Dare To Touch Property Stocks?

Warren Buffett — ‘Be Fearful When Others Are Greedy and Greedy When Others Are Fearful

The current property sector in Malaysia does not look promising at this juncture. The property sector’s current stagnation may last as long as 10 years, an industry expert claimed today. Property consultant Ahyat Ishak said a similar slowdown took place from 2000 and 2009, adding it was possible that this could be the start of another such cycle. See more at: http://www.themalaymailonline.com/malaysia/article/property-expert-suggests-market-could-stay-flat-for-decade#sthash.hosDSQHs.dpuf

So would one dare to trade property stocks? One may consider of taking a look at a Malaysian-listed property company, Daiman Development Berhad.

Company Background

Daiman Development Bhd. is an investment holding company, which engages in the property development business. It operates through the following segments: Property Development, Property Investment, Non-Property Investment, Trading, Leisure and Recreation, Hotel Operation, and Other. The Property Development segment includes development of residential, commercial, and industrial properties. The Property Investment segment manages and operates buildings. The Non-Property Investment segment focuses on overseas investment. The Trading segment comprises of trading activities in building materials. The Leisure and Recreation segment operates sports, golf and recreation clubs, and bowling centre. The Hotel Operation segment operates hotels. The Other segment comprises of property management, investment holding, and dormant companies. The company was founded by Kia Hong Tay in 1972 and is headquartered in Johor Bahru, Malaysia. http://www.daiman.com.my/

Daiman Has Lagged Behind The Property Sector 

For year till date, Daiman has lagged behind the property index in terms of share performance: Property Index (+>16%) vs Daiman (+>4%), suggesting that there is a possibility of Daiman playing catch up with the general property index.

BM Prop vs Daiman_30Apr2017.jpeg

Reasonably clean balance sheet, with cautious optimism by management

Daiman has minimal gearing and management is cautiously optimistic about its near term performance. It has a net asset of RM5.43 per share, which is more than 2 times the current trading price of RM2.26 per share.

Daiman_BSDaiman_Prospects

Buying Support By Major Shareholders

Daiman_InsiderTrades.png

How Would One Trade?

Considering the prevailing uncertainties with property sector, one may consider short term swing trading for stocks in this sector. With respect to Daiman, its recent trend seems to suggest that it is in a consolidation mode (since Sep last year). For illustration, if you intend to take a long trade, one may consider RM2.20 as a possible entry price (as it is currently not in an over-extended position), with potential exit and stop-loss to be assumed at RM2.54 and RM1.98 respectively.

TA_Daiman.jpeg

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES MENTIONED IN THE ARTICLES.

Author: Ken Utau

Markets Observer + Food Lover

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s