April 2012

ScIoN Fund (mid-long term)

YTD:  +21.43%

Benchmark: +18.3%

Much of this month's gains came from the liquidation of TA upon touching the 200MA @1.21.  TA remains to be an undervalued stock; however, there is still the SRO overhang which discourages some investors to go in, at least until ex-date.  We remain bullish with MARC for its Nickel trades; especially since Indonesia has started banning their Nickel exports.

BDO has also been let go after its SRO announcement.  Prices plummeted the day after the announcement, as stockholders would need to lighten their BDO shares if they still want to maintain the same exposure.

FDC enjoyed some push coming from its subsidiary's IPO (East West Bank).  The stock's price went up as high as 5.19, or +10.66% from last month's close.  We shall wait for further price action when EWB would finally go public this May after being oversubscribed 3x.

PAX is a bit of a disappointment since we are having paper losses from this stock.  Hopefully prices would pick up once again this May after waiting for disclosures regarding the supposed huge cash it got from selling of a subsidiary.

We now maintain cash close to 40% of the total portfolio.  It's summer season once again, and some believe in "Sell in May and go away".  Perhaps traders go into a vacation, leaving behind a low volume market susceptible to volatile prices with a selling bias.  It's high time for early leaders to take a breather; thus, an opportunity for a buy when prices dip.

AJC Fund (short term fund)

YTD (3 months):  +0.24%

Benchmark: +5.64%

This fund is still lagging behind since MPI (benchmark stock) continued its strong push.  Out of all the trades this month, only FDC provided a respectable gain, enough to offset some losses.  Largest allocation goes to PAX; however, the stock underperformed this month.  Its fundamentals remain to be strong, but has weak positive momentum.  Hopefully, the other stocks would compensate and help push next month's trading gains.

FDC Countermeasure

FDC broke my heart, but I still believe in the fundamentals of this stock.  The problem is that it has low float, thus can be easily abandoned by impatient short term traders.  As a consolation, at least I didn't put much yet on this stock and so there is still room to add for more, if I really choose this to be one of my core holdings. (Current core: AP and EDC).

Here is the 1 year chart where I may plan to buy more shares once an STS buy would be triggered.

Reasons why I still believe in this stock:
1.) Undervalued, with current P/E at 10x.
2.) Impending IPO for one of its earning subsidiaries: EastWest Banking.
3.) FDC plans for a 2PO but would not want to sell at current low prices.  This 2PO is needed in order to increase the company's float from less than 10% to about 33%.
4.) Intact earnings, with sugar having high prices this year.  (subsidiary: Pacific Sugar Holdings).