Our On Our Radar
(“OR”) tracker has recorded a 6.9% total return since it started on 7 August,
outperforming the benchmark FBMKLCI return of 4.7% during the same period. To
recap, our OR report is aimed at expanding our research audience reach further
and to encourage and increase more retail participations in the local equity
market. The reports are mainly focused on the: (i) mid-to-small market capitalisation companies; (ii) undervalued
stocks with potential rerating catalysts; (iii) stocks that may have arbitrage opportunities
and (iv) news-driven and/or trading-oriented stocks. We believe an effective
stock selection and an active trading oriented approach will be a more appropriate
strategy for retail investors in 2013 given that FBMKLCI is likely to trade in
a range-bound mode for the year. Moving forward, in order to provide a more
timely and effective strategy to retail investors, we will introduce three OR
model portfolios next week based on different investment approaches and risk
tolerance.
A decent return so
far. We have issued a total of 26 OR reports since 7 August, out of which
three were non-rated reports. Out of these, we subsequently issued five
sell/take profit reports to close our earlier open positions at a hefty average
percentage gain of 12.5%. Note that there are still 14 companies in our OR
portfolio tracker list with Trading Buy recommendations currently, albeit some of
the stocks already reached our target prices (based on 31 December closing
price). Meanwhile, our overall OR portfolio tracker indicates that our
recommendations (in terms of total return) have performed well and have
outperformed the FTSE Bursa Kuala Lumpur Composite Index (“FBMKLCI”) by 230
basis points (“bps”) on average in the past five months.
The biggest winners
and losers. The top three best performers (in terms of total return) in our
OR portfolio as of 31 December 2012, for which we still have Trading Buy
ratings on, are Power Root (“PWROOT”, +40.0%), Faber Group (“FABER”, +27.9%)
and SMR Technologies (“SMRT”, +20.5%). Meanwhile, Guan Chong (“GCB”, -18.8%);
MKLAND (-15.4%); and Cocoland (“COLA”, -12.1%) were the top three worst
performers in our OR tracker.
Thus far, Tradewinds Corporation (“TWSCORP”) was the
top performer on our realised portfolio tracker list. The stock recorded a
handsome capital gain of 36.5% within a short one and a half month period due
to our timely view on the company, which announced a privatisation plan later
as we had predicted. Meanwhile, we had also advised investors to take profit on
Scientex Bhd (“SCIENTEX) after it recorded a 19.3% return and hit our target
price within two weeks. TOMEI Consolidated Bhd (“TOMEI”) was the worst performer
on the list as the stock went into against our prediction. We subsequently
recommended a trading sell rating on the stock on 18 December.
2013 investment
strategies for retail investors. Our overall stock market view for the year
2013 remains unchanged, where we believe the market will likely trade in a
range-bound mode for most of the time. Thus, an effective stock selection and
coupled with active trading oriented approach are more appropriate strategies
to be adopted by retail investors, in our view. Moving forward, in view of our
OR reports being focused on mid-to-small market capitalisation stocks, which
generally have a higher volatility as compared to the big capitalisation
stocks, we will introduce three new OR model portfolios next week that would be
based on three different types of investment approaches and risk tolerance.
This, we believe, will provide a more timely and effective investment
portfolio/strategy to retail clients.
Stay tuned.
Source: OSK
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