WeiQiao Textile raised around 4% on Friday. Based on the recent trend, it keep floating in the range of $11 and $13. Besides, by using the expontential regression, I expect this stock will drop back to below $12. In order to realized the profit, I sold a lot of my holding yesterday, which I bought at $10 per share, with 24% profit margin. I am expecting to buy it back at the price below $11.5 in next 2 weeks.
Recently another stock, South China Morning Post (0583.HK), catch my attention. This stock perfectly fit the requirement for a good stocks according to Warren Buffett's stock picking strategy, SCMP fit the following factors.
1. It has high average Return of Equity and Return of Asset ratio (consistantly above 12%)
2. It has low Debt/Equity Ratio, that means low pressure on interest increase.
3. It has a almost monopoly status in HK's English newspaper market.
Recently SCMP is suffering serveral unfavorable factors which cause the stock price to dropped quite a bit, including,
1. The listed HK stocks need not to put their announcement on the newspaper, that will cause 5%-10% reduction in the advertising revenue.
2. Competition on the classified post, from both other English news paper and Internet job Posting Sites.
3. Another possibe factor maybe the shrinking of the Engish Readers in HK after the decrease in influence of British government.
I estimate the buying point using SAS Forecast, this time instead of using Expotential Smoothing, which I tested with the history data, is less accurate that another methods, Stepwise AutoRegressive algorithm and have the following result.
The SCMP is expected to get back to around $2.9 and remain flat. I think it will be a right price to buy the stock at around 2.75, which is also the stock buy back price by the SCMP last year.
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