KDDI about to reach previous low

KDDI is close to returning to its previous low, making it another great opportunity to pick up the stock at a very reasonable buy price. We recommended this stock last time it bottomed, and the current 'double bottom' offers another compelling opportunity to buy this stock. We expect a turnaround in earnings in years to come as they streamline costs. KDDI is the 2nd biggest cell phone seller and network operator in Japan after NTT Docomo.
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Andrew Sheldon www.sheldonthinks.com

KDDI doing well

Five weeks ago we suggested an investment in KDDI in Japan. This mobile phone operator is the 2nd biggest cellphone network provider in the country. Five weeks ago we recommended at Y442, its reached a high since then of Y525. The stock remains in a downtrend, though I believe it is going higher at some point. It may fall back to the Y419 support, though this stock is due for a breakout some time. It has already made a double bottom, for this reason I would be hanging on for bigger gains despite weakness in the broader equity market.
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Andrew Sheldon www.sheldonthinks.com

KDDI - Is this a turnaround story?

For investors who use the CFD platform of CMC Markets, you might be interested in this stock from Japan. KDDI is the 2nd largest mobile phone service provider in Japan. The company has been undergoing a slow restructuring. The company I believe has a lot of debt, thought I don't see it going broke. Rather I would not be surprised to see it perform a wonderous turn-around for two reasons:

1. Rationalisation of services - the company has acquired an agglomeration of brands and cell phone standards. Its task is to get customers onto a single standard. These brands include Tuka (which I used to use), AU and PHS.
2. Expanded sales - I would expect KDDI to benefit from cut backs in customer expenditure. I envisage that customers will shift to lower cost plans, i.e. pre-paid options, particularly students and single people.
3. Persistence of low interest rates should allow them to make in-roads
4. Investor (Vodafone? re-entry) or capital raising

Its competition is Docomo, which has always offered a premium & family service. I think Vodafone is the most likely company to enter the market. It has previously sold out of Japan, having sold to Softbank, but I would not be surprised to see it re-enter the market given its experience in Japan, and because of the large market share it will acquire. Anyway, I watch this stock with interest because their share price has sunk back to previous lows.
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Andrew Sheldon www.sheldonthinks.com

Aquarius Platinum - watch for new highs

Aquarius Platinum has been doing very well of late after having recommended them at $2.60 about 6-7 months ago. I would be taking a look as they test a previous resistance level. My concern is that they will fall back in the light of current SIV fears. I would wait for market direction on this issue. One must remember that this is a very volatile stock, so one needs to react quickly to any technical signal. Refer to the attached chart - you are looking for a break out to a new high, or a fall below the previous low. The outlook for platinum is very good - both because its a monetary asset and because of its application in fuel cells, but that is long term. In the short term, I believe they are expanding output and cutting costs.

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Andrew Sheldon www.sheldonthinks.com

Australian Agricultural Company (AAC.ASX)

Once again we are at a place where Australian Agricultural Company not only becomes a good buy, but I would suggest to you its a probable takeover target. I'm not altogether sure a takeover would succeed however. Why? For two reasons:

1. Its the only public company in Australia
2. I think its the largest private owner of land in Australia - so I can't see that passing to foreign hands
I have already sung the praises of this company, so I'd be inclined to just refer to those. Once again its a timely entry. Food prices will move up, and this company will continue to benefit from strong beef demand in Asia, and I would suggest from a free trade agreement with ASEAN countries. It will even benefit from climate change, as northern Australia is experiencing more rain.
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Andrew Sheldon www.sheldonthinks.com

Futuris Corporation (FCL) - buy

Futuris Corp is one of my dad's old favourite companies. In actual fact this is precisely the type of company that is good to buy in these times because it is a large company with good exposure to the rural Australian economy. There are several reasons why we should be excited about that:

1. Commodity prices might have collapsed, but food prices will hold up better, and the $A has collapsed as well so $US receipts from commodities will translate into a lot of $A. That is good for farmers.
2. I would also expect the rural sector to benefit from infrastructure projects in rural areas. Nation building projects.
Aside from these points - the stock has reached a low point. Looking at the chart, we can see a hang-man candle pattern, which to my mind is a signal to re-enter this stock.
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Andrew Sheldon www.sheldonthinks.com

Commonwealth Bank (CBA.ASX) - support $20-22

The Commonwealth Bank of Australia (CBA) is another bank which has plummeted to lows. I can actually see it finding support soon - around $20-22/share. I'd be inclined to place an order around $20 because I think it will reach those levels during intra-day trading and recover to $22-23 level.
Historically the stock has proven strong resistance at $35/share, however is this market I would be surprised to see it exceed $30/share.

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Andrew Sheldon www.sheldonthinks.com

Bank of Queensland (BOQ.ASX) - support at $7

The Bank of Queensland (BOQ.ASX) strikes me as an even better buy than ANZ because of its favourable geogrpahic exposure to Queensland. Queensland has several positive aspects to it:

1. Strong population growth
2. Strong tourism potential - given the low $A outlook
3. Strong coal & gas sector - thanks to coal seam methane. The investments planned in this sector will be preparatory for the day the global recovery occurs. There are plans for an LNG terminal for the gas, likely power stations, there is a constraint on coal export capacity too.
4. Prospect of a merger with a financial services (wealth management enterprise) - long term
This bank also has collapsed along with the other banks. There is I suggest the prospect of greater exposure to loans, so you might want to investigate its provisions for doubtful debts, and the CEOs comments in this regard. But for a trade, there is some upside coming.
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Andrew Sheldon www.sheldonthinks.com

ANZ Bank - approaching $10 support level

Australian & New Zealand Banking Corporation (ANZ) is under stress as it approaches its $10 support level. The Australian banking sector is in good condition I would think, so this would strike me as a good base from which to buy. ANZ does have greater exposure to NZ, but the other banks are similarly exposed. Commonwealth Bank owns Auckland Savings Bank (ASB) and Westpac also has a subsidiary here. ANZ has been the leading Australian bank in the Asian market.

ANZ has fallen from over $30 to almost $10. That strikes me as a decent correction even if the banking sector is not going to be one of the best performing in the next few years. One needs to remember that the banks have a solid position in wealth management, and their control of credit and forex is unassailable thanks to government favours (barriers to entry). People will say that there are no barriers to entry, but the reality is that huge amounts of money would be required to duplicate the position of the major banks. Interestingly a number of Australian financial institutions are interested in becoming banks, so we might just see that reality. I would love to see an online bank like Shinsei Bank in Japan. But you really want a bank that can perform all the tricks. Its not enough to offer cheap services, you want a full range of services. eg. Stock broking. Some existing banks have relationships with third party brokers, etc, but these relationships are too arms-length to effectively integrate services. B
uy at $10, look for exit before $15. No buy & hold in this climate. We should be traders for the next few years, with the exception of gold & silver, where we can take longer term positions.
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Andrew Sheldon www.sheldonthinks.com