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Although its latest quarterly report does not inspire much confidence, fundamentally, this should be a sound business in the longer run.
China is bent on improving its infrastructure, including the improving of sanitation and increasing the availability of clean water supply. Sound Global is a logical beneficiary.
In the shorter term, however, it would be reasonable to expect margin squeeze and higher finance cost which would be a drag on performance. The rather sudden departure of its CFO is also a possible red flag.
Technically, momentum oscillators continue to trend downwards. The breaking of the rising 50d MA to the downside in yesterday's session was a bearish signal. Today, that signal was confirmed as a doji was formed below the 50d MA.
With momentum weakening and signs of distribution, we could see a lowering share price over time and the longer term 100d and 200d MAs tested for support. These are at 58c and 57c respectively.
There could be a better time to invest in Sound Global again some time in the future.
Related post:
Sound Global: Would I buy now?
Bloggy Award
11 comments:
Agree!
Hi Garfield75,
I still like the business and will keep an eye on its numbers. :)
AK, interested in Hyflux ? :)
Hi coven,
Hyflux's valuation is rather rich for me. I will avoid. :)
Divested when it was at 69cts with a small profit.
Hi seefei,
Congratulations. :)
You've dodged a bullet!
Down by 8% today ;)
You very de good!
Hi SMOL,
I am just lucky here. Really. :)
Hi ak may I know whats your prior experience b4 u started investing? For eg, studies or work? I have read ur articles for almost half a year and I share same opinions on certain trades :) ur blog is very beneficial on learning to invest..
Hi Ak,I have read ur blog for almost half a year. I really learnt quite a lot from you and it's great to share similar opinions on certain trades. I'm just curious, may I know what have u studied or worked b4 you started investing?;)
Hi Dave,
I started investing when I was still an undergraduate in the university.
You might want to read this rather candid blog post: Excuse me, are you an investor?
I graduated with a Bachelor of Arts with Honours in subjects unrelated to finance. I went on to do a Diploma in Business in a night school a few years later and work as a business manager in a local SME. I was also teaching for a while. I think that about sums it up.
I definitely do not have any wow factor and I do make mistakes. I am as common as anyone else I know.
I happen to know a bit more about investing and I am happy to share. I am happier still if anyone has found my blog helpful. :)
I am also happy when people offer divergent views from mine. In fact, I welcome them as long as they are put across in a coherent and civil manner.
After all, we can't learn anything new if we only talk to people who know the same things we do, right? :)
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