A short review post 2Q earnings reports
Getting ready for more company visits and a few comments post the 2Q earnings reports.
Next week I will be visiting in person with QLT (4.26), TTCL (4.46), UKEM (0.59) and SPPT (2.46). Of course, as reviewed recently, I like others as well, like DEMCO which should have a great recovery year 2010, as their wind project is far bigger then I first understood it to be. TRT gests a strong buy view here, this on any price pull back! CRANE is the hidden value story, which the Thai retail investors have yawned on so far. LVT is the high earnings company but as I put on my front page now:
"Yes, this wild Mr. Nielsen and LVT, as I said it all remains an enigma to me. One would think, of besides having the pride of a good functioning and well earning company one would also have the pride of a good share value, but alas the latter doesn't seem the case with good ole Mr. Nielsen". A seasoned member comment.
Subject to these visits and my impressions/reviews after, all 4 are on my buy view list, on the current market correction. I have lots of conviction already on UKEM, SPPT and TTCL. QLT is a new company I initially like, based on the usual qualifiers of too low valuation, high growth, decent dividend & balance sheet -and in a desirable industry. QLT is a recent IPO so there is lots of information available. Meeting managements of companies allows me to understand their business better, get an impression on the people running it and establish a senior contact at the company.
As always, members should let me know if they have any questions they want me to ask, when visiting these companies.
I usually tell companies I visit that I operate under the international standard, which is straight forward and direct -and that if I get mislead or misinformed, despite my good effort and tolerance to proper understanding, I will point this out at my web site as I have in the past. Usually I go with a broker analyst, sometimes I go alone. If interesting and I get the permission, I try to take some pictures, but this does not always work out.
My own take is that the current correction will not last long, or be very deep, and so members should take advantage of it. The 2010 economic recovery seems entrenched and absent any unforeseen major set backs, next years’ global and Thai recovery will start translating into still higher stock prices this year.
The first stage of such a broad SET recovery is always in larger cap stocks, and its one reason why I weighted in some large cap picks in my last published portfolio. As the correction moves on, our chosen smaller cap stocks should hold up better for the simple reason that they did not move up much, on average, so far. The key will be an analysis of all 2 Q. earnings, which I think the MAI will soon publish. It may turn out that the average MAI company has not recovery earnings wise as fast as many of the big cap oil and petrochemical stocks which dominate the SET. If this is the case, the MAI lagging is somewhat warranted.
If this is not really the case, then the average MAI stock is loosing ground and it may be due to some of the other reasons I point out with my direct letter to the MAI president, published here as the previous article. Let’s wait and see how K. Chanitr addresses this in the press and when I meet him next week. The key to watch out for is how MAI average 2Q earnings performed, overall. 
Its always more a market of stocks then a stock market, and even with the MAI lagging this year I think members did well with my large cap picks and a minority of the smaller cap picks. TRC has been a clear disappointment this year due to sagging earnings. I wish management would have warned us a bit on the poor 2Q. upcoming results.
We keep being told that the future is bright at TRC and I like the management and industry, so am keeping with it and still remain my “buy view” there.
To contrast, TRT a MAI stock which I chose/reviewed a few weeks ago for you, after a great visit, beat the SET and MAI index since....TRT 2Q earnings were impressive as was the 1Q., vs. LVT which was strong compared to the same period last year, but a bit disappointing when you compare to the just previous period (3 and 6 months). No interim dividends and no warrants was a disappointment, considering what management stated to us in recent months.
Best Regards,
Paul A. Renaud
