MSKY ready to rally

I am showing you an idea for trading this week. This is a triangle pattern from MSKY. It started the pattern in December 2012. The breakout level is around 2400, which is giving a projected upward at 3300. (By measuring the height of the triangle).

Hope that this target could be reached in about 5 to 6 months and could generate around 24% return from today close.Happy profiting.. !

TAXI overweight TP 1,600

(Code : TAXI:IJ  TAXI.JK)

One of the Buffet stock picking strategy is "Circle of Competence" - which is selecting a businesses that he can understand and analyze. TAXI is one example of stock that we can easily understand and analyze with relatively steady cash flow.

Owned by Rajawali group, the company provides taxi service in Indonesia especially in Jakarta, Depok, Tangerang, Bekasi, Surabaya, Semarang and Medan. It has regular taxi service, premium taxi services and also operates value added transportation business (VATB) through its subsidiaries and associated companies, which provides the limousine in Bali, Bandung, Lombok and Jakarta.

I established a projection in spreadsheet with assumption that TAXI could maintain its revenue growth at 50% in 2013 an 2014 as shown below :

Based on this projection, I derived the ideal price for Taxi at the end of 2013 and 2014 by multiplying its EPS with multiplier factor as shown here :

P/E Ratio	2014	2013
15 x	1406	1205
20 x	1875	1607
25 x	2344	2009

Based on this projection, I believe the fair price of TAXI at the end of 2013 should be at 1200 - 1600 with 15x and 20x multiplier factor.

BKSL is forming the famous "Tri Star Doji" ????

BKSL (BKSL:IJ, BKSL.JK) is another top pick in property sector. With huge undeveloped land bank in very nice hill view at Sentul, good access to Jakarta, BKSL is a nice pick for a long term investor.

The central Bank of Indonesia just maintain it's record-low policy rate at 5.75% for a 14th consecutive month today as inflationary pressures in the coming months may ease. This action will boost property sales at at least the same pace as last year.

In February 2013, BKSL booked marketing sales of RP 169 Billion (17.5 MillionUSD) or a 3.6 times of its February 2012 sales.

But I just gonna show you a technical point of view regarding the famous "Tri Star Doji". I looked at the chart today, and I just wonder is it true that BKSL has formed the "Tri Star Doji" ??

ALAM SUTERA (ASRI) top performer this quarter !

ASRI (ASRI:IJ, ASRI.JK) is one of the best performer this quarter. I personally hold ASRI as my current top holding. It has gained around 60% ytd.

If you look at the chart, the 23.6% fibonacci retracement at around 1000 level has failed to support ASRI recently, hence we are anticipating ASRI to touch it's 38.2% fibonacci retracement at 900 - 920 level. Fundamentally, property sector is one of the favorite sector in indonesia equity market. With supply has been limited while demand grows fast in recent years, we are still put a lot of confidence in this stock.

Based on data from reuters, the trailing twelve months PE ratio is around 16.60x. It is significantly much cheaper compare to its peer such as SMRA PE 25, BKSL PE 45, BSDE PE 22. Based on this data, we believe there is still plenty room for this stock to move up further with our TP 1,200. So, get ready to accumulate this stock when it reach 900 - 920 level.

Summarecon Agung (SMRA), Overweight !

Indonesian stock market started the year of 2011 with some inflationary risk concern which forced the index to slump almost 10%. Major sector with interest rate sensitive like banking, property, automobile plummet.

I personally agree that the downside risk would be significantly contributed by inflationary threat. This condition will push investors to shift their portfolio into commodity related stocks. Like we have seen recently, SMRA also hit by this condition with -15% ytd based on today closing price. I will show you some numbers about SMRA. While we are waiting for the FY 2010 report, it would be relatively profitable trade for you who are optimistic about this stock since it has been extremely undervalued these days.


(Click to enlarge)

Based on the Income statement summary, we could see that SMRA's revenue is growing consistently and the growth relatively exponential. The annualized EPS in 3Q 2010 is much higher than the previous quarters. With this result, we could assume that the 4Q result would also grow.


(Click to enlarge)

The ROE also significantly grow each quarter. With the growth of the asset faster than the equity which has been shown, we could assume that SMRA is extremely in its aggressive expansion. If the condition of the economy conducive, this aggressive expansion will be transformed into cash flow.

With those assumptions and another assumption that the growth of SMRA is 10% based on its 3Q EPS and 3Q Book Value (BV), I proposed this valuation guide:

VALUATION	10% growth
PE 20 X	978.57
PE 25 X	1223.22
BV 3 X	1064.49
BV 3.5 X	1241.90

From this valuation, the fair value of SMRA at the end of the year should be in the range of 980 - 1250.

BUMI Resources, Maintain Buy

The JCI has been performing as the best market in the world this year, with ytd return of 40%. Some of the blue chip stocks has been continually making a new record high. One of the laggard is BUMI. As we all know, BUMI management always make some maneuver that for some investors is so hard to understand. That makes BUMI performance ytd is -5%.

The plan to divest its subsidiary Bumi Resources Mineral into an ipo this year will become a trigger to its stock price movement. Me personally still put some confidence in the future of this stock, the recent right issue to convert some of its debt into stock also could be seen as a positive signal for the future cash flow.

The transaction of this conversion was in the price of Rp 2,375, hence with the price of BUMI today of 2,300 per share should be seen as a discount.


In the beginning of 2010, I estimated the price of BUMI would be 4,000 at the end 0f 2010. I think we have to revise it target price based on current condition. I put 3,300 as the ideal target price for BUMI at the end of 2010. I noticed that lately foreign investors are accumulating this stock, hence I am expecting that when the JCI loose its momentum to go high further, investors will shift their portfolio to BUMI. We will see whether my guess will become a reality.

Infrastructure is on Fire..

I believe 2010 would be the year for Infrastructure sector to get back on fire. The FY 2009 results for some infrastructure related stocks that I cover were excellent. JSMR net income has grown about 40% year on year, WIKA has grown its net income about 25%. ADHI net income is more fantastic grew about 100%.

Over the last 6 months, the infrastructure sector has been lagging the overall market. If you look at this chart, obviously the last couple of days, ADHI, WIKA, and JSMR have started to chase the Jakarta Composite Index (JCI). I believe this is just the beginning and there is still more potential upside for those stocks.

(Source: Bloomberg.Com)

From valuation point of view, those stocks are also still very cheap. Based on their FY 2009 EPS, I made some projection for their FY 2010 earnings with either 20% or 30% growth.

	FY 2009	GROWTH
		20%	30%
		2010F	2010F
ADHI	94.2	113.04	122.46
JSMR	146.5	175.8	190.45
WIKA	33.7	40.44	43.81

Based on the data, the ideal price for 2010 would be:

	PE 10x		PE 12x
	20%	30%	20%	30%
ADHI	1130.4	1224.6	1356.48	1469.52
JSMR	1758	1904.5	2109.6	2285.4
WIKA	404.4	438.1	485.28	525.72

Hence, I would recommend you guys to accumulate these infrastructure related stocks.

JCI: a Record High

the Jakarta Composite Index (JCI) has been rallying since mid February 2010 to reach a new record high in its history at around 2900. The foreign investors are the major buyer with total fresh fund inflow more than 3 trillion rupiah for the 1Q 2010.

In the last few days, the market has some correction. I believe this is just a normal correction, while the overall trend is still bullish.


(Source Dongsuh Securities, edited)

If the JCI could maintain its first uptrend support, the JCI would continue the rally again in the next few days. But I prefer to choose the second possibility. The JCI might not be able to maintain its first uptrend support, hence it would retrace to around 2730 (38.2% fibonacci retracement). Hence, if this is the case, I suggest to take some profit and wait until JCI reach 2730 that might be happen in about a 2-3 weeks, and then get along with the bull again.

JCI: Wacth out of a correction

In the last few days, the JCI has gained significantly. Since the breakthrough of the ascending triangle pattern it has gained about 4%. The yield to date per today close is 5.61%.

If you look at the chart, you could see that JCI has a very good volume that confirmed the bullishness. I also notice that some foreign brokers are still accumulating Indonesian blue chip stocks.

(Source: Dongsuh Securities, edited. Click to enlarge)

While in the medium and long term I am still positively bullish on the market, it would be wise to take some profit in the near term. I am afraid that traders would take some significant profit in the coming days, based on the technical chart. If you see the ascending triangle pattern, the highest level might has been reached according to the tip of the point in the triangle. That’s the common rule in triangle pattern.

I also noted that there is a 50% chance that the JCI would form a “double top” pattern which is usually a bearish sign for traders. If it is the case, JCI could retrace to 2600 level. Hence, I think it would be wise to take some profit. Personally, I set 75%-80% as the target equity holding in my portfolio and 20%-25% as cash. If the JCI does retrace, I am expecting the JCI to reach a new high before the first semester of 2010.

Sampoerna Agro SGRO, Buy TP 3250

Bloomberg Code: SGRO:IJ
Reuters Code: SGRO.JK

I would like to discuss Sampoerna Agro (SGRO). I like this stock and I believe it would grow at least 20% this year. I would show you the fundamental data and I also would show you some technical perspective.

Fundamental Data

(click to enlarge)

I made a projection for full year 2009 which is shown on the above table. I noticed that the revenue growth on 3Q-2009 and 2Q-2009 mostly due to the substantial increased in CPO prices. I believe this price trend would be appropriate to be included in the full year 2010 projection.

I also believe that the 2010 net margin would be similar to the current margin, with tendency to increased.

Based on my assumption and projection, I derived the ideal price for full year 2010 with appropriate PE multiplier of 11x-12x.

Expected Price	FY 2010F
PE 11 x	3005.92
PE 12 x	3279.19

This price target I believe would be reached by the end 2010.

Technical Point of View

I also like SGRO because it has retraced about 38.20% since its long rally which is started in September 2009 with initial level 1950 and has reached the highest level at 3075. The 38.20% Fibonacci retracement should be at 2645. This stock has reached 2675 today and closed at 2700. If in the next few days the stock could maintain its support around 2650-2675, I believe this stock would bounce back and might continue the long rally to reach a new high.

Based on my short analysis, I would recommend a "BUY" for SGRO with TP 3250

Target for 2010

The market starts the trading day in 2010 with confidence and full of optimism. You guys might have your personal target for Jakarta Composite Index (JCI) this year. (Please join the poll at the bottom of my blog). Me personally, set 2950 – 3000 as the target for this year or around 15% - 20% return for full year 2010.

The commodity sector I believe would be the main index mover at the beginning of the year, with BUMI as my favorite stock in this sector. I set the TP for BUMI at 4000. The plan to double its production in 2012 would be the main factor to the price movement.

The other stock that I like from Bakrie group is ELTY. The Book Value of ELTY today is around 213. If ELTY could grow about 20% this year, its book value is expected to be at 250. With P/BV ratio of 2, I am expecting ELTY to reach 500 at the end of 2010 or more than 100% gain.

I also still like cement sector with SMGR as my top pick. I am expecting SMGR to grow 20% - 30% this year. With this projection of growth, I am expecting SMGR to reach 9000 – 10000 level this year. Since 2005, SMGR has been successful in growing its book value 20% every year. Hence, I believe it is not a difficult task for SMGR to repeat its growth story.

In banking sector, I would overweight BBRI. I am expecting BBRI to grow 15% - 25% this year. The yoy inflation rate in December 2009 at 2.78% is very likely to boost the credit consumption. The TP that I set for BBRI is at 9200.

Here is the summary of the target price of the index and some stocks that I picked:

	Price 2009	Target Price	Potential Gain
JCI	2534	3000	18.39%
BUMI	2425	4000	64.95%
ELTY	193	500	159.07%
SMGR	7550	10000	32.45%
BBRI	7650	9200	20.26%

ELTY 61.8% Retracement, TP: 225

Bloomberg Code: ELTY:IJ
Reuters Code: ELTY.JK

I would like to discuss ELTY from technical point of view. In my observation, ELTY start the long rally at 55 level and reached the highest level at 390. In the last few months ELTY has been decreasing substantially due to its group (Bakrie) right issue for some of its subsidiaries. The Dubai crisis also has triggered this stock to go down further.

I would show you some chart to get some ideas to buy this stock with fibonacci retracement approach. With its rally from 55 to 390, the 61.80% retracement is around 183 level. If in the next few days the stock shows some strong support around 183, I would recommend a speculative buy for this stock.


(Source: Dongsuh Securities)

BUMI has rebounded more than 8% today. I am expecting that the other Bakrie stocks would follow BUMI to rebound. I would set 222.5 level as the first target (50% retracement), with potential gain about 20%.

Here is the complete retracement level:

23.60%	310.94
38.20%	262.03
50%	222.5
61.80%	182.97
100%	55

BUMI is Lagging the market

Over the last 3 months BUMI has been lagging the overall market. This condition, I believe due to the management way of handling the debt. My previous price target of BUMI was 4000 at the end of 2009. It is very little chance for BUMI to reach that target. Even though BUMI would not be able to reach 4000 this year, I still optimistic that BUMI would pass that target next year.

I would show you some charts, showing the relative performance of BUMI against the other stocks. The first chart would show you the performance of BUMI against other coal stocks over the last 3 months.

(Source: Bloomberg, click to enlarge)

As you can see, BUMI performance is -17% (green line) and the mining index is close to 0 (yellow line) PTBA and ADRO both are performing so nice up more than 25% (red and yellow lines)

On the second chart you could see that compare to other large cap stocks, BUMI has been lagging these other large caps. BBRI (green line), ASII (yellow line), and SMGR (orange line) are performing positively.

(Source: Bloomberg, click to enlarge)

The future performance of BUMI would heavily influenced by the 3Q result which will be published the end of the year. If the result is good, I believe BUMI would go beyond 3000 level.

While the Jakarta Composite Index has reached 2500, it would not go to 2600 if BUMI which is heavily weighted the index still lag the market behind. I am expecting BUMI to reach 2800 at the end of the year, so that the JCI rally would continue.

Tunas Ridean (TURI) is attractive

Bloomberg Code: TURI:IJ
Reuters Code: TURI.JK

PT. Tunas Ridean (TURI) operates automobile dealerships that sell new and used motor vehicles, spare parts and accessories as well as provide after sales services. The company also provides operating lease and consumer financing services.

As a cyclical stock, TURI could be considered as one of the stock that you have to hold in your portfolio these days. The automobile industry is still growing in Indonesia which has large domestic based demand. The improvement in the global economy recently would also contribute some significant portion in TURI’s next quarter sales. While we are approaching the end of the year, I projected the demand of vehicles would be significantly higher in the coming months.

The 3Q-2009 sales has growth more than 30% q/q. I projected that TURI would grow it sales at least 15% in the next quarter. I will show you my projection:

TURI 4Q-2009 EPS PROJECTION

(in Mio RP)	4Q-2009F	3Q-2009	2Q-2009	1Q-2009
Sales	1,631,344.00	1,418,560.00	1,077,900.00	1,045,830.00
Opr Income	32,626.88	27,769.00	16,388.00	7,526.00
Opr Margin	2%	1.96%	1.52%	0.72%
Net Income	60,359.73	51,072.00	42,755.00	140,283.00
Net Margin	3.70%	3.60%	3.97%	13.41%
Total Share	1395	1395	1395	1395
EPS	43.27	36.61	30.65	100.56
Ann EPS	173.07	146.44	122.59	402.25

With the projected annualized EPS of 173.07, I derived the ideal price of TURI at the end of 2009. I believe the ideal PE multiplier would be in the range of 10 – 12x.

TURI EXPECTED PRICE

Expected Price	4Q-09F
PE 10 x	1730.74
PE 12 x	2076.89

INTP: The Growth is real

The cement industry is growing still. My favorite stock in this industry is Indocement (INTP). If you guys have been following me, on my last post I showed you guys the fib retracement as a tool to buy this stock(Here: http://indoekuitas.blogspot.com/2009/10/get-ready-to-ride-bull.html ) On that post, I recommended the 23.6% retracement as the level to buy this stock at 10.400. This week INTP closed at 11.800, so you guys might have made about 13%.

I'll show you guys the q/q result of INTP.



Even though the sales were not growing that fast, INTP capable of making consistent growth on its EPS. I believe on the 4th quarter the revenue would grow faster and would reflected on its EPS.



The 3Q-09 q/q earning is growing although only 3.9%, while the 2Q-09 was growing 33% q/q.

Get Ready to Ride the Bull..!!

In the last few days, the stocks have been in a pullback situation. Fund managers and major investors are taking some profit in the Indonesian market which has been the best performer this year. For me, as an optimistic and a very bullish trader, I see these days are the best time to enter the market.

I would show you guys some perspectives and ideas to time the market from technical point of view.

BMRI Daily Chart
(Source: Dongsuh Securities, edited)

The chart above is the Bank Mandiri (BMRI) candle stick. The chart shows that BMRI has been pushed down beyond the major moving average line (the red MA line). It could be seen as a sign that BMRI is entering a bearish situation. I tried to figure the fibonacci retracement from BMRI chart to get an ideal price to buy this stock. The March 2009 was the initial long rally, with initial price of 1750. The highest level was 5300. The 23.6% retracement for me is an ideal price to get in. The price of 23.6% retracement is around 4462.


INTP Daily Chart
(Source: Dongsuh Securities, edited)

This is another chart of Indocement (INTP). The rally was started on March 2009 with initial price of 4250. The highest level was around 12300. The 23.6% Fib retracement is 10400, which is an ideal level to buy this stock.

The best price level to buy those stocks are unique for every investor since every investor has his own risk-aversion or risk-taking level. For an aggressive investors, 23.6% might be the best level but for moderate investors 38.2% or 50% might be the ideal level.

Here is the summary of the retracement level for BMRI, INTP and SMGR.

Fibonacci	BMRI	INTP	SMGR
Retracement
23.60%	4462	10400	6174
38.20%	3944	9225	5663
50.00%	3525	8275	5250
61.80%	3106	7325	4837
100.00%	1750	4250	3500