversold, it is likely to pick up. The price is also at a low and has been decreasing for quite a period of time.

Indicator 2: trend lines of long term and short term moving average

The indication for buying would be when the short term moving average is cutting the long term moving average or above the long term moving average. This most likely suggests an upward trend.
The reverse is true for selling.

Currently, the short term moving average is moving downwards and not cutting the long term moving average. From this there is no clear indication of whether to buy this stock or not. However, the long term and short term moving average are moving downwards with the long term moving average having a steeper gradient as compared to the short term moving average. This is a sign that the two moving averages are likely going to meet in the near future.

Divergence:
A Bullish Divergence is when the stock prices makes new lows but the RSI fails to make new lows. A Bearish Divergence is when the stock prices make new highs but the RSI fails to make new highs. There is currently no signs of bullish and bearish divergence as the RSI and the stocks are moving in the same divergence.

Entrance and exit points:
The entrance points should be somewhere near now as the RSI is hovering around 30. The trend for the RSI is that it is increasing. We should wait until the RSI is hovering around 70 and when the and price, volume is high before we sell. However, it is a good time to buy now as Cosco Corp stocks has new projects which will push the value of its stocks up. Thus, this investment should be long term and wait for the price to rise till around the range of $8.17(Oct 2007) after the economic downturn.

Accounting for change in the trend:
The price of the shares are dropping as the price before in January were increasing slightly and people are selling off the shares at low prices to take in profit. Thus, there is a dip in the share prices.

There is also a reported in February this year that COSCO Corp’s annual profits dropped 10% after it took a USD 61 million provision following requests for shipbuilding payment delays by several shipowners.

Fundamental analysis:

Sector:
COSCO Corporation (Singapore) Limited ("COSCO" or the Company) has the largest Ship Repair, Ship Building & Marine Engineering operation in China. A diversified group with activities also in the Dry Bulk Shipping, Shipping Agency and other sectors, it is the SGX Mainboard-listed subsidiary of China Ocean Shipping (Group) Company ("COSCO Group"), China’s largest shipping group and one of the top shipping conglomerates in the world.

COSCO has achieved significant progress in growing its Ship Repair, Ship Building & Marine Engineering capacities and capabilities. The completion of its acquisition of a 51% stake in the largest shipyard in China, COSCO Shipyard Group ("COSCO Shipyard"), on 1 January 2005 had propelled COSCO into the premier league in the ship repair industry. COSCO is poised to continue in its dynamic growth momentum for further breakthrough in its core businesses and global coverage. The Company is a component stock of the Straits Times Index (since 1 March 2004), constituent of the London benchmark FTSE All-World Asia Pacific (Ex-Japan) Index (since 19 March 2004) and MSCI Singapore (since 1 June 2005). In October 2006, the Company has been included as a component stock of Prime Partners China Index – the first index that tracks the performance of China enterprises listed on the Singapore Stock Exchange. This shows the good track record of Cosco Corp and their achievements up til today. This gives us assurance that it will perform well and the stock prices will increase

Market Capitalisation:
Market Capitaliation is a measure of the size of the company. Larger capitalisation shares have lower volatility.

Cosco Corp has a market capitalisation of S$1.5 billion . This indicates that it is a small cap. Small caps have a higher volatility and is less stable. However, the profits are also higher since there is a higher risk.

Earnings per Share:
The earnings per share is at 4.771. This is relatively low and this shows that the shares of Cosco Corp are undervalued. This implies that the DBS shares can perform better and that now is the right time to enter the market since the company is undervalued and there is over selling occuring.

Dividend per share:
The DPS of Cosco Corp is constantly increasing from the year 2003. It increase from $0.010 in 2003 to $0.070 in 2008. This shows a steady increase of DPS in 5 years. Thus, the projected DPS of Cosco Corp is expected to rise. A high DPS implies that the company is doing well and is distributing the dividends to the shareholders. However, this may not be accurate all the time as the companies might be using the profits to invest in the expansion of the company instead of giving it to the shareholders.

Conclusion:

We should enter the DBS market with not all our saving buts only partially. The share price is at $0.690. The share price can rise up to $8.70 at the heights in October 2007 (almost 200% return) in the future but this needs time. Thus, this stock is a long term investment. Not all the indicators are pointing to the buy sign but most of them are. Cosco Corp has a good track record for doing well in the past years in Asia and is one of the largest shipping group and one of the top shipping conglomerates in the world. Cosco Corp also looks promising as it is the company that has been included as a component stock of the Prime China Index-the first index that tracks the performance of China Enterprises that is listed in the Singapore Stock Exchange.The price currently is also not the peak and can be considered the low in the years. This is a situation of buying a high valued stock at a low price. We should also keep the stock till after the recovery of the market. This share requires a moderate appetite for risk as it is facing some difficulties in this year due to dropping profits due to shipbuilding payment delays. However, ther is still a lot of potential for higher returns in the future.

Types of Investing Strategies

2009-03-16T20:26:00.000-07:00

Today, we will be covering on the different strategies of investing.

1) Value Investing
Buy low (maybe due to economic depression) and wait till share picks up to former glory. Something like looking for bargains in an Adidas Warehouse Sale then selling the merchandise you bought at a low price to others at a higher price.

2) Growth Investing
Buy stocks with high-quality products or render excellent service that yields superior profit margins and the return of equity is 17% to 50%. These companies have good track records for at least the past 2 years.

3) Momentum Investing
Invest when you see the first streak of light. Need to sell and buy fast.

4) Contrary Opinion
Adopts a different perspective compared to what most other people think. Do this only when you are really experienced.

5) Index Benchmarking
Use the movement of the index to gauge the movement of the stock

6) Follow Director's Movement
Look out for insider's news. If the director is buying his own shares, then buy it together with him.

7) Fundamentalist Approach

Refer to post on Fundamental analysis.

8) Technical Approach
Refer to entry on Technical analysis

It is good to use a mixture of the above strategies when deciding whether or not to invest in a company.

Technical Analysis

2009-03-15T20:20:00.000-07:00

2 ways of looking at the technical analysis are

- Moving Averages
- RSI

Moving Averages

The moving averages is calculated by adding the prices of a share over a selected period of time and dividing by the unit for the period. It compares trends between Moving Average of the share of 2 periods of time, say long term (i.e. 200 days) and short term (i.e. 30 days).

The Short Term Moving average is useful for traders, who want the movement of the share price in short periods of time, while conversely, those who want to invest will look at the long term MA.

RSI

Relative Strength Index.

This index shows whether the share is overbought/oversold. When a share is overbought, it is likely to fall soon. Likewise, if a share is oversold, it is likely to pick up. This is how the RSI works

- 70% and 30% = Secure areas
- More than 70% = Overbought
- Less than 30% = Oversold

Fundamental Analysis

2009-03-15T19:33:00.000-07:00

Fundamental analysis is the study of a listed company, through its market prospect, management portfolio, competition and the company's balance sheet. Another way to carry out fundamental analysis on a company is to study its Annual Reports, which will include the following informatino:

- Net Profit
- Dividend
- Franking (tax) credit
- Director's Report
- Profit and Loss Account
- Balance sheets
- Cash flow statement
- Auditor's report
- Accounting Policies report

Through these information, you can find the

1) EPS
2) P/E Ratio
3) DPS

EPS

Equity per share, calculated by dividing Net Profit with Number of Shares

There is a high correlation between EPS and a company's share price. When an EPS rises, the share price rises.

P/E Ratio

Price/Earnings Ratio, calculated by dividing Share Price with EPS.

P/E is the measurement of expectations. By using this ratio, you can find out if the company is undervalued (8-11), fairly valued (12-15) or overvalued (15<). A low P/E could also mean that a company is in extreme trouble and could be facing liquidation. DPS

Dividend per share, obtained by dividing Divident paid with Number of Ordinary Sahre.

It is the amount a company pays to shareholders, like reward returned to shareholder for their willingess to own the company's sahre. DPS is not related to the share price movement.

Investment Tools

2009-03-15T18:49:00.000-07:00

Investment tools are important because you would have to study a company before investing in them. Only go into the investment market when you are confident of winning. Buying shares is unlike buying lottery- it is not a game of luck. With enough research, you can achieve a "sure-win" situation.

Stories of people who burn their fingers at the stock market are usually those who have not done their homework.

The related entries will be 2 investment tools, namely the Fundamental Analysis and Technical Analysis.

Index

2009-03-14T18:38:00.000-07:00

Indices (plural of index) are a group of shares drawn from the broader market and used as a benchmark to measure the financial health of the entire market. There are also indices representing the different company sectors.

By studying the indices, we know the health of the entire market of the company sector/country. From there on, we can decide whether or not we want to invest in shares from the country/shares from that company sector.

Here are the indices of some major countries:

Japan - Nikkei Index
United States - Dow Jones, S&P 500
Singapore - STI
Hong Kong - Hangseng Index
Malaysia - Bursa Malaysia
Chinna - Halter USX; Shanghai Stock; CEI

Secondary Market Investing

2009-03-13T18:34:00.000-07:00

The secondary market is provided by SGX where investors and traders trade company shares based on the current market price and evaluation. Shares will be given a market value based on expectations and a company's share price will reflect its success.

It is up to the investors' own discretion to invest in the Secondary Market. They have to be well informed about the market before investing in a certain company, through the different types of analysis.

Primary Market Investing

2009-03-13T18:25:00.000-07:00

Primary Market Investing is investing via IPO or float through the underwriter (sponsoring broker) or security. It provides and opportunity for speculators to stag. Stagging means to buy a company during IPO and sell immediately.

In this method, once buys the company at a low price the moment it is put up for IPO (through the ATM) and when the shares of the market is being sold in the secondary market, the buyer sells immediately (if selling price in secondary market is higher than buying price in Primary market).

However, many people would have the same idea to participate in the float of a company up for IPO. Chances are you won't get to participate.

How The Share Market Works

2009-03-13T08:00:00.000-07:00

In a share market, companies list their companies in SGX to raise funds for expansion. Investors will partake in the companies' profit and loss by being a share holder, gaining part ownership of the company.

The next few entries will further elaborate on how the share market works.

Investing In Stocks

2009-03-12T06:41:00.000-07:00

What is investing? Simply put, it is using money to spin money. It is like putting your money into a magical pot, and waiting for it to multiply itself exponentionally. If you invest at the right time in the right business, you would have struck jackpot.

When one invests, one is willing to put his money into a certain company and wait for a period of 1 year or even more, up to 10 to 20 years. You have to have faith in these companies. To have faith in the company you are investing in, you have to know the company's running, health etc. Therefore, it is important to study the company (through the various methods we will be teaching you) over a period of time before investing.

Trading VS Investing

If you are interested in meddling with stocks for a shorter period of time, i.e. 1 minute, day or week, that's called trading. Trading is for people with big risk appetities. They have to be able to "camp" in front of the Teletext screen, watching the price of the share drop or rise every second. A split second decision could decide between wealth or bankruptcy. During trading, a lot of study is also required, hence it is not like gambling (contrary to popular beliefs).

Equities and shares are more risky than bonds, bank deposits (0.25% returns P.A., if you keep $4000 in a bank for a year, you will only get back $10) and whole life insurance (put your money in the insurance, and your money is stuck there until you are, say, 75). However, the returns are also higher. Do not invest all your savings in shares. Invest in insurance first before stocks.

We encourage the following percentages as to how much you should invest:

Age 25-35: 30% - 50% of saving
Age 35-45: 20% - 30%
Age 45-55: 10% - 20%
Above 55: 5% - 10%

Of course if you've always been the type who likes to take risk, feel free to deviate from our suggestion.

Introduction

2009-03-11T20:56:00.000-07:00

Hello all

Before we begin, please sign up for accounts/recce at the following sites

CIMB
SGX

The above 2 sites provides fundamental data regarding companies that you might be interested in investing. Play around with the features on the website to your own advantages when investing.

Traders' Hub

This site is a virtual stock market. You have $50,000 to begin with. Invest this money wisely and try to push yourselves onto the top 20 investors on the site. It is a playground for you to test out the skills you acquire along the way.

So, sign up for the accounts now!

Have fun!

First Entry

2009-03-10T20:49:00.000-07:00

Hello, we are

Jordy Kay
Wong Yang Cheng
and Goh Shao Jie

from Investors' Education :D