Sound Global: Fully divested once more.

I entered long positions at 50c and 52c because, respectively, I saw critical support levels holding up and because the reversal signal was confirmed. With the stock spotting weaker numbers, I got back in more with a trading mentality.

The question really was when to sell?

Technically, I was not convinced that the declining 20d MA was a strong resistance because I saw low volumes as price hit it and softened. A much stronger resistance, I thought, was at 57c. If you take a look at the chart, you will probably see why I thought so.

Fundamentally, Sound Global had a bad 4Q 2012. Earnings sank some 46%, quarter on quarter, and some 23%, year on year. All said, the company is still very profitable and it is still growing.

Its biggest problem stems from much higher finance costs and although I feel that the longer term big picture still looks good for the company, this will remain a bug bear for quite a while more.

Why do I remain largely optimistic about the company's prospects?

1. Sound Global has a huge order book of some RMB 3b, the largest in its history.

2. Sound Global has more than half of its BOT projects due for completion by end of 2013.

These will increase earnings, everything else remaining equal. Will earnings improve enough to make Sound Global a compelling investment once more? This is a harder question to answer.

Annualising 1Q FY2013's EPS which is, in RMB terms, 4.77c gives us 19.08c for the full year which is approximately 3.8c in S$ terms.

This means that at 57c a share, we are already looking at a PER of 15x for 2013. This would mean that we have hit fair value for the stock. Why?

The company's competition's PER is about there. The historical mean PER of the company is about there too.

If we choose to err on the side of caution, then, this valuation of Sound Global's stock and the looks of the technicals suggest that selling at 57c is not a bad idea. So, with price a bit higher than 57c this morning, I fully divested my stake in the company which makes this the second time in slightly more than two months.

See Sound Global's 1Q FY2013 results: here.

Related posts:
1. Sound Global: Full divestment.
2. Sound Global: Long position at 50c.

Buy direct from Japan with free shipping!

When I was in Japan in December of 2011, the Japanese Yen was S$16 to JPY 1,000.  Today, it is S$12.50 to JPY1,000. This is good news for anyone who likes Japanese goods!

If you enjoy finding great deals in Japan, there is some good news!

"Rakuten Global Market" is an overseas shopping service for the Rakuten Ichiba internet shopping mall and they will hold its first-ever free shipping event covering more than 200 countries and regions around the world for a limited time between 10:00am, Tuesday, May 14 and 9:59am Friday, May 17 (Japan Standard Time). 

Over 1,300 merchants with millions of products from Rakuten Global Market will take part in this limited time offer in which customers outside of Japan and Japanese nationals residing overseas can make purchases like fashion items, bags, watches, cosmetics, health goods, hobby merchandise, toys, games, and sporting goods, and have it shipped globally for free!

Check this out and enjoy value for money offers at:
http://sg.sharings.cc/AK71SG/share/RakutenGFS

Your might also be interested in:
Saving money with low prices and free shipping.