This week we do not have any potential superstock of the week. We do have a number of promising stocks that passed the technical screens.  ...

Weekly Superstock Scan 16 July 2018 - 20 July 2018: Nil

This week we do not have any potential superstock of the week. We do have a number of promising stocks that passed the technical screens. 

In the US market, we have BRT, CNTF, HCAP and JASO. Of these, BRT did have consecutive quarters of EPS growth. However, as BRT is a REIT, which is not a sector producing superstocks. With the share price trending strongly, it will still be a good stock to purchase for a smaller return. 

In the Singapore market, LHN limited passed the technical screen but did not have consecutive quarters of EPS growth. It did have catalysts for growth but having a poor record for Singapore stocks this year, I will need to be more picky with my potential superstock candidates.

The potential superstock for the week is Ameresco, Inc (AMRC). AMRC provides services and products for customers to reduce their energy con...

Weekly Superstock Scan 9 July 2018 - 13 July 2018: Ameresco, Inc (AMRC)

The potential superstock for the week is Ameresco, Inc (AMRC). AMRC provides services and products for customers to reduce their energy consumption, lower their operating and maintenance costs and realize environmental benefits. These solutions include upgrades to a facility’s energy infrastructure, construction and operation of small-scale renewable energy plants and photovoltaic (PV) equipment.




AMRC has four reportable segments:
  • U.S. Regions
  • U.S. Federal
  • Canada
  • Non-Solar Distribution Generation - sells electricity, processed renewable gas fuel, heat or cooling, produced from renewable sources of energy, other than solar and O&M services for customer owned small-scale plants.

Technical



AMRC has been trading in a box between $11.10 and $13.20 since March this year. Since May, AMRC has been trading in an even smaller range between $11.10 and $12.65. Last week, price broke above both boxes to hit a high of $13.95 before closing at $13.48. The volume of the week was around 600 thousand shares, which is about the average volume in the past 30 weeks. However, AMRC has seen a sustained surge in trading volume since price broke out back in March 2018.

There was no news released by AMRC last week, and earnings are not due for release soon, hence the cause of the spike is unknown.

Fundamental


Including the most recent quarter, AMRC recorded 4 consecutive quarters of year-on-year EPS growth. 

Contract Wins

AMRC are not only winning more projects, but also larger and more complex projects. The average project size in their awarded backlog is $10 million compared to $7 million in the contracted backlog, reflecting the current trends in the market place. The higher frequency of these large awards sharply illustrates the effectiveness of their focus on large and more complex projects. 

Two weeks ago, AMRC and Lendlease announced a partnership to modernize more than 5,800 privatized military housing homes at Island Palm Communities in Hawaii through a $150 million energy security and modernization project to provide turnkey energy efficiency improvements and new solar energy systems.

Increasing Backlog

As a result of winning more contracts, AMRC are seeing a larger backlog. The fully contracted backlog increased y-o-y from $505.0 million to $595.6 million in March 2018 while the awarded backlog increased from $1,138.2 million to $1293.0 million in March 2018.

The increase in backlog will give more assurance of future growth in revenue and profit.

Increasing Energy Assets

Although projects form more than two-third of AMRC's revenue, it is the recurring lines of business (O&M and Assets) that provide the bulk of AMRC's profit. AMRC has been actively building on its energy assets through development and acquisitions.


As at end March, AMRC owns 210 MWe of assets, with an additional 90MWe under development. This includes the new plant in Arizona which is expected to come online during the second half of 2018 and AMRC has also executed agreements to purchase two large solar projects in Massachusetts.

Matrices
o Small float of 20 million shares with a average daily trading volume of 123,000 shares. The float is more than 160 times its average trading volume
o AMRC is trading at 14.2 times its trailing twelve months EPS.

Risk Factors

  • Unconvincing Breakout - Probably because the breakout last week was not linked with a catalyst, the breakout lacked conviction. The candle did not close on its high and its volume is average. This will reduce the probability of a follow through.
  • Increasing debt - More debt is required to finance the additional energy assets, and AMRC is expected to bring on another $100 million worth of debt for the projects in construction.


We have officially entered the second half of the year. I ended the first half of 2018 on a mixed note. On one hand, my hit rate has been es...

Weekly Superstock Scan 2 July 2018 - 6 July 2018: Nil

We have officially entered the second half of the year. I ended the first half of 2018 on a mixed note. On one hand, my hit rate has been especially low. I have exited most of my positions on a loss for the US stocks, and none of my Singapore stock picks actually made it. The good news is one of my potential superstock, BXC, tripled in value, and the profit from this stock is more than enough to cover the losses from a number of stocks.

I certainly hope to find more stocks like BXC in the second half of the year, and at the same time increasing my hit rate. Is it an issue of stock picking or my execution strategy? I will need to evaluate my trades to come out with the right conclusion and the right remedy.

To start off the second half of 2018, it's another week with no potential superstock. This is not surprising in recent months as the market transited from a trending market to more of a trading range. 

There are still four US stocks that passed the technical screen - CLDC, FNJN, GBR and SALM. Of these, only FNJN had consecutive quarters of EPS growth. However, its business model seems too weird to me. Basically, FNJN only had 10 employees, and their business model is to acquire patents and profit from litigation. I could not see how a company with such business model can grow its profits to be a superstock, hence decided to give it a miss.

I have been blogging on potential superstocks in the US and in Singapore. The reason for choosing these two markets is simple. I chose to lo...

Weekly Superstock Scan 18 June 2018 - 22 June 2018: Nil

I have been blogging on potential superstocks in the US and in Singapore. The reason for choosing these two markets is simple. I chose to look for Singapore stocks because its my home country, and the US market because it is the biggest stock market in the world.

Last week, the Trump-Kim summit happened right here in Singapore. I am really proud of my country for hosting the event. Out of so many countries in the world, this relatively small and unknown country had the honour of hosting the event that may possibly bring world peace. This shows that our diplomacy, security and efficiency were recognised internationally. 

For my readers, if you do not know where Singapore was previously, I hope that with the massive media coverage, you will know where the humble owner of this blog is located now.

Enough of the rant, but sad to say, there is no potential superstock this week. We have only seen two US stocks that passed the technical screen, namely AUTO and VSLR. Both stocks fell short of passing the fundamental screen.

The potential superstock of the week is GSH Corporation (SGX: BDX). GSH is a property developer in Southeast Asia, with four propertie...

Weekly Superstock Scan 28 May 2018 - 1 June 2018: GSH Corporation (Singapore)

The potential superstock of the week is GSH Corporation (SGX: BDX).


GSH is a property developer in Southeast Asia, with four properties under development in Kuala Lumpur and Kota Kinabalu, Malaysia. It also owns and operates the Sutera Harbour Resort in Kota Kinabalu, comprising two fivestar hotels, a 104-berth marina and a 27-hole championship golf course. In 2017, the Group completed the redevelopment of its flagship commercial property, GSH Plaza, which it later divested that same year. The Group also has a 30% stake in associated company, Henan Zhongyuan Group, which owns one of the largest food logistics and warehousing hubs in China.

Technical


GSH was trading at a high near $0.59 in the beginning of 2017. Thereafter, it start to trade in a trading range and started to trend down in the beginning of 2018. Since end February, GSH has been trading in a narrow trading range from $0.46 to $0.49. Last week, price broke above the range to close at $0.505. The volume of the week was 2.15 million shares, slightly more than 2 times its average trading volume.

There was no news released last week, but the surge in price probably obtained its momentum from the positive news two weeks ago, where all 100 units of the Coral Bay released in a private preview were sold out.

Fundamentals



Including the most recent quarter, GSH recorded 5 consecutive quarters of year-on-year EPS growth. 

Investment in China's Logistic Industry

In FY2017, GSH completed its S$41.0 million investment for a 30% stake in Henan Zhongyuan Group, which owns one of the largest food logistics and warehousing hubs in China. With more than 1,000 tenants, it houses a one-stop platform for food manufacturers, wholesalers and distributors.
In FY2016, this Hub transacted more than RMB 50 billion worth of trade.

The investment in the industrial assets is held for lease and yielded good returns. In FY2017, the Group recorded a total share of profit of S$17.3 million from HZY, consisting recognition of net negative goodwill of S$11.7 million from the investment and share of operational profit of S$5.6 million.

New Residential Projects

GSH owns 67.5% of Coral Bay, a 460-unit luxury condominium nestled within the gated community of Sutera Harbour Resort, in Kota Kinabalu, Sabah. Two weeks ago, it released 100 units at a private preview event, and they have been over-subscribed. The total value of these units exceeds RM330 million. The successful launch shows the strong demand for the Coral Bay and there is a good chance that there will be continued demand for the remaining 360 units of the project.


This year, GSH is also planning to launch its second luxury residential project in Kuala Lumpur. On 12 February 2018, GSH acquired a 50% stake in a prime land parcel of approximately 1.4 hectares in the heart of Kuala Lumpur’s Chinatown that could potentially be developed into a premium 1,700-unit condominium. Given's GSH good track record at its first residential project in KL - Eaton Residence, GSH does have a good chance of succeeding in this second project.

Insider Buy

The chairman of GSH, Goi Seng Hui (wow I just realised did the chairman tried to name the company after himself while claiming GSH stands for Global Strategic Holdings) owns about half of the company's share. On top of that, he has been buying back shares of GSH frequently this year, with the biggest purchase being a 3.4 million buy at an average price of $0.47. He appears to be very confident on the company moving forward, or will there be plans for a buyout in the future?

Matrices
o Large float of 540 million shares with a average daily trading volume of 230000 shares. The float is more than 2000 times its average trading volume, hence the stock is unlikely to see intraday big moves.
+ GSH is trading at just 11 times its trailing twelve months EPS.

Risk Factors/ Things I do not like:


  • New Malaysian Government - With a new Malaysian government in place with the recent election this month, government policies may have an impact on GSH's projects in Malaysia. The new PM, Dr Mahathir has on several occasions criticised on Chinese investments. This may cause Chinese buyers, one of the main target group for GSH's upscale property, to hold back on their purchase.
  • Low liquidity - The trading volume for GSH is generally quite low. There are a number of days in the past three months when no stocks are traded in the entire trading day. Buying and selling the stock without losing too much to spread may be an issue.
Powered by Blogger.

Disclaimer

All information in The Trader Diaries (TTD) does not constitute to investment advice or recommendation to buy, sell or hold. Readers are advised to consult their financial advisors prior to making any investment or pursuing any investment strategy. TTD will not be liable for any losses resulted from information published or shared from the blog.