Building my 2013 Portfolio

2013 will be here soon, and I am excited, because each year, different themes come into play. For 2013, I definitely believe China will be the theme. Therefore, I will be building a portfolio mainly around China. Even Noble and Wilmar, I consider them as China plays, since commodities demand are fuelled by the Chinese.

My current portfolio:

Counter	Buy Price	Price Now	Gain (Unrealised)
Midas	0.37	0.42	13.5%

I will try adding more if stock market corrects. Of course, my portfolio will not be limited to China shares. If I spot a good opportunity in the rest of the sectors, rest assured I will jump to trigger the Buy button.

2013 Candidate # 4: Pan Utd

The fundamentals:

Recently, a brokerage recommended this stock for its good fundamentals. Although I couldn't agree less, is this stock still a good buy? Let us look at its technicals.


The technicals:

This is what I call, the "developed beautiful chart", red line (50d MA), above blue (150d MA) above green (200d MA). What a nice uptrend!

But should we buy? Too late to the party.

2013 Candidate # 3: China Minzhong

The Fundamentals:

1. Olympus Capital, a private equity fund, has sold its entire stake of 57m shares in China Minzhong through a private placement last Thursday at SGD0.80 per share. In our view, this placement is a positive for Minzhong as it removes a long-term share overhang on the company without adding too much selling pressure in the open market.

2. Management took advantage of the vendor share placement to increase personal stakeholdings. This clearly signals management’s confidence in the company’s fundamentals and the attractiveness of its share price.

3. We are looking at an average of 15% EPS growth for the next three years. As it stands, Minzhong’s share price is deeply undervalued at the current 2.9x FY13F PER. Reiterate BUY with the target price unchanged at SGD1.16.

(Source: Kim Eng)

The Technicals:As with other China stocks, I am positive on this stock. The recent selldown certainly represents a buying opportunity.

                                                                

 

However, between this and Midas,I prefer Midas. Furthermore, I was already considering buying this stock back when it was in the 50s. I will give this a miss.

 

 

 

 

 

 

2013 Potential Candidate #2: Swiber

The fundamentals:

1. The stock is trading below peer average valuations at only 5.8x FY13F PER and 0.6x P/B.
2. Orderbook in 2012 reached a high of USD1.7b YTD. Management believes it would get even better in 2013.
3. With enlarged fleet, Swiber is poised to benefit from the robust offshore sector. EPS should grow by CAGR of 18% over FY12-14.

(Source: Kim Eng)

The technicals:

A gentle but nicely developing uptrend formed by higher highs and higher lows.

Verdict: Can buy, but I would wait for correction. Note that RSI now in overbought zone.

2013 Potential Candidate #1: Midas

The fundmentals (source: KimEng):

1. Recovery still at early stage
2. More years to go for China’s high-speed rail
3. Upstream customers’ order wins a key catalyst
4. Expect earnings recovery from 2H13.
5. New round of train tender offers is a high probability
6.  Boon for Midas if CNR(Chinese Railway Company) wins potential tenders

The techinicals:

MAs are indicating a developing upward trend.


Bonus factors:

A play on recovering China economy.


Verdict: Buy. I am vested.

 

Which will be the next Ezion?

As we know by now, Ezion has come a long way from 0.40 since Oct last year , hitting a high of 1.51 just last month (a 300% increase!)

Some others which have exhibited similar patterns are:

 

Of course, there are many others. But we are not interested in the past. More interestingly, which stocks will take off in the coming year? I will be writing about these soon.

Why I am still bullish... at least for first part of 2013

Despite fears of the fiscal cliff, China slowing down and US and Europe possibly going into recession, the markets are refusing to budge. Therefore, I am still bullish on the stock markets for the following reasons:

• I am betting that the fiscal cliff will get some resolution
• Over the last five years, some $500 billion has poured out of equity mutual funds and $1 trillion flooded into bond funds. Virtually every category of investor is running equity exposures at historic lows. A reversal of these flows would trigger the mother of all bull markets.
• The Fed will keep good on its promise to keep interest rates at zero until 2015.
• The European Central Bank will continue its never-ending monetary stimulus

How much will the markets rise?
The S&P 500 could clawing its way to $1,600 or more by the end of 2013, up some 13% from here.

Source: Presented by John Thomas, Global Trading Dispatch, Market Authority

I am especially bullish on stocks related to China at this moment .