Jump to content

Hong Kong Charts / Beware Crowded trades

Recommended Posts

Hong Kong Chart search - Test Thread



From First 110 stocks


Co# : -Last- : COMPANY NAME---- : P/ER : Yield : comment
015 : $00.68 : Vantage Int'l Holdings. : 3.80 : 4.42%
018 : $00.89 : Oriental Press Group- : 14.3 : 2.25%
032 : $06.25 : Cross-Harbour Hldgs.- : 5.80 : 3.84% ( no )
054 : $26.05 : Hopewell Holdings Ltd. : 1.86 : 4.22% ( no )
064 : $00.35 : Get Nice Holdings Ltd. : 2.90 : 11.4%
093 : $00.75 : Termbray Ind.s Int'l. --- : 6.49 : 24.0%
097 : $00.62 : Henderson Investment : 210. : 6.45%
103 : $0.295 : Shougang Concord Cn : n/a- : n/a--- ( no )
109 : $00.29 : Good Fellow Res'rces. : 4.01 : n/a--- ( no )


Vantage / HK-18



Hopewell / HK-54 - may be rolling over



Get Nice Holdings / HK-64



Termbray Ind.s / HK-93


Link to comment
Share on other sites



Beware the crowded trades – Cement, Rails and Big Miners

If analyst recommendations are a good guide to what investors own then Cements, Rails and Diversified Miners seem crowded. Obviously these sectors have structural reasons for why analysts are bullish but when a stock is crowded on the sell side, then bad news is really bad in this kind of market. The most consensual longs seem to be China Communications Construction (1800 HK), China Resources Cement (1313 HK), China Railway Group (390 HK) and Conch (914 HK). The big diversified miners are in the same camp. We are nervous that only 4 out of 31 analysts have a sell recommendation on Rio Tinto (RIO AU) when iron ore should break below $120 per tonne today for March delivery and copper can’t rally. That is why we took profits on the name on January 20.

Our key call right now is to own Gold Miners partly because analysts and fund managers dislike them so much. Three years ago just about every gold analyst had a buy recommendation on Zhaojin (1818 HK) and was telling you gold would average $1,800 to $2,200 in 2012E.

Most loved and unloved stocks – 3 years of bear markets have trained analysts to be bearish Gold miners and Coal stocks. Cement and Rail are consensus longs


Today half the analysts have a Sell on this name. Yanzhou Coal (1171 HK) is officially the most unloved stock in our universe and it makes you wonder if the recent correction in coal prices is already in the price. Zijin Mining (2899 HK) has caught our eye as a potential long. It might be too early but while the numbers last night were disappointing 2014E earnings are already pricing that in. Half of the analysts have a Sell. If Zijin Mining can trade up this afternoon on these bad numbers that will be a good sign. The $10 pullback in gold seems to have spooked a seller in both Zhaojin and Zijin, but you have to buy these names on the red days.

The most unloved stock in Materials : Yanzhou Coal Mining (1171 HK)

with 13 Sell Recommendations out of 25 Analysts – attractive on the chart


Source: Bloomberg

Chalco (2600 HK) is a good example where the most unloved names are beginning to outperform. Half of the 18 analysts have Sell recommendations. Yanzhou Coal (1171 HK) is officially the most unloved stock in our universe, with 56% Sell recommendations. What is even more interesting is that out of the 25 analysts only 2 have a Buy recommendation. We like that.

The most loved stock in Materials : China Communications Construction

(1800 HK) with 0 Sell Recommendations out of 19 Analysts


Source: Bloomberg

We don’t get why analysts are so in love with China Communications Construction (1800 HK). Consensus earnings have steadily fallen in the last three years and the stock appears to be breaking down. If this stock can’t rally this morning on good news in the China market then that is not a good sign.

Link to comment
Share on other sites

Thanks for this. Going against the trend has been one of the best investment strategies - Rothschild, Baruch, Kennedy, Getty, Onassis (among many others) built their fortunes buying when everyone else was selling (or vice versa).


A random thought on RIO which I am looking at very closely is the sulphur content. Some producers have 1.5-2.0% sulphur in their IO which is a huge polluter. RIO's Australian IO has one of the lowest at well under 0.5%. If China gets serious about pollution, that could become a factor for the IO producers. RIO also has a very strong balance sheet. Disclosure: not held but reading the most recent reports tomorrow.


On Yanzhou - I made money on this a few years ago (but not as much as I would have selling out sooner). The problems with this company are (i) high gearing (ii) politically incorrect industry (iii) FX risk and (iv) sub-optimal access to PRC domestic distribution (last time I checked which was a few years ago there were capacity constraints on domestic shipments of coal).


Suggestion: a thread for people to post contrarian investment ideas? I'm happy to kick it off if you think people would be interested?

Link to comment
Share on other sites

"Suggestion: a thread for people to post contrarian investment ideas? I'm happy to kick it off if you think people would be interested?"


Why not?

(I am not sure how many people follow HK stocks here, btw.)

If they are HK ideas, we can post them here, and change the Title to whatever you like.


I think Gold shares are a pretty interesting Contrarian theme right now

Link to comment
Share on other sites


This topic is now archived and is closed to further replies.

  • Create New...