DIC - A Good buy? - analysis

[sam111sam]

Yes. DIC got more than 1/3 of their profits from fair value revaluation, but it likely that they will continue to get more in 2008 and 2009.

Even when you take away 1/3 of their profit, DIC would still have a very good P/E

They made huge and very diversified investments over the past 15 months everywhere. They said that they will start to see the revenue from these investments in the second half of 2008

Given the huge inflation across the GCC, I would expect all their Dhs 9B assests to apreciate very fast.

They have been very consistant is their profitability over the past 3 years, much better track record compared with most DFM listed companies

They have the support of Dubai Gov and Emirates bank is a major share holder as well

So why are the shares have been going down?
I think many investor were concerned that once the new 800m shares will be allocated in the shareholders accounts, many of them might opt to sell them quickly.... which is a valid point

That's why I would bet on DIC shares making a breakout early next week, few days after all the share have been allocated and the selling spree (if any) ......I think DIC shares have been allocated yesterday

[fimah]

Thank you SW, that said - there is a day for DIC as well.
Thank you sam, views the strength of DIC
rightly said, removing the so called revaluations income will not deprive DIC's strong potential. By the way I could not find revaluations as 1/3 of its income, it is 20% of its total earnings. Even if we minus it, those are real like when we accept the same with other companies in the market, which are already at market PE levels or higher than the market.

Many companies like Al Dar, UPP, GGICO, Emaar and indirect assets financiers like Tamweel, Amlak all depend heavily on Real Estate growth, Earnings per share of all these companies comes substantially from assets growth. then we need to minus / deduct there as well.

revaluations go justified with the current inflation as well. The core income from the DIP rentals is not going to end just soon, corporates have seriously invested huge capital on DIC's leased land. This is going to be a permenant income. Valuation had discounted the future rentals that should be shared with the Govt. soon as per their lease plan from Govt.

What sam said looks worth thinking by the fact that even a reduction in their future profitabiliy will not deprive its ranking. Let us stay positive on its outlook...fimah

[sam111sam]

As Sharewadi said "DIC will have its day"

Yesterday, I put my bet on breakout early next week,...came too soon. Unfortunatly I did not buy enough. Now tomorrow might be too tate ..DIC may open with a gap up.

My target price is 4.09 within 30 days

[thajuddeen]

An unusual huge volumes at both ends of the range.

I was trying to buy DIC at some low price.

Yesterday I got at 3.65 but sold at 3.70 when it found a new low at 3.60.

Today I bought at 3.67 and 3.60. I placed a sell order at 3.72 for one lot that by mistake became another buy order executed at 3.70. Then I sold two portions at 3.72. After some time I sold the last portion at 3.70 to see it taking off. I still have to master the right exit. I hope it may find some resistance around SMA25(3.86) and R1(3.88 ). Today's low was a typical bottom just above SM2(3.57). Good luck to holders.

Price Volume % Trades
3.58 1,361,161 1.58% 6
3.59 9,105,167 10.59% 11
3.60 8,149,426 9.48% 31
...
3.70 8,752,973 10.18% 103
3.71 3,707,532 4.31% 79
3.72 6,812,152 7.92% 117
3.73 7,596,828 8.84% 169
3.74 4,144,240 4.82% 112
3.75 13,313,205 15.48% 94
...
3.80 6,982,319 8.12% 131

IN A FLASH
Over 18 millions shares in 48 trades between 3.58 and 3.60 that too in 1 minute and 5 seconds! I really didn't see my buy orders executed .


The data shows, it wasn't a cakewalk but a real tussle won by the bulls at last. I am leaving the counter to see if DANA is going to bottom, my targets S2(2.04) just above SM2(2.03) and S3(2.02).

[sam111sam]

Taj

Thanks for the feedback on DIC. I have never seen this before. Someone dumped a Dhs 100m of shares in on minute and some buy orders came quickly from nwhere to wipe these out in few seconds

I was also looking at Dana, but fundamentals are scary... I have a bad feeling that ADX will see a very painful sudden correction soon. Many speculators that take the small share prices to the limit up without any know reason. Remind me with DFM in 2005.

I'm just afraid that when these speculator dump the junk stocks, it will take the whole market down

What do you think ?

[thajuddeen]

DIC price movements last week was very interesting; full of supense and surprises.

It's just technical that stock is not moving up.

It can easily go beyond 4.50.

I like DIC and want to join when I am out from DANA.

It has a very valid sellif pattern but still it may hit 3.86 on Sunday unless bears blocks it around 3.80.

Good luck

[zayda]

I agree with Thajuddin. DIC will break out and reach 4.5 after news of Msharie divestment is out. Based on fundamentals, it is overweight.

[fimah]

DIC maintains itself as a big suspense movie...!!! fimah

[sam111sam]

Someone bought 30m shares in one go, 10 minutes before the close taking the price 3% up
That's real suspense

Fortunatly this time, I had enough shares

One thing I noticed again and again in the past 1 yr:

The market always gives you one more chance after you miss the boat, when you miss this second chance ....it is gone forever

I guess it is know as "taders remorse", after the investors takes the well worthy shares up, few of them hesitate and sell...the others are also not so sure to buy more. The price slides back again, but not as low as it was. But then it take off and never comes back (happend with me with Shuaa in 4Q last year and in Arabtech recently)

[fimah]

May be the bulluck cart has started its journey...still time to jump into it...but needs patience and time to reach the destination... fimah

[small fry]

I bought some DIC' shares when the price was dropping at 4 earlier this month. SHould I hold on and till when?

[stockguru2008]

The next target for DIC is 4.50. Both technicals and fundamental suggest that it has upside momentum. If you look at volumes for last three days, it is more likely that it will hit 4.50 very soon. DIC has gained big support at 3.90.

I strongly recommend to hold the stock and book profits at 4.50.

[sharewadi]

Welcome to the is-DIC-the-cheapest-stock-out-there forum .

[sharewadi]

Welcome to the is-DIC-the-cheapest-stock-out-there forum .

[stockguru2008]

thx sharewadi for deleting repetitive post. well, it's just an opinion that DIC has good chances to go up. it seems to be poised for big rally. do u agree?

[stockguru2008]

and my prediction was correct!! DIC touched 4.50. WOW!!!

[stockguru2008]

By breaking 4.50 level, the next target for DIC would be 5. I saw massive volumes at 4.45, 4.33 and it is good indication of bull run. eyes set for new target

[vip_seifi]

Dear Stockguru2008 and everyone on SW.com,

I was wondring as to aporximatly how long it might take DIC to reach AED 5 ?? Any idea or guess...?

[stockguru2008]

well, it depends on market condition and trading volumes at DFM. overall, market was down and DIC could have paced more. but you can wait for couple of weeks till it touches 5. but DIC must stay above 4.5 as it is resistance level for DIC.

[laser]

Salam,

The price recommendations in this forum are taken seriously by some of individuals including me.

Even though no one will blame the individual who is giving recommendation but they must ensure their inputs are not based on judgment but rather based on technical analysis.

If it is judgmental or guess, kindly do mention that. It is just a request.

In the end, SW has set rules for this forum and is the right person to instruct.

[investor]

[farhadcub]

hi guys,
i respect everyones views but then it is a fact that TA dont work always...TA might says something and the market might be heading somewhere else.. end of the day the members have to use their own judgement before making decisions..
good luck to all:)

[fimah]

DIC - real value buying seems started today along with short term traders, such a huge turnover of 890 million was never seen at least last 2-3 years on DIC. No, correction please, as per DFM trade history - never in the history of DIC before....

May be taking the news of new companies being established in Qatar. Bull will be replaced by horse and another arabtec story in the offing?

My friend who was watching the market told me, there was a single purchase worth more than AED 150 million at market order, which captured the entire offer side from 4.13 till 4.53, but closed at 4.25 with good support levels. It is seen strongly going up with some rest levels in the interim.....fimah

[thajuddeen]

It was a profit booking price at or above 4.50 at this time.

...... but you virtually had no chance unless you had placed an order at that price. Find the few facts about yesterday's trade.

6 seconds: Trades on or above 4.50

24 seconds: Trades on or above 4.40

No trade: At 4.51 making a small bubble in between (could prove a weakness)

4.32: Price didn't go past this mark after 12 noon (from available incomplete data)

Average and closing is around 4.25 which is more than 6% down from the peak (4.54). Speculators might hold the price between 4.15 and 4.40 today. Hopefully we might get a chance to sell above 4.50 soon.

Speculators had accumulated huge stock upto 4.15 early on and rocketed the price above 4.25 and sold around 4.30 and above. Analysing the data, it could be a planned action that all was done in few seconds. Some unfortunate buyers who bought at market price should have paid 4.50 and above as the price was around 4.20 a few seconds before.

Lot of people are expecting the price to go past 5 that we should sell it before that! The stock could also fall to 3.80 in couple of weeks. This stock should go past 5 but ...

Stock has peaked over 25% from last week bottom at 3.58.

Good luck

[investor]