My 5 simple steps will lead me to simple but effective value investing. My way to minimise the risk and maximise the gain.
Step 1: Check the PNL. Profit? Potential turnaround to profit?
Aim the bull: Yes, profitable. Able to turnaround after hit by Cambodia
business crisis, lucky they able to relocate the machines to other
location when government cancel the licensing. Nevertheless, business
now turn positive, double digit growing.
Step 2: Check the cash flow. Where is the money generate? Where is the money go?
Aim the bull: Net cash position now. Money generate from profit now, not borrowing.
Step 3: Check the Balance Sheet. Is it only left the shit (e.g debt)? Cash status?
Retained earnings for potential bonus issue? NTA vs price? Fair value vs price vs NTA?
Aim the bull: Retained earning still in red, but expected turnaround
soon. Overall balance sheet health look good. No suspected value in
risk.
Step 4: Check the price status? Which wave? Uptrend? Downtrend? Consolidation? At peak? Measurement of margin of safety?
Aim the bull: Now in consolidation price. Good for entry, i always like
to buy at consolidation mode or bottom mode. Or when no public shooting.
I don't like join the crowd to rush for buy.
Step 5: How is the outlook of the existing business and any potential sales pipeline?
Aim the bull: The management now smarter in handle risk management,
business now start growing aggressively, ambitious team, visionary boss.
Outlook promisingly.
All check: green light to go buy
Next Strategy : Buy in batch.
Target price: 0.30 but i wish it can be my 2nd IFCAMSC selection move.
Next Strategy : Buy in batch.
Target price: 0.30 but i wish it can be my 2nd IFCAMSC selection move.
Trade @ own risk
RGB (0037) - RGB - penny but pretty
http://aimthebull.blogspot.my/2016/05/rgb-penny-but-pretty.html
