Sunday, 2 February 2020

Stocks on my watchlist are not cheap enough for me yet...

It has been a very bad week for investors who are vested.

To me adding is always an art because you have to balance with what you have in stocks already and your cash levels while thinking if repeated adding would be effective against your portfolio. Of course how fast you replenish your cash levels matters as well.

The urge to add more has always been there this week but its really not cheap enough yet.

HSI as of 1 Feb 2019 was  27930
HSI as of 31 Jan 2020 was 26312.

Going by rationale the 1 year performance would be roughly down about 5%

Will go over the watch list vaguely

China Property Coys (KWG Grp), Cement Coys (Conch Cement, Asia Cement)
- Its not anywhere near its 1 year lows yet.

Macau Concept Stocks (Galaxy Ent, Shun Tak Hold)
-3% down from 1 year price is not really an attractive entry for Galaxy Ent
-Shun Tak being a holding coy of SJM, is not near its 1 year lows as well.

Counters that I already held (1100, 610, 2686, 8502)
-610 not at 1 year low
-2686 is at a 1 year low but having added through out the past 12 months, would probably want a lower price to add more
-8502 only initiated in past 2 months
-1100 being the only counter i would want to add as it has really corrected in the past 12 months. The only reason i have not added is because the 3 months return and the 1 week return difference is roughly 4% which i feel the 'virus' effect has not kicked in on this counter.

NWS Holdings (44% down in 1 year)
-This is quite interesting as the company has found a new low once again. Being a mid/large cap definitely does have its implications of moving with the market trends and industry trends.
-Its possibly one of the companies that you would buy if you bet that the virus and protest are short term problems.
-Roads (Likely traffic affected due to lesser travels and possibly companies stopping work)
-Aviation( Plans to tap into the China Leasing Market a real bane as air travels in China should be at an all time low)
-Duty Free Shops, Convention Centres (Tourism double whammy, Virus + Protest. Possible cancellations of Exhibitions, Concerts and Shows)
-Transport (Some operations affected such as Macau HK connecting buses and Ferries Operations)e
-Construction (Should be fine but order books under threat if prolonged situations result in lesser expansion)
-Insurance (Should be fine as well but have to see the numbers.)
-Logistics (Likely affected due to lesser business activities by companies resulting in lesser demand for ports and storage operations)
-Environment (Should be fine)

The headwinds are plenty for this company. The impacts are most likely going to be reflected in its full results in September instead.
Though the results briefing in Feb for its half year and its reports should give some clue.
Estimating the impact is quite difficult for this company such that one has to just keep averaging if the long term belief is things will be better.

I believe the upcoming week should see some purchasing opportunities. I would be terribly surprised if i don't see any.