Bonus Share from Solution Engineering Sdn. Bhd.

A week ago, Solution Engineering issued bonus share and warrant for its shareholders. Since then, I have come across various terms and I took the effort to find out more about them.

Bonus Share
Instead of giving out dividend to its shareholders, some companies opt to issue bonus share as another form of incentives for their loyal shareholders. There are good and bad for shareholder receiving bonus share instead of dividend which could be more practical. Based on my finding, bonus share is issue after the company has gathered enough reserves (dividend which was not paid to shareholders) over the years and transfer them to company's capital. Issuing bonus share will adjust the market price for the share and thus drives volatility, making the share seems to be more affordable and attract more investors.

The following are some articles I have read about bonus share:
why-are-bonus-shares-issued-and-what-are-their-advantages 
bonus-issues-stock-markets

Besides bonus share, Solution Engineering issued bonus warrant for its shareholders. Actually, for this part, I have mixed feeling on this because unlike share, warrant has an expiry date. Well, the expiry date is 5 years from now. I will have to monitor closely to decide if I want to sell them when the price is right, or convert them into regular share.

Ex-Date
This is the cut-off date for which shareholders entitle to get the bonus share. Let's take Solution Engineering as example, the Ex-Date for the bonus issue is 24-Jun-2016 (Friday), which means anyone who holds 0093 until the market closed on 24-Jun, 5:00 PM is entitled to receive bonus issue.

Entitlement Date
This is another date that we should know, but not as important as Ex-date. Entitlement date is the date when shareholders are eligible to get the bonus issue. Malaysia exercise T+3 days, meaning any transaction made on T date, will reflect on Central Depository System (CDS) 3 days after. After T+3, Company Registrar will calculate your entitled bonus based on the record in CDS.

The following is a post from a blogger who explains Ex-Date and Entitlement Date in a very detail way.
鸟样股票: EX-date （除权日）和Entitlement date （可获得股息权力之日）

5/2016 - The art of stock trading

Why do I call it an art? In my opinion, art is a subject hard to be understood by amateur. It is a subject no common crowd will understand what’s the abstract message the artist was trying to deliver and why does the art piece cost so much. If I put that perspective into stock trading, both matters seem to be quite similar. When trading, an amateur does not know when is the best time to buy-in and when is the best time to sell. Of course, this decision-making skill will develop based on experience over the time.

In this article, I would like to share something about my trading history. As I have mentioned in my previous posts (4/2016), I have observed Solution Engineering Holding (0093) for some time but I did not take any action until recently. I had missed the boat, I made wrong decisions in trading it, and I traded it at a wrong timing. Let’s take a look at the chart.

As you can see from the chart, the stock price has been moving side-way and its value had been lingering around RM0.40 for the past week. The RM0.40 resistant was strong and it closed at RM0.40 last Friday. But when the market opened yesterday(18-Jan-16), it opened at RM0.39 and broke through the resistance. The lowest price of the day was RM0.375 but it managed to raise back up and closed at RM0.39. Today was the same, it dipped for several cents before climbed back up to form a new resistance at RM0.39.

I bought-in last week at a slightly higher price. Well, the difference was not that big (yet) but I lost the satisfaction in making good judgement and lost the best deal. So, in this case, experience calls and good judgement is needed as well as being patience. In stock trading, no one knows for sure how the market works in a short time frame. That is why I call it an art.

There is still some space for improvement to polish my patience, my decision-making skill and knowing how to speculate market sentiment correctly. I will put more time and effort into trading activities to make sure there will be some improvement.

4/2016 - Assessment on Solution Engineering Holding

I have been checking on this counter for several months and I must say Solution Engineering Holding (0093) have had quite a good record on its financial status. I may not be a pro in investing yet but looking at some indicators, the performance is quite promising.

1. Debt and equity ratio (D/E) is 0.03. This indicates that Solution has RM0.03 debt for every RM1 of equity it owns. 
2. The current ratio (CR) is 4.03. It means the ability of Solution to repay its debt is 4 times of its current debt. 
3. It reported positive EPS of RM0.074 last quarter. In fact, its result for the past several quarters are good. 

Based on what I have learned recently, I learned to look for stock which has higher earning compared to the previous quarter (or at least reasonable amount), D/E lower than 0.5, CR higher than 1.5 and acceptable price over earning ratio (P/E). Out of 4 indicators, Solution meets two of them. As for the EPS part, Solution's 2015Q3 EPS was not as good as 2015Q2 but it is acceptable. And, last for but least, it's P/E is acceptable, too. I have not compared its P/E with other company of similar industry yet, but I still think it has the potentials.

Let's keep an eye on this counter and see how it performed on last quarter of 2015 and upcoming 2016.

PS: Please do your homework before making any trading decision.