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Straits Times 3,115.03 -11.06 -0.35%
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Top Trading Ideas For The Week
Tradeable, Tradeable Ideas | 27 August 2014
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By: Tradeable
Articles (256)

With US markets poised to test its ceilings again, the Straits Times Index appears to be heading for another week of gains as well.

In this largely appreciating environment, is there any particular stocks traders or investors can look at? We look at the top 3 most read trading ideas this week and give our two cents!

1. Acquisitions To Boost Upcoming Q&M Financials

  1. Q&M’s two acquisitions (Aoxin and Qianhuangdao Aidite) are expected to help bolster its profits in 2H14 and even more in FY15.
  2. After acquiring Aoxin (which owns three dental hospitals), Q&M intends to acquire more dental hospitals in China.
  3. Q&M’s acquisition of Qinhuangdao Aidite will enable it to move further upstream in the provision of dental prosthetics.

Read More>>

What we think: Indeed, Q&M Dental has been quite well-liked by Maybank Kim Eng since it initiated cover back in 2013. Its recent acquisition spree has also given the stock some impetus to outperform the market. As can be seen in the graph below, the counter has solidified its appreciation since the beginning of the year, going from strength to strength.

Q&M's share price chart

However, the question remains, is there further room for appreciation? The stock appears to be trading sideways at the moment and in the very short term (within the next few days), I expect the stock to have a healthy correction with resistance levels at about $0.45. This healthy correction should give it some space to remount an offensive on its resistance level of $0.50.

It is therefore my opinion that although Q&M represents a growth story that investors might want to take advantage of, they would want to wait on the sidelines until the stock corrects to a more favourable price.

2. ARA Management: Positive Fundamentals Signals Value

  1. ARA Asset Management’s long term EPS growth (20.7 percent) and CAGR of about 10 percent sets the case for the fundamental positive of the firm.
  2. Revenue is also rising consistently over the past five years.
  3. The stock is expected to retest the $1.97 level. Should it be able to break that level, the price could hit newer highs.

Read More>>

What we think: The assessment of ARA Asset Management looks pretty good as not only do were agree with the writer, several analysts from the street agrees with him too. While the technical aspect can be challenged, the counter displays a good fundamental stock to invest in.


Source: FactSet, analysts' calls on ARA Asset Management

3. My Gut Feel On RH Petrogas

  1. Author’s gut feel that RH Petrogas will run with its Bollinger Band and subsequently experience an increase in volume.
  2. Targets set at $0.90 with cut loss at around $0.70.

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What we think: Recently, RH Petrogas released its 1H14 earnings report card which showed that it had returned to profits in 2Q14. This was largely due to write-offs of unsuccessful exploration and evaluation expenditures in 2Q13.

Source: RH Petrogas; comapny's asset profile

With its assets in China, Fuyu 1 not being tapped yet, we are of the view that RH Petrogas could present potential value being unlocked when the asset is ultimately developed.

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Q&M Dental Group (S'pore)  0.485 +0.010 +2.11%   
Business: Co is a private dental healthcare provider in Asia. [FY18 Turnover] Primary healthcare (93.1%), dental equipment & supplies distribution (6.9%)

Insight: May-19, 1Q19 total revenue inched up 4.2% to $29.9... Read More
RH Petrogas  -- -- --   
Business: Exploration, devt & pdtn of oil & gas resources.

Insight: May-19, 1Q19 revenue fell 28.3% to US$13.2m due to... Read More

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The Shares Investment editorial team welcomes constructive feedback on our coverage and content. We would also be delighted to answer any questions on the above article. Leave us a comment below, and we'll get back to you shortly!

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