Saturday, May 22, 2021

Wilmar - Over Value Discounting Method

April 30 2021 - Wilmar International (F34) saw its first-quarter net profit double year over year thanks to a strong performance across all its core businesses.

As per a Thursday release, the agribusiness group's net profit rose 100.9% to $450.2 million from $224.1 million, setting a record for its March-quarter results since its listing.

When you see a company reported strong earnings and the price still went down, this mean that the stock had run above its valuation and now under-going normalisation.

BB like to use this over value discounting method when the stock is very bullish and it can just shoot above its valuation many x times.  Then come the day when price action just refuse to move up no matter how good the earnings are.  You can this happening to Gloves and now Tech stocks.   Believe soon will happen to Banks as Warren Buffett begins to lower to banks holding.

Locally, Piyush Gupta, the CEO of DBS Group Holdings, has sold $1.75 million worth of DBS shares via market transaction. According to a filing on SGX, Gupta, on May 20, sold 58,900 DBS shares at $29.75 per share.

The reverse will happens again once Tech devalue till a certain point.  Then under-value stocks becomes in favour again and vice versa.  The cycle always repeat.



Rule number 1: Always put a stop loss before entry, always, no exception. You do not drive a car if it does not have brakes. Have a stop loss first, then think about entry, end of conversation.

Rule number 2:: No Rule number 2, strictly master Rule Number 1 and you are likely to succeed in Technical Trading.

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