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Top 3 Tradable Ideas For The Week
As the world slowly moves to action over the conflict in the Middle East as well as the MH17 crash, stock markets around the world met the geopolitical theatre with a collective yawn. Aside for directly affected stocks (see MAS), other stocks have been more affected by earnings results than any thing else.
Even as stock markets move sideways, some stocks will always attract more attention than others. We take a look at some contributions from our writers at Tradeable Ideas and present to you arguably, some of the top ideas.
Going Long On M1′s Dividends And Good 2Q14 Results
M1′s 2Q14 results saw a 12.1 percent gain in net profits to hit $43.9 million.
Tiered data plans represents an opportunity for local telcos to better monetise data usage.
Interim dividends of 7 cents amounted to about 75 percent payouts from its net profit.
What we think:
Comparing between M1 and its other peers in Singapore (SingTel and StarHub), we see the M1 appears to have appreciated the most (+12.2 percent) versus Singtel’s +8.5 percent and StarHub’s -2.8 percent.
Source: Google Finance, chart comparing M1(blue) with SingTel (red) and StarHub (orange).
From that perspective, we feel that M1 could have most of the above catalysts priced in. However, for $70 dividends per lot per 6 months looks like a deal that most dividend play investors would not give up on. So how? Buylo
(if you have cash sitting around that is earning a pathetic 1.2 percent fixed deposit rate).
Singapore Stock CSI Buy Signal – Pacific Radiance
An additional entry point has appeared on the CSI system at about $1.43.
This represents a 21 percent gain over the initial entry price of $1.18 on 19 May 2014.
An exit criteria could present itself should bearish candlesticks start to appear on Pacific Radiance’s chart.
What we think:
Pacific Radiance seems to be having a gold run since the beginning of this year with very few bearish candlesticks in between. This comes as the stock appears to have some solid fundamentals and good medium to long term company prospects. Investors might also want to note that DBS Vickers has a Buy call on Pacific Radiance with a target price of $1.50 as at 9 June 2014.
Long First Resources At Range Support
Crucial support seems to have formed at $2.30, representing a good entry point for traders.
RSI is inching into oversold region.
Trading target price of $2.42 would represent a 2.4:1 risk-reward ratio.
What we think:
The support line seems to be holding relatively well since the rally at the beginning of March. With its results not due till perhaps the second week of August, this trading call has some time to go before the next important catalyst. From the fundamental perspective however, crude palm oil prices will play heavily in its financial performance for 1H14.
Source: Index Mundi, chart on palm oil monthly price - US Dollars per Metric Ton
Judging from the price ranges of palm oils over the past 6 months and the year before, it looks relatively stable.
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