Little Changes Added Up to Imminent Bull Markets

The Singapore second- and third-liners all moved up strongly this week mainly due to rebound in crude oil prices. However, the STI still largely remains in the doldrums. This begs the million-dollar question: Will the STI move up soon?

The HK market has moved up quite a fair bit in the past 3 months or so. My strong sense, based on both my fundamental and technical analyses, is that the uptrend of HK market is still intact and the China market and Singapore market will start to move from here onwards. The following reasons will lend support to my prognostication.

1.      Inclusion of RMB in SDR

As of 1^st October 2016, the Chinese renminbi (RMB) has been included by IMF in the Special Drawing Rights (SDR) together with four other major currencies -- the U.S. dollar, euro, the Japanese yen, and pound sterling. The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. This will help RMB to be more internationalised and increase the foreign funds’ interest in trading stocks in Shanghai and Shenzhen stock exchanges, partially through HK stock exchange.

2.      The countdown to Shenzhen –HK Stock Connect

The Shenzhen-Hong Kong Stock Connect will be rolled out by end of 2016 and so far most pundits believe it will take place in November. This is a strong booster to stocks listed in HK Exchange, especially H-shares.

3.      China expansionary PMI

The China Caixin Manufacturing PMI announced on 30 Sep is 50.1, and the official government Manufacturing PMI is 50.4. It has been a few months for this economy leading indicator to hover above the expansionary level of 50. This should give impetus to smart monies to enter the China and Hong Kong markets.

The China August railway freight volume increased by 1% compared to the same period last year. This number may seem insignificant but it is the first growth registered in a single-month freight volume in the past 32 months. The electricity power consumption in August grew 7.8% compared to the same period last year. The RMB loans were up 11.6% in August as compared to August 2015. These three important figures that economists monitored closely for the health of China ‘s economy have all shown obvious improvement and this should translate into an imminent strong rebound in China’s economy and thus the stock market performance. 　

4.      Entry of A-shares into Morgan Stanley Composite Index (MSCI)

On 29^th September, MSCI Inc. noted that Shenzhen-HK Stock Connect will allow foreign investors to put their money in the US$6 trillion China stock market, and this should help international investors solve their problems of bringing their investment money out of China.

It is expected that MSCI will announce the assessment of all its indexes in June 2017 and there is a likelihood that China’s domestic equities (A-shares) can be included into MSCI emerging-market  index, which is tracked by investors with US$1.5 trillion in assets, even before June 2017’s announcement and if this happens, it will prop up A-shares prices more. The entry into MSCI Inc.’s benchmark indexes will turn renminbi into a truly international currency.

5.      Market Reforms taken seriously in China

China stock market has been a closed market that used mechanisms like freezing the market and making it illegal to short, using government funds to buy shares -- interventions that are not welcome among global investors.

However, there have been a number of market reforms in progress. In February, China regulators allowed qualified traders to shift money in and out of the country on a daily basis, a key change for open-ended mutual funds and ETFs. In May, domestic stock exchanges published rules restricting trading halts. In June, China gave a 250 billion renminbi (US$38 billion) investment quota to the US, allowing American institutions to invest overseas renminbi in mainland markets. The progress made has shown China’s determination to make itself link to the world and this should augur well for the China stock market as well as for the world economy.

6.      Equity Risk Premium are telling us the markets are undervalued

The historical average p/e for matured stock markets are generally around 15x. But when the interest rates are low, the more practical way is to use equity risk premium to determine if the markets are undervalued or overvalued.

Equity risk premium is the excess return that investing in the stock market provides over a risk-free rate. A survey of academic economists gives an average range of equity risk premium of 3 to 3.5% for a 1-year horizon.

From the Business Times Weekend Oct 8-9, 2016, we can obtain latest p/e of various markets. The estimated p/e of HSI is 13.1x, STI is 13.8x and SHCOMP is at 14.1x. The p/e of US S&P 500 is currently 18.3x. If we benchmark against fixed deposit rates, with about 1.5 % per annum, as the risk-free investment, the equity risk premiums are 6.13%, 5.75% and 5.59% for HSI, STI and SHCOMP respectively, which are all better than the range of 3 to 3.5% as recommended by economists.

From mathematical calculation, p/e needs to be around 20x for equity risk premium to be at 3.5% with respect to a one-year-risk-free rate of 1.5%.

This shows that the stocks in Singapore, HK and China are all very cheap compared to putting money in the banks or with government bonds.

The current US two-year treasury bond yield is only at 0.838% partly because all investors are treating US dollars as the safe haven. So, even the USA market which is perceived to be lofty, with p/e of S&P at 18.3x, is still considered as undervalued.

7.      The charts are telling us an uptrend has started

The charts of STI and SHCOMP have shown that both markets are starting to move up and the momentum should be increasing soon. Hang Seng Index (HSI) for HK market has already experienced a bull run and the uptrend is intact.

I hope I have given all a clear picture of why the Singapore and China markets will start its bull run soon. Singapore market will not be lacklustre anymore. I have moved some of my money back to Singapore market after about 20% gains made from investing in HK market for the past 6 months or so.

Download the mobile free apps: InvestingNote and you can find remarks of my recommendations like Rowsley and Ezion W200424. For the latter, I got in at an average price of 5.088 cts on 8 Sep 16, and now it is 8 cts --- a whopping surge of 57.23% in exactly a month. Luck? Not really. It is still about old-fashioned hard work, research, research and research.

For my estimation done in InvestingNote, I will set a target price for a stock I recommended to buy or sell. Once the target price is reached, I will likely post another estimation to ride the trend. But in actual investment, once I get hold of a growth stock and when its price keeps ascending, I will not sell it until Mr Market signals to me that the reversal is imminent. You could see that I have kept raising my target prices for Ezion W200424 in InvestingNote as I am still holding on to this rare and beaten-down gem.

The shrewd investors and smart money have to move their funds to a more lucrative asset class. Period.

Superphang

http://superphang.blogspot.sg

Is investing in Singapore market better than in HK market now?

Over the last six months, Hang Seng Index edged up 12.5 percent more than Straits Times Index and the analysis in my blog that H-shares were the best bet has been vindicated.

From The Business Times Weekend, the p/e of STI at 2857.65 now is 12.24x and the p/e of HSI at 22909.54 is 12.17x. They are almost equal now.  Still, H-shares are the better bet. Why?

I can think of the following reasons:

1. GDP of China at more than 6.5% is still much higher than that of Singapore which is of anything lower than 2%.

2. the average p/e of H-shares is lower than that of HSI.

3. The Shenzhen and HK Stock Connect will propel H-shares to close up the current A- and H-shares gap of 24.96%.

4. The anticipation of Fed Chair Yellen to jack up the US interest rates alone will strengthen the US and HK currencies and thus the influx of foreign funds to HK. Singapore currency, on the contrary, should be weakening due to poor NODX figures.

However, what with the interest rates moving in the opposite direction of the performance of stock markets, and with HSI moving higher, we have to reduce our investment in the stock market unless you can find another phenomenal growth stock like Tencent 腾讯 (Ticker: 700) about 10 years ago.

Superphang

http://superphang.blogspot.sg

The Impacts of Legal Insider Trading & Its Correlation with Stock Performance

Are insider sales and purchases effective in predicting the future price movements of a stock?

Peter Lynch, arguably the best fund manager ever, managed the Fidelity Magellan Fund from 1977 to 1990, during which time the fund's assets grew from $20 million to $14 billion, achieving a CAGR of 29.2% and beating the S & P 500 index benchmark in 11 of those 13 years. In his books, he shared that he made use of insider trading as one of his strategies to buy stocks. I read his books and have adopted this tenet with alacrity in some of the stocks that I purchased, e.g. 800 Super (my blog posted on May 29, 2016), Singapore Land (before its privatisation), Innovalues, Ellipsiz, Best World (my blog on April 23, 2016 ) and all have produced wonderful profits for me.

Peter Lynch made his point straight: If the boss buys his own company stock, the only reason is he sees potential in his company and he thinks the stock price will go up. But if he sells the stock, it is not necessary that the company is not doing well.

Insider trading happens in different kinds of companies, big or small, and can be at any time.  The information is, through my trading experience, more crucial in smaller companies than large companies. All stock exchanges will impose strict regulations, restrictions and penalties if the substantial shareholders do not disclose their trades within a certain timeframe after the transactions have been concluded. The information will be disclosed quite timely for all market players and we have to make use of it to our advantage.

We need to classify the insiders into different levels. The top insiders -- people like CEOs, CFOs, Directors, Chairmen of the board – are generally able to trade more profitably than other insiders. It is quite easy to come to that conclusion as they are privy to the company’s developments. The investment funds, even though they are substantial shareholders, either will not have the big picture or they will receive the information at a later stage.

The market timers and asset allocators will be encouraged by evidence that insider trading data can predict future stock returns. But my years of experience and knowledge told me that not all insider trading information is equally predictive. I would like to share with you the nuances between the various insider trades to increase your odds of picking the right stocks at the right time:

1.    Insiders typically have undiversified portfolios as their holdings are huge. They also generally get stock as compensation. Being rich and risk-averse, they will want to diversify their portfolios. So, to buy more shares in the same company runs counter to the principle of diversification and the only reason that insiders would buy more has to be the positive development of the company they are privy to. They can sell to diversify, for liquidity reasons, or for other reasons. Sales are still informative but less informative than purchases.

2.    Insider trading in small companies is more predictive. It is generally easier for top executives of smaller companies to understand everything about the company.

3.    When insiders trade frequently and have large trades, those transactions are more predictive.

4.    Try to wait for some time, say 3 months or so, to see if you can get the stock at a price cheaper than the insider’s. This is not to suggest that the insider is wrong in his prediction of the company’s future growth. Most of the time, the technical analysis do not support the price moving upward when the insider bought the stock. If the price has gone higher before you get in, so be it. There is always another opportunity.

5.    If the price of the stock moves up and an insider is buying it, it is very predictive.

6.    If the price of the stock moves up and an insider is selling it, it does not imply that the company is in trouble. The scenario can be: The insider knows the company is doing well and there will be a good earnings announcement, but he needs to sell some shares to raise money. There will usually be a restrictive period for insiders to buy or sell within a month before the quarterly result announcement. So the insider postpones the sale until after the stock has priced in the good news. The insider has no intention to exploit future stock-price declines. It is timed to take advantage of the good news and in that sense the insider’s sale is not that informative.

7.    Even with insider trading, buying into strength and selling into weakness tends to be more informative. We have to worry if the insider sale takes place when prices are falling.

8.    You still need good diversification even when you buy stocks after insider purchases.

In a nutshell, investors willing to 'mimic' large trades by top executives of smaller companies will make money and the effectiveness of the purchases is nuanced by the above summary that I have made.

Superphang

http://superphang.blogspot.sg

800 Super: The Uptrend Trajectory Is Intact

800 Super Holdings, another defensive stock listed in the Catalist of the Singapore Stock Exchange, is worth a closer look even when its price has surged substantially of late.

800 Super has grown steadily since its inception as a waste management solutions provider to a one-stop provider of waste and environmental solutions by expanding into the cleaning, recycling and horticulture industries. It is one of the four licensed public waste collectors in Singapore appointed by the National Environment Agency (NEA). Its industrial and commercial waste collection services span across various industries including shopping complexes, hotels, factories, shipyards, etc.

In Singapore, 800 Super was awarded by the NEA for the cleansing of public areas including public roads and pavements in the North West and South West district which almost covers half of Singapore. Its horticultural services include grass-cutting, planning and maintenance of landscape and aboricultural services that include the planting and pruning of trees and plants.

800 Super’s business  is considered non-cyclical and defensive  as the waste still needs to be collected and the roads still needs to be swept during both good and bad times.

Between FY2011 to FY2015, its profit has a compound annual growth rate of 39.86%. The company has been giving out dividends in the past years and FY2015 being the highest at S$0.02. This translates to a dividend yield of 3.03 percent based on the closing price of $0.66 on 27 May 2016.

The trailing price-earnings ratio is at 6.73x.

800 Super largest shareholder Yong Seong Invesment increased its holdings in the group in February at a price of 43 to 44 cts, which has increased its stake in 800 Super from 66 to 66.8 percent.  

Being defensive and in an industry that has relatively high entry barriers, the worst case scenario will be that the company has stopped growing and will maintain its p/e at 6.73x, this should give its investors a return of 14.86 percent per year, some of which will come from the dividend declared by the management board, and some in the retained earnings which should be reflected in the surge in share price.

The transaction volume of the share is usually very low but both the prices and its volume have gone up substantially lately as market players started to have interest in it. Due to the illiquidity of the transactions, chart reading is not useful. This is a stock more for investors with a long-term horizon.  

Going forward, there are three highly possible scenarios that I think of:

1.       Privatisation of the company: the share price will surge.

       2.       Bonus issue: the share price will surge.
       3.       Giving better dividend: the share price will surge.

Superphang

http://superphang.blogspot.sg

The Power That You Want In Times of Uncertainty

Today I will recommend you three electricity power houses: HuaDian Power 華電國際 (1071), HuaNeng Power 華能國際 (902) and DaTang Power 大唐發電（991）. All have been giving solid and consistent dividends for the past four years, with an average yield of 10% today. All have very low forward p/e, at 4.8x, 5.3x and 6.6x respectively. All have very low forward p/b, at 0.66x, 0.74x and 0.48x respectively. They are H-shares and all are substantially cheaper than their A-shares counterparts listed in Shanghai Stock Exchange. Their A/H premiums are at 60%, 68% and 130% respectively.

The prices closed at the end of 25 May 2016 at HK$3.83, HK$5.03 and HK$2.00 respectively. All have been hovering at their respective nadirs and waiting for the ever-mysterious time for a breakout. And I think now is about the time for the exacting breakouts to take place due to the following reasons:

(1) They are defensive stocks whereby all people have to use electricity be it good times or bad times.

(2) The prices have dropped by 25%, 25% and 15% respectively from the beginning of 2016 and value investors would want to get the solid dividends as the ex-dividend date are drawing near.

(3) During times of uncertainty, these stocks with steady and high dividends are the best bet. Their dividends are payable only once a year, so you stand to get on average 10% returns within a short time.

(4) The charts have all shown that the turning points are around the corner.

(5) These three companies operate in an oligopoly environment, where barriers of entry are relatively high.

Superphang

http://superphang.blogspot.sg

Get Nice Holdings (HK:0064) Issued Positive Profit Alert

Based on the preliminary review of the unaudited consolidated management accounts of the Company for the year ended 31 March 2016, it is expected that the profit attributable to owners of the Company for the year ended 31 March 2016 will substantially increase as compared to the same period of 2015 (profit attributable to owners of the Company for the year ended 31 March 2015 was approximately HK$260.6 million). The increase is primarily due to the increase in revenue from margin financing interest income, the increase in income generated through our brokerage services, and the increase in income generated from investment, for the year ended 31 March 2016, when compared to the same period in 2015.

Click here for link to the official announcement.

Best World: Buy Low Sell High

To me, the secret of successful investing is simply to buy low and sell high. But how to achieve it is another matter altogether.

Today, I want to share with you my personal experience on how I achieve it in one of my Singapore stocks.

The Central Provident Fund (CPF) Investment Schemes in Singapore allow us an option to invest a certain amount of our Ordinary Account to enhance our retirement nest egg. The CPF board pays its members 2.5% interest per annum for the money in their Ordinary Account. So, if the members have confidence that they can find stocks that can earn them better than 2.5% annually before they intend to use the money for other purposes like property investment, they should invest in those stocks.  

 

My OCBC bank CPFIS quarterly statement showing the stock (BWL) in my account

I bought 97,000 shares of Best World International Limited (BWL) through CPFIS on 16 Dec 2008 at 20.5 cents apiece. I sold all of them at 64.5 cents apiece on Friday, 22 April 2016. This 3-bagger achieved for me a compound annual growth rate (CAGR) of about 20%, taking into account the dividends paid to my CPF account over the years. This, to me, is no mean feat as Warren Buffett has achieved a CAGR of 19.6% in his 40 years of investing journey.

I bought it then because of:

1. Company had been giving consistent dividend of more than 3%, which was better than CPF’s 2.5%;
2. Company had been almost debt-free and the bosses bought their own company's shares occasionally;
3.  Company had the vision and plans to expand the market to cover Thailand, Indonesia, Taiwan, Myanmar and China; and 
4. The price dropped drastically partly due to the 2008 Global Financial Crisis.

I sold it because of:

1.    The trailing price-earnings ratio is slightly more than14x which, to me, is not attractive anymore and I should be able to find another stock that can give me higher returns than that;

2.    In order to give me a CAGR of 20% investment returns for the next 10 years, BWL has to maintain an earnings per share CAGR of 38% which is a tough call even though I know it may be possible; and

3.    The price came down more than 10% from its peak of 72.5 cents on the same day I sold the stock.

The price of BWL may still go up further after I sold it. What we need to know is that we can never be accurate enough to catch the peak but we have to try to eat the best part of the meat. I may buy BWL back if its price declines to a level that I find it attractive again. Come what may, I will just maintain my discipline to stick to my proven strategies.

 

 So, the two takeaways for today are:

1.    The greatest difference between a stock market and a casino is: You will lose money in the casino if you gamble for a long time as time is always your enemy. You will win money in the stock market if you buy a good stock or an index Exchange Traded Fund (ETF) and keep it for a long time as time is always your friend in the stock markets.

2.    The reason to sell a good quality stock must only be that you can find a better stock elsewhere or that the stock has not been attractively priced by the market.

Superphang

http://superphang.blogspot.sg

Emperor Capital (HK:0717) Issued Positive Profit Alert

Emperor Capital Group Ltd (HK:717) issued a positive profit alert, expects to record a significant increase in the consolidated profit for the six months ended 31 March 2016 as compared with the corresponding period in 2015. Such expected increase is mainly attributable to the increase in interest income from the money lending business benefiting from a stronger capital base of the Group resulting from the Company’s fund raising exercises completed in June and July 2015 and the Group’s strategic focus on the expansion of its money lending business.

The stock was recommended in this blog on 18 April 2016.

Click here for the link to the official announcement from www.hkexnews.hk.

It All Starts With An Appropriate Mindset

Investing has to be a serious business, not entertainment, not gambling.

If you are putting your hard-earned savings in the financial markets, it is important that you participate as a serious investor, not as a speculator. You must make sure that you know the difference between the two.

Many speculators have learnt that luck can only help them a few times but they will soon discover that they are losers in the long run. Without the correct mindset, the cost of not being able to distinguish between a good and a bad investment is just too high to bear.

So, resist the temptations to listen to the tips from your colleagues and friends. Spend enough time to understand deeply the risk vs reward of the proposed investment or give it a miss totally.

All markets work in cycles. Emotional investors inevitably lose money. By contrast, investors who take advantage of the market periodic irrationality have a good chance of enjoying sustained success.

Superphang

http://superphang.blogspot.sg

Never waste a laggard that has consolidated so well

The world may have slowed down and stock markets stagnated. But if you are hardworking, you should be able to spot some gems that are going to rise in the near term.   

I intend to talk about Emperor Capital Group Ltd (HK:717), an investment holding company. The company is principally engaged in providing a range of financial services in Hong Kong. It provides brokerage services for securities, futures and options traded on the exchanges in Hong Kong, the United States, Japan and the United Kingdom, and provides margin and initial public offering financing, as well as loans and advances to its clients in Hong Kong.

The Shenzhen-Hong Kong Stock Connect will surely be launched by the end of 2016 and this cross-border scheme will surely benefit stock brokerages, especially big laggards like Emperor Capital Group Ltd.

It has consolidated very well with shrinking volume for the first two months of this year after reaching its nadir and market players have started to see some price actions at the end of last week. When the stock markets of China and Hong Kong were badly ravaged in July 2015, the management of the Company did a share placement at HK$0.88 apiece which was 50% above the market price then. This has shown that its management has every confidence in the company.

If the price is at HK$0.70, the trailing p/e of Emperor Capital is at 6.43x, p/b at 1.1x, yield at 3.29%. Market cap is at HK$4.03b, a good size for seeing the fast rise in price if there are interests generated in it.  The highest price done in the past year was achieved in last May at HK$2.32 and it has dropped about 70% since then.

All indicators from the chart of Emperor Capital have pointed towards an impending surge once volume is increased by the syndicates after they have accumulated enough ammunition.  It is time to increase your stake for this gem if you have not already done so.

Superphang

http://superphang.blogspot.sg

The Good H-shares In Hong Kong Market Are the Gems In 2016

The 2015 GDP growth for the U.S. is 2%, for China 6.9%, for Singapore 2.1%, for Hong Kong 2.4%. So, it is obvious that China is the happening place. But what about the valuation of the stocks traded in respective bourses based on their average or collective price-earnings ratios (p/e)?

The trailing p/e of Dow Jones Industrial Average (DJIA) and S&P 500 is between 16x to 18x. The trailing p/e of Shanghai Composite Index (SHCOMP) is 16.3x, for Straits Times Index (STI) 12.1x, and for Hang Seng Index (HSI) about 10.4x.

SHCOMP is formed by all the stocks listed in the Shanghai Stock Exchange. These include about 1000 stocks and many bonds and other instruments. For HSI and STI, only 30 blue chips are included.

If we take only the blue chips listed in Shanghai Stock Exchange, the trailing p/e will only be around 10.5x. So, I have identified that high GDP growth happens in China and low p/e stocks are in Shanghai Stock Exchange. What else do you want?

However, some of these blue chips are also dual-listed in the Hong Kong Stock Exchange. Today, they are collectively around 31.9% cheaper than their counterparts listed in the Shanghai Stock Exchange, i.e., the collective trailing p/e of China blue chips listed in HK Exchange is only around 8x --- this is valuation at crisis level by whatever yardstick you may adopt. That is why value investors should place more emphasis on stocks listed in Hong Kong Stock Exchange.

Those dual-listed stocks in the Shanghai Exchange or Shenzhen and denominated in RMB are known as A-shares and those in the HK Exchange H-shares.

Yes, H-shares are what we should focus on. But what about the entry point? It is about now.

There are other reasons why we have to seriously take a look at H-shares at this crucial period.

1.       The probability of getting A-shares blue chips to be included in MSCI Index in this coming June is very high and this will boost the confidence of all market players in the China bourse. The p/e of A-shares blue chips should rebound from 10.5x to 13x and that will mean SHCOMP should reach 3600.

2.       MSCI index did not adopt A-shares blue-chips index in last June because of instability of the RMB and market accessibility issues. Most of the problems have since been largely resolved by the China Securities Regulatory Commission. Once the A-shares are added, prices of both A-shares and H-shares are expected to rise because many fund managers will have to buy them to add to their own funds and all exchange-traded funds that track the MSCI index will be forced to add those shares.

3.       The Shenzhen and HK Connect will surely be rolled out before the end of this year. This will increase market liquidity and brokerages and finance companies will benefit the most.

What you have to do is understand the H-shares and buy some of these gems before the sharks smell the blood.

Superphang

http://superphang.blogspot.sg

Which is better? Technical Analysis or Fundamental Analysis

The answer depends on whom you ask the question.

For me, what I want to pursue can be aptly explained by the famous quotation from the then Chinese paramount leader, Deng Xiaoping (1904–1997): It doesn't matter if a cat is black or white, so long as it catches mice. However, the more fitting statement is: It doesn't matter if a cat is black or white, so long as it catches BIG mice.

So, my strategies will encompass a host of effective methods with a view to making BIG money.

But we need a target. My method has yielded about a compound annual growth rate (CAGR) of 30% so far for the last 10 years. I may have been lucky, but I have achieved it. So, moving forward, a CAGR of 30% is the realistic target I set for myself with the proven strategies I have been adopting.

I invest in properties and stocks. I take investment as a serious business. I want to act like a shark: Only when I smell blood will I go in for the kill.

I invest in Singapore listed stocks, stocks listed in HKEx and the U.S. My strategies on stock investment revolve around three main concepts:

1.    Good stocks at correct timing

2.    Contrarian thinking
3.    Independent thinking

Patience, hard work and discipline are the three important qualities that are very crucial in successful investing but these were not taught in schools. A lot of novice investors lack these and learn about it too late.

I find it is about time that some of my effective strategies can be shared with like-minded investors. And I believe if I can do it, so can you.

Superphang

http://superphang.blogspot.sg

You either get it now or miss it big time: Get Nice Holdings (HK: 0064)

With recent surge of Hang Seng Index in the past 7 trading days, many stocks are now more than 20% from their January bottoms, including blue chips such as Henderson Land (HK:0012), Tencent (HK:0700), and Haitong Securities HK:6837). HSI will consolidate in the coming trading days before it can continue its current uptrend, prompted by a more optimistic outlook on the Chinese economy, which recently reported a manufacturing PMI of 50.2, above a forecast of 49.3 from a Reuters poll, returning to growth for the first time since July 2015. That compares with 49.0 in February, which was the lowest reading since 2011.

As HSI is due for consolidation, there are many laggards in the market to be picked from. One of them would be Get Nice Holdings (HK:0064), a company that recently spun off its securities business to form Get Nice Finance (HK:1469), which surged more than 25% in the last five trading days alone. For the past five trading days, Get Nice Securities has outperformed many brokerages such as Emperor Capital (HK:0717) , which rose 10%; Bright Smart Securities (HK:1428), which rose 10%; and Citic Securities (HK:6030). However, this has not reflected in the price of Get Nice Holdings, which holds more than 72% of stakes in Get Nice Finance, whose price hovered around HK$0.27 to 0.285 in the past five days as of 15 April.

Looking at the history and balance sheets of Get Nice holdings, the company has been giving dividend consistently of at least HK$0.02 a year for the past five years. Yield is at a solid 7% based on current price. The company issued Rights 1 for 2 at HK$0.28 in March 2015. Of the company's current share price, HK$0.18 in each share is cash, i.e. 65% of shares are cash, a sign of healthy financial performance.

It is only a matter of time that this company will be targeted for speculation or acquisition, due to the relatively small market cap, which is only slightly more than HK$1.9b.

Technically or fundamentally, there is no better time to get Get Nice Holdings. Even when it reaches the target price of HK$0.40, the yield will still be a solid 5%.

Image Source: www.bigcharts.com