On last week, Japan crippling earthquake has led KLSE index to go down and test 1470 level for the 3rd time. And how the index is back to 1510 level. We just watched a drama by looking at the index goes up and down for the past 2 weeks.
Anyway, most of the big falls have come back by these few days. I hope you've get your money back by now? By looking at my portfolio, overall the small-cap prices have came back and blue chips remain stagnant. It's boring, isn't it?
Anyway, the stock analysts have started to promote rubber glove stocks again recently, due to the latex price has falls more than 20% from it's peak on last week. Even the latex price is rebounding and come back to -10% level, the rubber glove makers forecast that the latex price will gradually coming down and targeting it will be around RM5-6 level in the end of the year.
According to analysts, they are confident that the latex price will goes down due to 4 reasons below:
1) The wintering season for most rubber trees would be over soon.
2) The flooding in Thailand has eased as the weather improves.
3) The Japanese automotive industry is expected to slow down after the crippling earthquake.
4) More natural rubber latex would now be available since some rubber glove manufacturers have been switching to nitrile gloves.
Stock analysts also commented that the rubber glove stocks price are at their bottoms. It should be a good time now to start accumulate them.
If the latex price is going down, the USD exchange rate remain static, and all reasons above are true, it means the rubber glove makers can start to making big money again. If this is the case, I would be more than happy to buy them.
On the other hand, how reliable are these sources? How do we verify them? Can it be the plot that rubber glove makers want to boost up their share prices while analysts want to make us trade more? What other risks we have if we buy-in? Is rubber glove stock really reviving from the bottom?
I've too many questions in my mind for now. What do you think?
Posts
Hi
I do think longer term, good FA glove-stock like TopGlove will revive and doing well again. Irrespective of what those analysts are saying, that is speculative and short-term. Valuation is STILL not cheap at current level but we could start nibble on few : TopGlove, Supermax, Harta and Kossan. Even Adventa or Latexx will continue to be in news.
That is my opinion. I am currently accumulating TopGlove - down 50cents(BUY) and up 50cents(SELL).
Risk : USD weaknening.
TEH
Teh, I salute your opinion.
Rubber glove stocks like Topglov & Supermx prices have been ding-dong up and down for 3 times since Oct last year. Buy & sell on them at certain level should be a good strategy on them so far.
The risk of currency may be able to cover by the dropping of raw material cost.
Anyway, these glove makers will be able to increase their productions very soon, once their new factories are ready. Demand surplus supply would be the next risk?
Good luck.
Nice analysis, seems going on successful ways but need to focus on
quality to make it on going.
Thanks for sharing. I hope it will be helpful to many people that are searching for this topic. Keep posting guys and keep this forum a great place to learn things.
Protective gloves are a necessity in the medical profession. They protect both the staff and the patients from infectious diseases.
Seems very nice for many objectives but general problem is the grip when handed on. Hope so they works good.