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Golden Agriculture: Eyeing immediate support.

Thursday, August 12, 2010

Anyone who has been following my blog would know that I have a preference for Golden Agriculture over Indofood Agri.  The former is more of a pure CPO play and I have said that demand for oil will improve over time even in a weak economic recovery.  Therefore, CPO is a natural beneficiary.  As Golden Agriculture is the most levered to the price of CPO amongst all the CPO companies listed on the Singapore Exchange, fundamentally, it would outperform if CPO price stays high. In terms of valuation, Golden Agriculture remains the least expensive CPO play as well.




Today, its price closed at 57.5c which is where we find the rising 20dMA. Although the MACD is declining and has completed a bearish crossover with the signal line, it is interesting to note that OBV has formed a higher lower.  It seems that distribution is weakening.  Of course, the higher high on the MFI is still valid.

Drawing an uptrend line from the low of 7 Jun, it is easy to see that a support that approximates the rising 50dMA. This should be a very strong support.  However, it might not be tested if the 100dMA holds up as immediate support at 55.5c.




By OCBC Investment Research, 12 Aug 10:
Golden Agriculture: Company Update.

Related post:
Why Golden Agriculture?

6 comments:

Anonymous said...

Hi AK71, just discovered your blog and it's great! I also believe in income investing and am also a REIT lover! I buy REITs all over the world, including Singapore :)

A few things I want to ask you. (1) I bought MIREIT a few years back and now it's of course AAREIT. I'm a *long* way from home. How sure are you that this an investment for long term keeping and is it time to top up yet?

(2) What do you think of Cambridge REIT?

(3) What do you think about buying J-REITs directly? (I live in Hong Kong, not sure how easily you can buy Japanese stocks in Singapore). Yields are quite reasonable.

Thanks! Victor

AK71 said...

Hi Victor,

I am happy to welcome a new reader always. :)

I believe that the renamed MI-REIT is a much stronger entity. AIMS AMP Capital Ind REIT now has the second lowest gearing level in the world of industrial S-REITs. The lowest is Cache Logistics. Annualised DPU is 2.15c which gives a yield of 9.35% based on a price of 23c. It is also trading at a huge discount to its NAV at 31c.

Cambridge REIT has a clown for a CEO. You could probably read about the fiasco that happened late last year when he tried to take over MI-REIT and lost millions in the process. I am very wary of its gearing level at >40%.

I don't know how to buy into J-REITs directly but I am very familiar with Saizen REIT. I read somewhere that J-REITs' yields average 5%. Am I right? Not very attractive to me. ;)

I am visiting Hong Kong on business next week. Haha.. Hope things are going well for you there. :)

Anonymous said...

AK,

You're right, J-REITs' average yields are lower than that of S-REITs (although there are a few yielding higher than a respectable 7%: http://www.japan-reit.com/page/data-top.html). I am a REIT junkie and love to collect REITs. Since my portfolio is already heavily inclined towards REITs, I thought I should at least have some geographical diversification :)

I am happily reading your old blog posts... So Saizen and First REIT are your favourites then?

Victor

AK71 said...

Hi Victor,

I feel that Saizen REIT has a lot of potential. Someone I chatted with said it is "grossly mispriced". I am looking forward to its report on 26 Aug (Thu).

I like First REIT. Yup, this one's for keeps. High yield, low gearing with assets in a defensive sector.

I like AIMS AMP Capital Industrial REIT as well. I shan't bore you with details here if you are already reading my old posts. ;)

Thanks for visiting again and do give my ZUJI banners a chance if you are travelling. If you find a good deal and make a purchase, I would get a small commission at the same time. :)

Anonymous said...

Sure I'll keep that in mind. I look forward to Saizen's report and perhaps might consider buying a small amount.

AK71 said...

Hi Victor,

You might get your chance sooner than later. ;)

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