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Trading PPX: A Falling Angel

Discussion in 'Shares' started by wdongli, 14th May, 2011.

  1. wdongli

    wdongli Well-Known Member

    Joined:
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    [​IMG]

    FNArena

    Few Friends Left For PaperlinX
    FNArena News - April 19 2011

    - PaperlinX removed from S&P/ASX200 index
    - Institutional investors less likely to look at the stock
    - Morningstar retains Avoid rating, expects tough conditions to continue

    1. In the March quarterly re-balancing of the S&P/ASX200 index, PaperlinX (PPX) was removed from the index. Its market capitalisation at present of around $200 million was no longer justifies inclusion.

    2. The index removal makes PaperlinX an even more unattractive investment, as not only operates the company in an unattractive industry, but there are now even fewer institutional investors able or willing to invest in the stock.

    3. While PaperlinX offers leverage to the European and North American economies, Its earnings are unlikely to recover until both of these economies deliver sustained recoveries. Earnings improvement will also require an improvement in paper volumes.

    4. A modest improvement in earnings in the second half of FY11, but with market conditions still difficult a breakeven net profit after tax result is forecast for FY11 as a whole.

    5. PaperlinX is to reflect some reductions to long-term estimates and a higher cost of equity. The result is earnings per share estimates (EPS) of 0.0c this year and 1.4c in FY12. FNArena estimated earnings per share is 1.0c and 4.1c respectively.

    ***
    There were reduction in valuation for PaperlinX to $0.38 from $0.48 previously. PaperlinX was rated as Avoid by some analysts.

    The Buy ratings reflect expectations of price and margin improvements as conditions improve in PaperlinX's markets. But some analysts suggest that conditions remain difficult for PPX and any fix in terms of sustainable earnings improvement is likely to take more time.

    Shares in PaperlinX were trading down 0.5c at $0.205 in a market that is trading deep in the red. Over the past year PaperlinX has traded in a range of $0.32 to $0.84.

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    (wdongli) Before 1st July, 2011, after DOW has been in upward for months with the risk to correct in the coming weeks, XAO is coming into its selling season, market sentiment here is extremely nervous, and high inflation expectation and high Australia dollar is in sight, PPX could be down further before being stabilized.

    Could it drop down lower than $0.10?
     
  2. Tropo

    Tropo Well-Known Member

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    A brief story of... :D
     

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  3. wdongli

    wdongli Well-Known Member

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    Haha tropo, I like the picture very much. When some new things, good or bad, happen, we are confused and react to. Most of the believers or discommenders just really believe or disbelieve but actually don't know anything better than others. We are too easy to believe or not to believe.

    I try to learn how to know the fallen angels which had the glories in the past and is being deserted by the market as a whole. I hope I could play them for discount to value someday later. Falling could lead us to the bargain shops or hells in the market.

    Do wonder whether or not it is possible that

    1. I could use the falling as the clues to find a bargain shop and

    2. all the fallen angels in this shop would not be died or hurt anyone anymore!
     
    Last edited by a moderator: 14th May, 2011
  4. Tropo

    Tropo Well-Known Member

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    Beat The Dealer by Edward O Thorp - Beat The Dealer Blackjack Book Review
     
  5. wdongli

    wdongli Well-Known Member

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    Yes, in the market, most of market players try to beat the dealer, Mr. Market, which is wrong logically since when you do so, you are sort of gamblers. You may beat the dealers in Black Jack probably but you could lose your shirts or even value of life. In the market we don's need to be gamblers even we use some skills to solve the similar paradox when to hold'em or unfold'em.

    Why don't you open a little Casino Shop in the market by copying the rules and calculations for a sure winning probabilities which have been used and developed in thousands of years in human history and using them based on the dynamics of market environments? It is sure if you could do so, you would be quite safe since no one really want to beat you down and your shop could not cause competition problems to Mr. Market too.

    ***
    Too many so-called system operators in the market could not make the basic right and then once Mr. Market becomes very disappointed these system operators are dragged onto the slaughter tables in crying or regretting as I did in IT bust. Could we identify the piled of gold and then just comfortably go to it and pick it back to home? I could not now but it is a good dream if we really need the dreams.

    Yes, it is definitely not easy since we like to go to Casino for quick money instinctively but if you want to be a winners in the market under any market environments for your market life, you don't have other choice but update your mind as an owners of the Casinos.

    ***
    You have to be a business man who know his business in best and could have the base-case NAT, the capital you could put into the market, the EPV to make some money for your milk and butter at least, the franchise value to protect your NAT and Earning power, and the growth value since you are a great business man.

    The most important question is who you are! If you have a great mind, no money you could get the money from the market by borrowing a little bit first as your initial capital; having some money, you could leverage it to the height others could not reach for more; having the first bucket of gold, you could find the people who are excellent to get very good growth rate for your market playing business!

    ***
    I am not good and then I lost my shirt in IT bust, geared into geared funds in wrong time, and then still in struggle for a better mind. But if we are logically and basically right we could drive us to what we could reach even we are inherently the bums perhaps.

    Some of my friends wonder why I could read and ponder for nothing! I am trying to do the best I could in my life. In this sense I really feel "life is god and really good."

    LOL!
     
    Last edited by a moderator: 14th May, 2011