Sunday, May 27, 2012

Why the sudden surge in Popular Holdings shares?

From 1 March price of $0.169 to 25 May price of $0.199. That's a 17.75% increase in just 3 months. Have you wondered why is there an increase?

If you have searched SGX's company announcement website, you would have notice that there is some insider transactions reported in the months of April and May.

On 02 April announcement, Mr Chou make an open market purchase of 3.173 million shares at average price of $0.17741 on 30 March.
On 09 April announcement, Mr Chou make another open market purchase of 250,000 shares at average price of $0.179 on 5th April.
On 14 May announcement, Mr Chou make another open market purchase of 256,000 shares at average price of $0.182 on 11 May.
On 17 May announcement, Mr Chou make another open market purchase of 4.935 million shares at average price of $0.188 on 16 May.
On 21 May announcement, Mr Chou make another open market purchase of 1.796 million shares at average price of $0.185 on 18 May.
On 24 May announcement, Mr Chou make another open market purchase of 3.098 million shares at average price of $0.191 on 23 May.

All in all, his company, also registered holder, World Holdings (Pte) Limited, has bought 13.508 million shares. The total cost for these transactions is $2,506,021.93.

I doubt Mr Chou is stopping to acquire Popular shares in the near future. I still feel that Popular Holdings is still an undervalued company. At the current price of $0.199, its P/E ratio is only 5.85 for trailing 12 months earnings of $0.034. Still consider a steal in the stock market.

9 months earnings of Popular Holdings is at $0.0314. They are going to annouce their 4th quarter and full year results end June 2012. I am optimistic about their 4th quarter results and full year earnings ending 30th April 2012. The amount of dividend that they are going to give may be better than previous years.

In the past two months, I have also increase my position by another 6%. Hope you have got yours too.

Happy investing.

Disclaimer: All the information here is blogger's personal views. It should not be taken as a call to buy or sell the shares. Investors are advised to exercise their own discretion when it comes to buying of shares, as all kinds of investments carry risks.

Disclosure: Blogger has Popular Holdings shares.


  1. Hi Jac,

    With the market concerns and the uncertainty of when prices will bottom out, would you say now (May-June) is the time to buy when there is fear out there? In other words, is there going to be more fear in the coming months?

    Any more robust way of determining the above, besides the use of subjective gut feel, which varies widely and may not be accurate?

    Thank you.

  2. Hi MJ,

    Thank you for putting up a comment here.

    As an investor, I buy business, not noise. Any price below our own strike (buy) price is consider a good buy. Whether there are more fear in the coming months, I do not know, and I think no one else can predict. Yes, I have bought more shares during the fearful May-June. However, I do not invest all I have. If prices drop further due to more FEAR, then I will be a happy man as I will be able to gather more shares at a lower price.

    When investing, we are already taking risks. Novice investors must invest only the amount of money they are willing to lose. However, investors must also do their research of the company carefully before jumping into the wagon.

    I have been following only a few companies, 8 at most, and track their daily closing price. I access my trading account, not to track their daily movement, but to check if that particular day is my lucky day to buy more shares.

    When I started to buy Popular shares, I did not just buy blindly. It took me several months to look into their annual reports, did my calculations, following the news, and going to their bookstores and properties to take a look. Only when I feel that it's comfortable, then I put in my first wave of savings into it. Every half a year, I received dividends which is about 6% yield. Then I reinvest the dividends into the company by buying more shares in the stock market.

    Worrying about short term is good, but it's better to look at the company in business point of view. Sometimes, noises out there do not link to the company at all. Imagine that speculators are exiting selling shares of the company due to some bad news that is not related to the company at all. Wouldn't this be another good chance to acquire more shares?

    Hope you find this useful.