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Sri Lanka Equity Forum » Stock Market Talk » CALF doubled price genuine?

CALF doubled price genuine?

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1 CALF doubled price genuine? on Mon May 14, 2018 8:38 pm

lakshanbandara

avatar
Stock Analytic
Stock Analytic
CALF rights issue 559:309 at Rs. 23.30

Current Price: Rs. 62.10
Feb-26 Price: Rs. 25
May-02 Price: Rs. 40

In few (3) months, price doubled.
Is this price manipulation or are there genuine reasons for doubling the price?
If it is manipulation targeting at rights issue, there will be a sudden huge drop in price after XDate.
Need expert advice ASAP before investing.

Thank you.

2 Re: CALF doubled price genuine? on Mon May 14, 2018 9:39 pm

hirankb

avatar
Senior Equity Analytic
Senior Equity Analytic
Fundamentals
FY17/18 PAT    -33 mn (loss)
PBV                 6.30   (against a sector PBV of .98)
ROE                 -7.30   ( against a sector ROE of >10)
PER                  -88 x (against a sector PER of 5.75)

technicals
RSI                   77  ( highly over bought)
CMF                  only .15 after years in  negative territory and even after a 600% price gain
OBV                  not following price move but diverging , now nose diving.

Rights ratio        3 for 5 . and that is approx 40% delusion. 

 
Current YOY average volume with a 600% upward price move almost equal to previous YOY average volume with near 0% price move. This is a clear indication the 600% price move during last 12 months was almost totally in-breeding and no new cashflow has come in as indicated by poor CMF reading. 

Unless the company has a mother load of gold stashed off-balance sheet or some politician/s is/are trying to launder their looted money , their is no indication this bullish sentiment is genuine.  

This company is in deep water looking for a life jacket. Pls see if there is any announcements indicating directors buying which I doubt. May be some investor is trying to buy this entity for it's licence. . My forecast is a price  around 35/= after X-rights date and 12/= to 15/= by 3 months after . If you realy want to invest in this sector at this point in time  , why don't you look at COCR. In any case ASI/S&P will only start to move when the CBSL will either shrink the Policy rate corridor further or loosen monetary policy by reducing  AWPLR .Newtons laws of Motion is some what applicable to capital markets as well when big moves are made . When price moves are microscopic , then Schrodinger's wave function and Heisenberg's uncertainty principle are more likely to apply in an abstract form at least Very Happy . This advice given without prejudice. Use your value judgment and make your move. 

If you ask me , I would rather extract my prostrate gland with a fork than buy this stock. 

Remember , if something is too good to be true it usually is.

Even with all this crap, I could be proven wrong as past performance is not a guarantee of future performance.  

Good luck with your investing.

3 Re: CALF doubled price genuine? on Tue May 15, 2018 6:35 pm

lakshanbandara

avatar
Stock Analytic
Stock Analytic
@hirankb wrote:Fundamentals
FY17/18 PAT    -33 mn (loss)
PBV                 6.30   (against a sector PBV of .98)
ROE                 -7.30   ( against a sector ROE of >10)
PER                  -88 x (against a sector PER of 5.75)

technicals
RSI                   77  ( highly over bought)
CMF                  only .15 after years in  negative territory and even after a 600% price gain
OBV                  not following price move but diverging , now nose diving.

Rights ratio        3 for 5 . and that is approx 40% delusion. 

 
Current YOY average volume with a 600% upward price move almost equal to previous YOY average volume with near 0% price move. This is a clear indication the 600% price move during last 12 months was almost totally in-breeding and no new cashflow has come in as indicated by poor CMF reading. 

Unless the company has a mother load of gold stashed off-balance sheet or some politician/s is/are trying to launder their looted money , their is no indication this bullish sentiment is genuine.  

This company is in deep water looking for a life jacket. Pls see if there is any announcements indicating directors buying which I doubt. May be some investor is trying to buy this entity for it's licence. . My forecast is a price  around 35/= after X-rights date and 12/= to 15/= by 3 months after . If you realy want to invest in this sector at this point in time  , why don't you look at COCR. In any case ASI/S&P will only start to move when the CBSL will either shrink the Policy rate corridor further or loosen monetary policy by reducing  AWPLR .Newtons laws of Motion is some what applicable to capital markets as well when big moves are made . When price moves are microscopic , then Schrodinger's wave function and Heisenberg's uncertainty principle are more likely to apply in an abstract form at least Very Happy . This advice given without prejudice. Use your value judgment and make your move. 

If you ask me , I would rather extract my prostrate gland with a fork than buy this stock. 

Remember , if something is too good to be true it usually is.

Even with all this crap, I could be proven wrong as past performance is not a guarantee of future performance.  

Good luck with your investing.


Thank you for the detailed answer.

I also noticed a similar situation (Rights Issue & Price doubled in few months) with SHL.

SHL pricing seems to be fine.

Stock Prices:

Jan 29 - Rs 12.90

Mar 16 - Rs 24.30 (Announced)

Mar 27 - Rs 21.50 (XDate)

Apr 12 - Rs 21.30

May 15 - Rs 21.90

How do you compare CALF to SHL?

Open for all to comment...
Thank you.

4 Re: CALF doubled price genuine? on Wed May 16, 2018 9:24 am

hirankb

avatar
Senior Equity Analytic
Senior Equity Analytic
Highly speculative counter. neither the fundamentals or technicals indicate any inherent driver for this doubling in price after reporting huge reduction in net profits. May be the rise is due to the possibility of SHL is eyed by a foreign investor. If you intend short term trades at considerable risk .. yes go ahead this is better than CALF. Any inside information is already reflected in price. With a ROE of only 0.8% , the shareholders are better off by getting dividend than passing 80% of profits to retained earnings which earns only at a rate of .8% . The ROE has to be higher than AWPLR , by at least by 4% to even trigger your interest as an investor. But if you intend day-trading, then keep your ear to the ground by going to the brokers trading area to seek the market gossip and earn a couple of bucks a day if you are lucky.

5 Re: CALF doubled price genuine? on Wed May 16, 2018 9:14 pm

gdid


Equity Analytic
Equity Analytic
Yes in SHL case there was a private placement & a right issue. both were at price 17 that was the reason behind SHL. when come to CALF what I see is the Dialog. they are holding around 98.8% of shares in CALF after mandatory offer. so public float is around 1.2%. & Dialog initially paid 28.70/- per share. now the right issue is offer 23.30/- demand went up & due to limited supply share went up and up.

About financial yes there is a huge loss showing in there statement BUT if you go detail you will see the main reason for loss is Impairment loss. check segments main loss sectors are Factoring segment & treasury segment. There cash flow is positive this time.
After all my view is risk is too high but with Dialog & there ability to new innovations this share have expectations.

This is just my view & not a recommendation. comments are always welcome from everyone

6 Re: CALF doubled price genuine? on Thu May 17, 2018 4:13 pm

DS Wijesinghe


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
NAVPS is just Rs. 8/91 and trading at Rs. 61/- ???
One needs to be extremely brave and make a huge gamble to buy this stock @ 61/- when it’s NAVPS is just Rs. 8/91 and the company is making huge losses.
I am not saying Dialog is incapable of Turing around CALF. They can very well route some of their Group financial business requirements through CALF to turnaround the. Company. Then we need to ask ourselves why couldn’t their former owner Cargills failed to do so? It could be because they had the Bank to do so and it would be difficult to run 2 profitable financial institutions under the same group in today’s macro economic conditions.
In my opinion it is prudent to wait and see until Dialog turns around the company.

7 Re: CALF doubled price genuine? on Fri May 25, 2018 1:15 pm

Nethu


Stock Analytic
Stock Analytic
whats going with CALF...?

8 Re: CALF doubled price genuine? on Sat May 26, 2018 5:07 am

lakshanbandara

avatar
Stock Analytic
Stock Analytic
@hirankb wrote:Highly speculative counter. neither the fundamentals or technicals indicate any inherent driver for this doubling in price after reporting huge reduction in net profits. May be the rise is due to the possibility of SHL is eyed by a foreign investor. If you intend short term trades at considerable risk .. yes go ahead this is better than CALF. Any inside information is already reflected in price. With a ROE of only 0.8% , the shareholders are better off by getting dividend than passing 80% of profits to retained earnings which earns only at a rate of .8% . The ROE has to be higher than AWPLR , by at least by 4% to even trigger your interest as an investor. But if you intend day-trading, then keep your ear to the ground by going to the brokers trading area to seek the market gossip and earn a couple of bucks a day if you are lucky.

On 25-May-2018 (yesterday) 5 pm the Colombo Trust Finance PLC (CALF) - EGM held at Sri Lanka Foundation Institute.

I asked the following question from the chairman:

"
CALF share price more than doubled in 3 months.

Feb 26th Price Rs 25
May 25th Price Rs 67

It's too good to be true.

On the other end,
1. company made loss at the P&L

2. Price to Book ratio is greater than 6, but should be less than 1

Mr. chairman, in your openion
What are the valid reasons (value additions) other than rights issue for this unusual trend in share price?
"

The answers I received from Chairman and Audience were:
"
1. They had no control (no manipulations) over share price.

2. Less shares and buying pressure may have created this unusual trend

3. Share holders may have trusted Dialog as the backing company
"

My concern is:
If no value additions to the share influenced to double it's price, after XDate of the rights issue, the market will correct itself and share holders will have to unload their stock before such corrections to avoid considerable losses.

In that note, with consideration I did not buy CALF shares targeting at the attractive rights issue.

9 CALF on Mon May 28, 2018 9:32 am

Ranga_17


Stock Trader
With my short analysis CALF has a back up company which is Dialog. Someone buys this share because of Dialog exempt that there is no reason to buy this share in the market. Thus the company share will reduce to previous price limit after right issue some time less than Rs. 20. If you invest in short term this not a your investment.  Surprised

10 Re: CALF doubled price genuine? on Mon May 28, 2018 12:22 pm

lakshanbandara

avatar
Stock Analytic
Stock Analytic
@Ranga_17 wrote:With my short analysis CALF has a back up company which is Dialog. Someone buys this share because of Dialog exempt that there is no reason to buy this share in the market. Thus the company share will reduce to previous price limit after right issue some time less than Rs. 20. If you invest in short term this not a your investment.  Surprised

I too agree with you.

But, today (after ex-rights date 26-May-2018), the market price is around Rs 45 to Rs 54.

In my calculations, selling price (to break-even with 14% FD in 3 months after 1.12% cost) should be Rs. 50.60 (Buying price averaged to Rs 48.30).

Why the market takes time to correct itself?

11 Re: CALF doubled price genuine? on Mon May 28, 2018 8:12 pm

Ranga_17


Stock Trader
Today CALF closing price is near Rs. 50 and no bids when closed the market. And most of buyers ask high price, the price will definitely go down on next couple of week. On other hand this share has less liquidity in the market because Dialog has captured near 99% of shares of the company as well as only 1% trading in the market which means share has less attraction for the public. Thus someone who buy this share who could not sell quickly in the market and high risk for price down of the share.

12 Re: CALF doubled price genuine? on Mon Jun 04, 2018 5:56 pm

Nethu


Stock Analytic
Stock Analytic
why is the sudden interest for CALF.. Will it move up further..?

13 Re: CALF doubled price genuine? on Wed Jun 06, 2018 11:16 am

Nethu


Stock Analytic
Stock Analytic
CALF GOING UP... HUGE BUYING.. IS THIS GOING UP FURTHER....? EXPERTS PLZ COMMENT...

14 Re: CALF doubled price genuine? on Wed Jun 06, 2018 11:19 pm

Namal


Senior Equity Analytic
Senior Equity Analytic
Highly illiquid share.. someone coloct around 50-53 level... Most of minority shareholders sell there shares at this level.... MAY GO UP..

15 Re: CALF doubled price genuine? on Thu Jun 07, 2018 6:14 pm

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@Namal wrote:Highly illiquid share.. someone coloct around 50-53 level... Most of minority shareholders sell there shares at this level.... MAY GO UP..
Due to ongoing Rights my advice is avoid this share.

16 Re: CALF doubled price genuine? on Thu Jun 07, 2018 8:23 pm

Namal


Senior Equity Analytic
Senior Equity Analytic
someone plays a dirty game on this share...

17 CALF @ 23.30+ on Fri Jun 08, 2018 10:12 am

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@Namal wrote:someone plays a dirty game on this share...
If you like to buy CALF wait till Rights falls below 1/= and buy rights and convert by paying 23.30 + lol!

18 Re: CALF doubled price genuine? on Mon Jun 11, 2018 9:06 pm

Nethu


Stock Analytic
Stock Analytic
today right price went up to 24.9.

19 Re: CALF doubled price genuine? on Mon Jun 11, 2018 9:27 pm

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@Nethu wrote:today right price went up to 24.9.
Rare to see a Rights going up.......... Most of the time last day it will trade below 1/=

309Rights for 559 @ 23.30 +

lets wait till 14th and see Question

20 Re: CALF doubled price genuine? on Wed Jun 13, 2018 10:25 am

Nethu


Stock Analytic
Stock Analytic
no buying interest for rights and even share. less than 1000 shares buying in normal share.. is it worth to sell rights in even above 10.. experts plz explan..

21 Re: CALF doubled price genuine? on Wed Jun 13, 2018 10:47 am

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@Nethu wrote:no buying interest for rights and even share. less than 1000 shares buying in normal share.. is it worth to sell rights in even above 10.. experts plz explan..
Unless you are willing to pay 23.30 and convert Rights you need to sell. On 14th, tomorrow Rights might fall less than Rs1/=. Afters rights renunciation price will further drop.

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