Courage Marine: Added at 10.5c a share.

It has been some time since I wrote about Courage Marine. With the BDI in a downtrend, there was no reason to go long on this counter. The last time I did something pertaining to this counter was a divestment when news of a dual listing in Hong Kong was made known.

However, as I like the company, I have been tracking its performance which is of course closely tied to the BDI as most of its revenue is derived from spot rates.

The BDI was consolidating for many months. Since hitting a low in early 2011, 1,250 has been established as a support, four times tested no less. 1,500 was breached recently and retested successfully as support. The BDI has broken out of its consolidation phase and we could be seeing a trend reversal starting in earnest.

Courage Marine's share price went lower than its low of end 2008 recently. This means that the market expects the company to do worse than it did in the last recession but with the BDI breaking out of its consolidation phase to the upside, the fundamentals seem to suggest something else.

So, I have tip-toed back into Courage Marine, re-initiating a long position in the company. Technically, I am wary of initiating too big a long position because the declining 20dMA could push price lower again. If price were to overcome the 20dMA convincingly, we could see 12.5c and 13.5c tested next.

Related posts:
Courage Marine: Profit warning.

Bullish on Noble, IndoAgri, Genting and DBS?

I was reading The Straits Times online edition. Yup! AK71 is catching up with the Times! I love this pun!

There is an interesting article by Andy Mukherjee titled "Don't get seduced by analysts' darlings" and he selected four stocks as examples.

Andy is of the opinion that "analysts are overly bullish. They are beginning to turn nervous, but are far from throwing in the towel."

He also said that "for choppy markets to get better, sentiment must first hit rock bottom. Like it did in the first quarter of 2009."

Stock #1: Noble Group

"Analysts are still wildly bullish about Noble... (with) consensus estimate for the stock (suggesting) a 35 per cent upside.

"Noble shares fell more than 80 per cent between June and October 2008."

Stock #2: Indofood Agri Resources

"With the hiving off of Salim Ivomas Pratama, .. the company is sitting S$860 million in cash, with little clarity from management on future expansion. Meanwhile, the profit accruing to Indofood shareholders grew less than expected in the June quarter... The consensus estimate for the stock's target price is about 33 per cent higher than the current price."

Stock #3: Genting Singapore

"Chip volumes declined 13 per cent from the previous three months... Overall, though, the analyst community is still gung-ho on Genting... (and) the consensus target price is still 28 per cent higher than the market price."

Stock # 4: DBS

".. local currency interbank rates in Singapore... have collapsed. One key rate - the swap offer rate - has even turned negative.... The consensus in the analyst community, however, is that DBS Group's fair value is 28 per cent higher than what the stock currently sells for.

"If the Singapore economy slips into a technical recession this quarter and loan growth slows markedly, then the lingering optimism on DBS could dissipate. That could be risky for investors.

"For now, the cash in your mattress is quite safe where it is. If you really want to do something with your money, consider stocks with high dividend yields."

I do not think staying in cash 100% is a good idea since Mr. Market has a way of surprising us sometimes. Will we have a recession for sure? What if markets simply continue to trade sideways while inflation rages on?

Even famed New York University economist Nouriel Roubini, a perpetual bear, puts the risk of a double dip recession at 60 per cent probability and not anything closer to 100 per cent certainty.

The more we expect something to happen, the more it might not happen. So, without perfect knowledge, the best strategy, in my opinion, is to have a warchest ready even as we stay invested.

Oh, I am not vested in any of the above stocks.

Related posts:
1. Should we be staying invested or in cash?
2. Sleep well at night with a plan.
3. Stock market analysts.
4. A capital question: How much to have or how much to use?
5. Investing in REITs: A flawed strategy?
6. Dr Marc Faber: How not to lose money?