Notion Vtec

Notion Vtec is one of my very first stock which I started to accumulate since Nov 2009. Until now, it is still the heaviest load in my portfolio. Many people have unload this stock since it reached the historical height of 3.52, the heat from private placement of Nikon seem faded. Is it still worthy to hold and buy in more Notion Vtec at current price?

Looking at their financial statement, it seem to me that Notion still got more upside. If based on their past 5 years financial results, notion recorded a Revenue CAGR of 16.82%, Gross profit CAGR of 18.10% and Net profit CAGR of 21.97%. I guess you cant find much company to have such outstanding growth in Bursa at the moment (if you do, please inform me).

They also have a very high profit margin of above 20% for the pass few years which is higher than their HDD peers listed in KLSE like JCY(11%) and Dufu(8-10%). The reason behind this mainly contribute by their camera division which have a much higher margin than HDD manufacturing.

Notion average Capital expenditure/net profit also stand at a comfortable 62.8% compare to their bigger peer, JCY at 76%. This mean less money needed to maintain or upgrade the equipments, resulting in min 40% increase in retain earning and min 20% increase in ROE for the pass few years.

The past record seem good enough, how about the future?

1) The new 2.5' HDD base plate for Samsung is the catalyst to growth, which could provides additional 46m in rev and13m gross earning, full capacity estimated at Jun 2010 with high possibility of increase order from samsung.

2) Proven ability to produce 2.5' base plate could attract more customer, especially their existing clients like WD and Seagate. Currently, Notion is in talks with potential client Alphana Tech to supply 2.5' base plate.

3) Continental also discussing a new packages with Notion. If succeed, this could be a boost to their automotive division.

4)For their camera division, the real deal behind private placement from Nikon doenst stop here. I believe Nikon will order additional camera parts and possible sub-assemblies for Notion in near future.

With this wonderful past record and promising growth catalysts mentioned above, I dont see any reason for me to sell my stack on Notion at the moment.

My Portfolio

As of today, I am holding three stocks which is Notion Vtec Berhad, Haio Enterprise Berhad and Success Transformer Berhad.

Investing in Bursa

6 months ago, I decided to use part of my saving to invest in stock market. My initial investment capital was around 10k, just like many other newbie noob investors, I use the capital to buy stocks based on rumours and recommendation from blog/forum without doing any homework. Fortunately, my first few selection gave me a good return. Much better than the unit trust I bought since early of 2009. Confident with my strategy in stock investment, I transfered all my unit trust fund into stock market. During the first 2 months, I was able to make some decent profit from stocks recommended by others. However, not every stocks give me a good return. Some I have to cut lost in order to minimize the damage. At the end of the day, I lost almost all the profit I gain previously.

Well, 2 months of "hard work" without gaining anything. I start to analyze and found out few thing that I need to avoid or improve,

1) Buy on rumour/goreng stock - people can alway rumour about how good this company gona be and when big shark gona goreng . But how many percent are true. Most of the time you just see the stock price going down into drain. Even if you are lucky to strike one that the price shooting up, but u never know when is the peak. Cause this kind of goreng stock will only hike for few days then drop bk to your buying price very fast.

2) Patience - This is something I am lack of. I alway lost my patience and sell the stock if it didnt move for few days. By the time I sell the stock and switch to other counter, the price shoot up to no where and what I can do is just blaming myself. Even though I tell myself not to repeat the same thing, but everytime I see other counter shooting up like rocket while my counter still stagnant, I will lost my patience and do something irrational: like buying speculative stocks(hoping to earn big profit within days just to compensate the "lost" for not buying the sky-rocket stock i "suppose" to buy)

3) Greed - Biggest enemy for all investor. When greed come, it can kill my patience and convince me on the reliability of the rumour. End up doing something stupid.

Beside this, I also start reading investment books and stocks analysis by bloggers to improve my knowledge on stock investing. Between TA and FA, I have choose FA as my primary analysis for stock selection. Since then , I have did fundamental analysis for some stocks listed in Bursa. Hope to find Gem Stone that could bring me a great fortune.