Stock Analysis: AIRASIA 5099 as of date 13th Nov 2016 (UTC+8:00)

- - - created on 13th Dec 2016 (UTC+8:00) - - -

AIRASIA 5099 BUY, SELL, or HOLD?

STRENGTHS

Lead by a capable leader, Tony Fernando with great mindset
A company need a great management team. And a great management team need a capable leader. I believe Tony Fernando who been ranked as one of the most influential people in the world (see link), can continue to bring AirAsia to next level.

Being largest Low Cost Carrier Asia for 13 years
No matter what are the risks that I am sharing below, do not forget that AirAsia has been a Low Cost Carrier in Asia for more than 10 years. This business preposition will not be easily replaced by others, especially with a great leader as Tony Fernando. Nevertheless, Tony definitely will have to come out with a greater plan and direction to keep their advantage in market in the future.

RISKS 

MARS will rise as local competitor
Malaysia Airlines (MARS) has experienced a serious crisis back in year 2014 caused them delisted from Bursa Malaysia Main Board and undergo restructuring. This year 2016, you able to start seeing news from MARS, where they start to gain market share (see link). I believe soon, AirAsia market share will be diluted by MARS. Even not soon, but definitely will.

America Airline will be potential global competitor
Warren Buffet, which is well know as the god of investment has recently invested in America Airline, which are American Airlines, Delta Airlines, and United Continential Holding Inc (see link). This will give a great boost to airline business and dilute AirAsia's market share in West. People might think, well, AirAsia is strong in Low Cost Carrier, not a direct competitor. But do not forget, now America has their own oil producing capability, which will give a great advantage to their native airline business, as the fuel is the most important operating cost. This means America Airlines will able to provide great services with more competitve price to their customers.

Airasia earning will be affected by petrol price hike
Tony Fernando himself did said that fuel is the most important operating cost to airline business. As the OPEC and many non-OPEC players are starting to cut down their production amount, the oil price has the trend of increasing (see link). This will definitely affect the earning margin of AirAsia in near future.


RECOMMANDATION

Short & Medium Term Investor
Overall, I find that AirAsia is still a great potential stock, just that, by looking at the current market, I believe RM 3.00 is the top it can goes now. So to maximize your profit, my recommandation will be sell it and enter again when the opportunity come. 

• For those who bought, sell it at RM 2.80 if possible. Otherwise, sell it if the price drop below RM 2.30.
• For those who yet to bought, do not buy right now.  

Long Term Investor
If you bought AirAsia at the price below RM 1.50, keep holding it because I believe it is hard to have the chance to invest again at that great price. 

• For those who bought, hold it.
• For those who yet to bought, buy it at the price not higher than RM 2.50.

My defination of Short, Medium, and Long term investor as below.

• Short Term: 3 years and below
• Medium Term: 3 to 6 years 
• Long Term: 6 years and above

Please be reminded that above is just a recommandation, digested the info and make your own decision. Good Luck!

Which should I invest? Stock or Mutual Fund?

- - - created on 19th Sep 2016 - - -

There are so many investment channels in the world, such as stock, property, and mutual fund. And this blog is going to give you a deep look whether to invest in stock compare to mutual fund. So what is the differences between stock and mutual fund?

1. Direct / Indirect Purchase of Company Share
I believe all of you do know that buying stock means that you are buying the shares of the listed company. So do the Mutual Fund, just that you are buying those shares indirectly though the Fund Manager. In other word, you are not in direct control of which shares been bought if you are investing in Mutual Fund.

2. The Return
Generally, Stock will has higher return compare to Mutual Fund. A simple common sense, if you having a Fund Manager managing the fund for you without having you paying their salary, where do you thinking their salary come from? E.g. If you buy Share A via Stock, it can give you a return of 10% per annual, but via Mutual Fund, it maybe give you only 6-8% of return per annual. The 2-4% lesser is actually the salary of Fund Manager or any expenses for the Mutual Fund organization.

3. The Risk
Generally, Stock will has higher risk compare to Mutual Fund, especially for those investors with limited fund. Why? E.g. if you have fund of RM 5,000, perhaps you can only inveset in Share A. Whereas, for Mutual Fund where it collected RM 5,000 for 10 investors, it will has RM 50,000 that allowed them to invest in Share A, B, and C. If Share A is making a loss, with Stock you will be lossing money already, but not with Mutual Fund because Share B and C might be earning for you.

4. Invesetment Duration
I do come across some people around me said that Mutual Fund is a waste of money, don't invest in it. Well. I disagree that. It is because they are not well educated with the right knowledge, and they often compare it to Fixed Deposit. Generally, Mutual Fund has a long investment cycle (typically 5 years and above) for you to see the return. This means that within 5 years or more you must not withdraw the fund, or else you will end up make a loss or just breakeven. Whereas, stock can be long term or short term depends on the market situation when you enter the game and what kind of share you are investing.

5. Time & Efforts to be spend
People often said that buying Mutual Fund is good because you do not need to spend so much time study/analyse the stock since the Fund Manager does for you. Indeed, however, there are many Mutual Funds out there, instead of analysing the stock, in fact you need to take times to study/analyse which Mutual Fund is trusthworth and give you great return. So in short, I will said, you need to spare your time to do some research no matter which you are investing (just that you are researching the different things). NOTHING IS FREE!

Figure 1: Differences between Stock and Mutual Fund Summary

So think about it, do you really want to invest in stock if you are yet to enter the market. No matter what is your choice. Always remember, investment is not magic. It takes time and efforts before you start making profits. Just some personal advises, I will prefer go for Stock instead of Mutual Fund, but choice is yours!

If you decided to go for stock investment below are some good links for your to read up. You can always Google up for more.

10 Questions to Ask Before You Buy a Stock
https://www.thestreet.com/story/10139093/1/10-things-you-should-know-before-you-buy-a-stock.html