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Sound Global's chart looks bad and this is probably an understatement.
The black candle formed today is probably the ugliest I have seen in a long time. Gapping down and breaking through all the MAs, it was a headlong plunge.
Could we see share price sinking even lower from here? It looks like it could happen with the MACD diving steeply into negative territory and if it should happen, the next level of support is at 49c.
Fundamentally, I am concerned about the higher finance costs but they are not so destructive as to sink the company. It is still a very profitable company.
My estimate is that EPS could reduce some 20 to 25% this year, everything else remaining equal. If Mr. Market is unhappy with this, he could send share price back to test the low of May 2012 at 45c a share. With the estimated reduced EPS in mind, at 45c, we would be looking at a PER of 9x.
See Sound Global's financial statements: here.
Related post:
Sound Global: Full divestment.
Bloggy Award
18 comments:
Hi AK71
Your timing is just amazing man. Saw your post on full divestment a few days ago and now the fall. . . . . Its like you could almost read the market ^^
Hi Kelvin,
Oh, even I get lucky sometimes. Pure, dumb luck. :)
AK, do not forget to polish your crystal ball nicely. It's so accurate!
:)
Hi Howyuan,
A broken clock can give the correct time twice a day. A crystal ball is, in fact, a lot less reliable!
OK, I will give it a nice polish since you asked so nicely. Now, where did I chuck it? Hmmm...
Sshh... Can take a look at cmz? GIC also divested ...
Hi AK,
A reply from the previous sound global post. I have read your reply and post with great interest. Its definitely my pleasure to talk to someone like you. Yes, a lot of famous investors may not have a formal education on finance related studies, yet are very savvy in the market.
For your info, i'm a 3rd year student in poly and just finished all my final exams. I have started investing when I just hit 18 where a little finance educations kicks in. Thank god, I'm still surviving in the battlefield. haha!
Indeed, Sound global has dropped alot and i'm very relieved and happy because I divested all of the shares like you do.
Technical analysis is very useful.. Ppl can trade these "private infos" without legal liability.
Because Sometimes before the financial report is out, I feel that there's market participants seem to already know the results before hand..
Best Regards,
Dave
Hi seefei,
I am staying invested in China Minzhong although I did divest more than half of my initial investment as its price rose.
Unlike Sound Global, China Minzhong's numbers are strong and improving. They also look set to improve further with Indofood a substantial shareholder now.
I expect synergies between China Minzhong and Indofood to bear fruits over time.
Hi Dave,
You started your journey as an investor much earlier. Good on you. You have the advantage of time. :)
I agree that there will always be people who get wind of news before the general public do. These are usually insiders or people who know insiders. I guess the playing field is never level.
As long as we stick to a tried and tested system that has worked most of the time, we should be OK.
I will not say that there is a system that will never fail because I do not think such a thing exists.
As for famous investors, I avoid fame. I don't think I am particularly savvy. I will not lay claim to being a guru or talk about many years of experience in the stock market which means I have a "Masters Degree" or a "PhD" from Mr. Market.
I want to stay grounded and constantly remind myself that I am not infallible. :)
Hi Ak,
Lucky we disposal holding in Sound Global on time.
I still concern with the sudden departure of CFO.
And now out of sudden, we have a new Executive Director and CEO as well. I will prefer to stay clear.
Meanwhile i am happy today because i brought some Marco Polo at 41.5 cents which is cheaper than Lee Wan Tang recent purchase of 42 cents. :)
Hi Yee,
Yes, we have good reasons to be concerned, of course. :)
Sound Global's share price is experiencing a strong rebound today, testing support turned resistance.
Although it is hard to be sure, I have a feeling that share price might soften again quite soon.
Ak71,
It is either u r god or syndicate controlling this stock;)
Hi Garfield75,
Oh my. If I were either one, I wouldn't be blogging at all. ;p
This is still a good company with a good business model in a growing industry.
I just have to wait for when value becomes more compelling.
I agreed with you.
That is why I'm stalking his blog posts and comments all along! You can't imagine how important this blog meant to me....seriously!
Hi flyingchicken,
You are scaring me...
-.-"
Sound global back to 49.5 cents...;) make less is better than none;)
Hi Garfield75,
Coincidentally, I was just looking at the chart. It seems that it closed right at support. If this should break, we could really see 45c tested next.
Hi Ak,
Sound Global has reached the $0.49 support level.... Glad we have made the right decision to close our position at that time.
It seem like a very steep down fall and no signal of stopping... Will be watching this 0.49 level to see whether it can hold.
Hope there is no fundamental problem with the finanical.
Cheers.
Yee
Hi Yee,
Support is holding up quite nicely, it would seem. I went back in on the long side today. I hope I will have the energy to blog about it later.
Work has been very demanding this week. Tired.
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