Wednesday, March 16, 2011

Sold TopGlove

Got chicken out. Sold Top Glove. Made some 4+%. Wonder why their pricing is not as elastic as I thought they would be.

Its revenue dropped 5%, year on year from RM509.9 million to RM491.5 million. This is a surprise to me as it shows that their unit sales dropped substantially (although this stats is not provided) - my reasoning is that since price of rubber increased more than 40% over the last 1 year, they should be able to increase the pricing of latex gloves by at least 20% to 25% since raw material consists of 60% of costs.

Management of Top Glove in their press release mentioned that they have been impacted greatly by the depreciation of USD and increase in raw latex.

Would make a come back once the position is more assured. I still believe this is a good stock. Should have looked at longer term but I believe in the short run it will have some price pressure due to the weak result for 2Q11. Hence became greedy and took profit.

Meanwhile, I become interested in AEON as it dropped a bit - don't know why, it has no relation to the tsunami in Japan as this stock is only its Malaysian operations.

Serious Investing!

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