Joe's Jeans-JOEZ

Dear Investor,

It makes premium jeans in the United States. It has secured a price niche that is neither too expensive nor is it too cheap. Consumers always want to have the latest fashion and apparent from their balance sheet that consumer spending is likely back.

Profit

Description	2011 (Q1) (USD’000)	2012 (Q1) (USD’000)	2013 (Q1) (USD’000)
Retail	-119	253	-326
Wholesale	4,441	5,671	6,704
Total	4,322	5,924	6,378

Strength:

·         Premium branded jeans. Gross profit margin stands at 50%.

·         The consumers are spending again in the US,

·         Third most owned premium brand in the US

·         Wholesale via Departmental stores are growing

·         Experimenting with retail which could boost their brand image

·         Jeans known for its comfy and perfect fit

Weakness:

·         Dependant on consumers to like them, one wrong product and they are screwed

·         Competition are strong; profit margin maybe eroded from heavy discounts

·         Its jeans; not much of a differentiator

·         Retail is still making mistakes and hiccups

Opportunity:

·         The countries such as China, South East Asia has not been penetrated. IF they can just make it into these markets, the potential will be immense.

·         Their retail strategy in theory should be better; once they sort it out, they will be making money

Threat:

·         Bigger guys going after them; Guys like True Religion.

·         Consumer spending to go down will cause even more discounts

Catalyst:

Currently, they are facing investor’s wrath because of missed earnings. In Q1 2013, they spend money to acquire the founder’s block of shares so that they do not need to pay him the gross profit anymore, thus lowering their earnings. But from the business fundamentals, nothing has changed.

Opportunity to accumulate will be present to accumulate if this falls to levels around USD1.20…(RM3600 per lot)….

DIGI

Ok guys, just bought 20 lots of DIGI at an average price of 4.59. Lets see what how much we can earn from there:

Why i like DIGI?

• Take their last year (2012) EPS and also their dividend. Their PE is ~11. Not very undervalued but nevertheless, it still provides me with a certain margin of safety. Im willing to take a certain risk.
• 2011 profit per share is 33.63...2012 profit per share is 41.81 (EPS+dividend)...take note that 2012 is a bad year for DIGI; with the tax structure higher that chipped away their profit, the network optimization progressed slower than anticipated that resulted in less aggressive customer conversion. However, they still managed to grow at an impressive rate of 24% PROFIT margin! 2013 will be where their network is optimized, no more tax to worry about....so make your own assumption.
• Potential for growth is immense. Telecom is the same as roads. We as a developing nation with one eye aimed at becoming developed nation. it is important to have a good telecommunications network. And Digi stands to benefit from that.
• Migrant sector is well defended. Awesome profit margin there!
• Youngsters LOVE DIGI. When you grab them young, they will likely stick with you for the rest of their lives unless something compelling urges them to change to another telco ( probable but highly unlikely)
• Growth in the data revenue. With more and more youngsters getting their hands on smartphones ( thanks to our Government) the data requirements will likely increase from the youngsters. ( refer to point number 4). Biggest beneficiary, DIGI
• Cost savings with their tie up with Celcom, potential to boost their bottom line.
• With the Government looking to allow foreign ownership up to 70% in telcos, Telenor is definite to buy up the stocks to make up for the 70%. Moreover, EPF is also definitely buying up the stocks so that they can generate the returns for their shareholders from DIGI dividends. When two behemoths are eyeing the same piece of pie, chances of it going up is high.
• DIGI is looking to change the company structure to a trust so that they can pay even higher dividends! when that happens, imagine the funds that will rush in to buy

Currently, all funds are eyeing DIGI but are afraid to go in. Either its because of the General Election or because they are just plain dumb ( im sticking with the latter)..truth is, its a wonderful choice.

BINGO-FAVCO

again make money. Favco at 1.80 now at 1.96. making money is a matter of time if we adopt the correct strategy.

Now all my cash is ready for the general Election. Once it is announced, i will buy in.

Follow me sure will make money. i can feel the bull just waiting to be released