Monday, 28 March 2011

How to trade US stock?

Last week, finally i had my US stock account opened, and i applied through TD ammeritrade, which is a reputable online brokerage based at US.

I chosen this online broker as it is reliable with good support, from the experience of few of my friends. Also i'd tried out the tools that you can get them for free after signed up. The trading tools are amazing, both for technical and fundamental analysis.

Also i'm an iPhone user, so i'm enjoying using the iPhone real time trading tool as well.

The application steps are easy, you can straight go and apply online by yourself. Or you can choose to be referred by me, which you will be able to enjoy special offer which is 500 free trades. To be referred by me, please drop down a comment of your full name and email address, or email me at with title of "TD Ammeritrade application".

After you filled in the online application form, you need to print the completed form (Open Your Account.htm) out, and then you need to sign on it. Bear in mind to save this page after you finish filled in the details. Else you will need to reapply later or filled in the form manually.

The documents that you will need are as below:

  1. W-8BEN - this is the only form that you need to mail to them.
  2. Photocopy of your passport.
  3. Your bank statement with your full name on it.
  4. You pay slip - this is optional.
  5. Online account application form (Open Your Account.htm), which is the one that i mentioned to save the page after you fill in the details online.
After your account being approved, you can start to fund your accounts. You can find the details from this page. I personally chose to electronic transfer my stocks from other online account.

Please feel free to drop me any questions.

Also i'm going to start introduce US stocks start from next week, stay tune.

Buy DXN (KLSE 5074)

I bought in this stock DXN (KLSE 5074) last 2 weeks, when the price fell down to RM1.31 due to the Japanese crisis.

DXN Holdings Berhad is the investment holding and management company of DXN Group. DXN´s high regard for quality earned the company many outstanding citations and recognitions from various health and business organizations. Along with the solid foundation and sustainable development, DXN has rapidly diversified into other business activities, which include property, renewable energy, information technology, etc. In its core business of network marketing, the rapid global expansion of DXN is recognized internationally by its vast growth of members worldwide and its amplification of footprint in key strategic locations. With over four million registered distributors worldwide, DXN is solidifying its position as the world leader in Ganoderma products.

I actually knew about this company quite sometimes ago, long before i actually invested in stock market. Is because my girl friend is one of the leader in DXN network marketing. She had been staying with DXN for >7 years now, and enjoying handsome passive income.

So actually i'm quite familiar with the network system DXN is using, and with the system, i believe that the network marketing segment will continue to boom around the world. With the recognized certificates (TGA, GMP, Halal & etc), of cause with great products and marketing plan, DXN is ranked 40th direct selling worldwide in "DSN Global 100", also it had enter 154 countries for now. With 'One Dragon' concept, DXN able to control the cost, and able to come out with affordable quality products.

The EPS ended Nov 2010 is RM0.174, with the price of RM1.31, the PE is ~7.5. The net profit CAGR is ~11%, up from 2006 RM21m up to 2010 RM39.5m. With my own understanding on this company, the global market is still booming, and i expect the EPS for 2011 to be ~RM0.20. With the PE of 10, the target price will be ~RM2.

Also the ROE for this company is meeting my expectation, which is average ~15% for the past 5 years.

Wednesday, 23 March 2011

Another two stocks that i bought last 2 weeks - DXN & SUNCITY

Last week after the massive earthquake at Japan and Libya incident, i decided to buy in some stocks that i eyed on.

Lastly, i bought in DXN & SUNCITY. Well, i will comment more on these two stocks when i'm free this weekend.

Also i'm studying US stock as well, hope that i will come out with one good pick this week. :)

Friday, 18 March 2011

Unit trust, is it a good choice?

I'd attended a seminar/training organized by my uncle, which is an experienced financial planner. The seminar is to introduce about an investment product, which is unit trust or mutual fund.

I did mentioned in my blog earlier that the percentage of the funds to outperform the market is very less. And to pick a reliable unit trust, one need to really study the fund's performance history. Instead, i would like to invest in stock market by myself which i know it would give me better return.

I did asked some questions during the seminar, and it started to change my perspective on unit trust. 

Firstly, there are many people around that might not really good in investment, and most of them just leave their saving in the bank, mostly fixed deposit. Well, with the low interest, it even not able to cater your personal inflation. 

Also, nowadays Malaysian able to invest in unit trust through EPF (Employee Provident Fund). This is a great news, interest that you earned from EPF is averagely 5.25%, and it can merely cater the personal inflation rate. So why don't we go and look for a unit trust that can averagely give you better return each year, probably 10% will do. I didn't aim for very high return, as i think for high return investment, i already had it, with my investment in stock market. And i prefer to have a consistent return of ~10% with the risk that i can afford, as i'm not the one that determine which or where to invest. :) Anyway, i did study unit trust these few days, and able to look for some funds that return ~10% annually.

Below is a table refers to the total base savings that you must have in your EPF account 1 before you are allowed to invest in unit trust.
Base Savings Table for EPF
You can only invest 20% of the amount after you deduct the total in account 1 with the base saving. Let's say you are 29 years old now, and in your EPF account 1, you have total of RM36,000. So meaning that you can only invest RM4000 (20%x(RM36000-RM16000)). This seems to be not much, but you can invest every 3 months! You can always withdraw 20% of the total in your account 1 after deduct it with the base saving every 3 months, and it will end up as a big amount.

Well, i decided to invest in unit trust with my EPF, as i want to earn >5.25% each year with my EPF contribution. For those that are not familiar, it will be wise to find a reliable agent that can provide professional advice per your requirement. Also please bear in mind, invest in unit trust should be long term, as the service charge that you need to pay for the first time is 3%, and there will be management fee ~1.5%, so it is not worth for me if you just plan to invest for short term.

Monday, 14 March 2011

SUCCESS (KLSE 7207) - Success Transformer Corporation Berhad - Part II

Let's continue with yesterday analysis, for the ROE (return of Equity), it is ~19.23% year 2009 which is the highest among the industry. Also for the past 5 years, the ROE is consistently >15% which met my criteria of ROE > 15%.

For the NTA (Net Tangible Asset), is RM136m vs market capital of RM123M, which mean the NTA/share is ~RM1.135.

Now, let's look at the cash flow, cash from from operating activities increased from RM5.7m to RM29.5m y2005 to y2009, giving a growth rate of 39%. By using the DCF (Discounted Cash Flow) method by Warren Buffett which i set the growth rate as 30%. The target price is actually RM7.78! Which is >700% than the current price ~RM1.03.
Considering the PE of the industry around 12, i will actually set a target price of RM2 with PE ~10 for now. I think this is reasonable enough for a high growth company like SUCCESS.

Remembered that i mentioned yesterday that i will check on the dropping of the net profit from 2009 to 2010? It is due to lower contribution of its process equipment segment following the listing of SEB (Seremban Engineering Berhad) on Bursa Saham Malaysia, which reduce its stake in SEB from 100% to 65%.

However i believe with the expansion plan eoy 2010, the company will be able to grow rapidly, thus i will recommend to buying in this stock with a very attractive price now.