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