“On Our Radar” Tracker Review - Against the odds in a volatile January month

Despite the volatile local market in Jan 2013, which ran counter to the strong performance of the regional markets in the same period, our On Our Radar tracker has still managed to outperform the FBMKLCI on a MoM basis. On a MoM comparison, portfolio reported a -2.2% total return in Jan 2013 vs. -3.6% of the benchmark index while the average total returns of both our realised and unrealised portfolios since inception stood at 6.6% as compared to the -0.1% slide in the FBMKLCI. During the month of Jan, we had closed two major trading positions, where we recorded 31% total gain on ADVENTA and a 13% loss on MKLAND. Since then, their share prices have contracted further by 26% and 9% respectively. Going forward, the election jitters will continue to cap  the sentiment this month with a negative bias. Hence, we may look to trim our open positions further to lock in our profits. 

A soft start to 2013.  In Jan 2013, we released a total of eight On Our Radar (OR) reports, where we featured four logistic companies namely TASCO, FREIGHT, CENTURY and MAYBULK. All the stocks were on Not Rated ratings except for TASCO, which we have a Trading Buy on. Our focus on the sector was because we believed that the sector could potentially shine in the limelight as M&A plays resurfaced here.  We also wrote a Not Rated piece on TEXCYCL after we visited its plant in Puchong. As for changes in our portfolio in the month, we took profit on ADVENTA with a handsome 31% gain while closing our positions on MKLAND and IBHD with 13% and 2% losses respectively. As of now, there are still 12 stocks in our OR portfolio tracker list with Trading Buy recommendations (from 14 companies as at end-Dec 2012). The overall portfolio recorded a -2.2% MoM total return for January. This, however, outperformed the FBMKLCI by 140 bps during the same period. On a YTD basis (as of 6 February 2013), our OR tracker portfolio, which comprised of stocks where we still have a Trading Buy recommendation on, recorded a -3.9% total return in contrast to the -4.4% return of the FBMKLCI.   

Our portfolio tracker still showed a good return since inception.  Our OR tracker portfolio has recorded an average total return of 6.7% since its inception in contrast to the -0.1% return in the FBMKLCI over the same period. The top three best performers (in terms of total return) in our OR tracker portfolio as of yesterday (6 Feb 2013), for which we still have Trading Buy ratings on, are PWROOT (+42.0%), FABER (+42.0%) and OCK (11.1%). We are looking to review our positions on PWROOT and OCK soon as their share prices have already surpassed our target prices. Meanwhile, GCB (-16.5%), COLA (-16.5%) and BONIA (-8.2%) are the top three worst performers in our OR tracker.

Best and worst of stocks sold.  TWSCORP (+36.5%) remained as the top performer in our realised OR portfolio tracker list where we had closed our open position on 20 Sep 2012. In Jan 2013, ADVENTA became the second top gainer after we locked in a profit of 30.7% within seven weeks after our first OR report dated 22 Nov 2012.  Its share price was boosted by its RM1.70/share special payout after disposing off its entire glove business. On the flip side, MKLAND topped the worst performer list after we closed our open position on 29 Jan 2012 with a total realised lose of 13.4%.   

Source: Kenanga