PC WONG - Amazon S3 filedistribution history 2006 us$0.93985 2007 us$2.31934 2008 us$9.27461 2009...

PC WONG

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ETFs


• What are ETFs?

• ETFs are Exchange Traded Funds. They can be any of the following categories:

- Index related; one that tracks any of the major indices (long and short)

- Commodity related; one that tracks specific commodities such a gold and silver

- Stocks related, one that invests in a basket of stocks dedicated to a specific industry or category such as the financial or biotech industry, or a combination of small cap companies

- Currency related; one that tracks the US$ vs a basket of currencies

- Bonds related; one that invest in bonds such as government treasuries or high yield corporate bonds

ADVANTAGES OF INVESTING IN ETFs


• ETFs are very much like mutual funds, but are different in that ETFs have lower management fees

• ETFs also provide the investor with higher intraday price visibility. You can see the price movement live vs mutual funds which you can only see the closing price at the end of the trading day. The price dynamics are very different

• ETFs invest in various type of markets or stocks in different countries, thus allowing you broaden your investment horizon across several countries vs a single stock investment

• ETFs are traded like normal a stock, thus you can short, buy via margin account, etc

DISADVANTAGES IN INVESTING ETFs • ETFs invest in mainly large cap stocks only within the index, so certain micro

or small cap stocks with excellent potential with growth opportunities are often ignored

• Because ETFs are traded like any other stocks, they could be subject to wild swings in intraday trade or may be subject to a short attack

• Dividend yields in ETFs are normally lower than ordinary stocks

• Certain ETFs are highly leveraged, leveraging up to 2x to 3x. These ETFs are risky and thus need to be studied carefully. A 1% decline in price of the index or commodity could result in 2% or 3% decline in the ETF’s price accordingly


PROSHARES SHORT DOW30 ETF

• Listing : NYSE:ARCA under the code DOG. Singular unit

• Definition : It is an ETF that seeks a return that is -1x the return of the Dow 30 Index for a single day as measured from one NAV calculation to the next

The ETF tracks inversely to the Dow 30 Index

• Uses : To hedge against the index decline

To profit from the decline

Underweighting exposure to a market segment


DOW 30 COMPONENT STOCKS • 3M (MMM) American Express (AXP) Apple (AAPL)

• Boeing (BA) Caterpillar (CAP) Chevron (CVX)

• Cisco (CSCO) Coca-Cola (KO) Disney (DIS)

• Dupont (DD) Exxon Mobil (XOM) General Electric (GE)

• Godman Sachs (GS) Home Depot (HD) IBM (IBM)

• Intel (INTC) Johnson & Johnson (JNJ) JPMorgan Chase (JPM)

• McDonald’s (MCD) Merck (MRK) Microsoft (MSFT)

• Nike (NKE) Pfizer (PFE) Procter & Gamble (PG)

• Travelers (TRV) United Technologies (UTX) UnitedHealth (UNH)

• Verizon (VZ) Visa (V) Wal-Mart (WMT)


DOW 30 TOP 10 COMPANIES


Source: www.proshares.com

The top 10 companies have a combined weightage of 51.62% Any fall in earnings in any of the top 10 will impact on the Dow 30 index Total value:

US$344,936,995.45

DOG PERFORMANCE YTD • An ETF that seeks a return that is -1x the return of the Dow 30 Index for a single

day as measured from one NAV calculation to the next



DISTRIBUTION HISTORY

2006 US$0.93985

2007 US$2.31934

2008 US$9.27461

2009

2010

2011

2012

2013

2014

2015


SHARE PRICE PERFORMANCE (DOG)


Historic of US$88.11. Current price is US$22.55. This represents a 74.4% discount off its historic high

Chart Source: www.morningstar.com

PROSHARES SHORT S&P 500

• Listing : NYSE:ARCA under the code SH. Singular unit

• Definition : It is an ETF that seeks a return that is -1x the return of the S&P 500 Index for a single day as measured from one NAV calculation to the next

The ETF tracks inversely to the S&P 500 Index

• Uses : To hedge against the index decline

To profit from the decline

Underweighting exposure to a market segment


PROSHARES SHORT S&P 500 (SH)

• Energy 6.92%

• Materials 2.78%

• Industrials 10.10%

• Cyclical Consumer 13.10%

• Non-Cyclical Consumer 9.86%

• Healthcare 14.74%

• Financials 16.52%

• IT 20.43%

• Telecom 2.42%

• Utilities 3.13%


6.92%

2.78%

10.10%

13.10%

9.86%

14.74%

16.52%

20.43%

2.42% 3.13%

S&P 500 SECTORS

SH PERFORMANCE YTD • An ETF that seeks a return that is -1x the return of the S&P 500 Index for a single

day as measured from one NAV calculation to the next

• Total value: US$1,674,903,173.50



DIVIDEND HISTORY

2006 US$1.1590

2007 US$2.3147

2008 US$0.6745

2009

2010

2011

2012

2013

2014

2015


SHARE PRICE PERFORMANCE (SH)


Historic of US$97.08. Current price is US$20.90. This represents a 78.5% discount off its historic high

Chart Source: www.morningstar.com

IFS ASSESSMENT ON ETFs: INSURANCE & RISK


• Use the DOG ETF and SH ETF as hedges against decline in the indices. The short ETF is an INSURANCE POLICY in the event the world suffers another economic or financial shock

• You should NEVER over invest in a short ETF as the risk can be very high

WHEN TO BUY? • Look out for the Q4 2015 average earnings of the Dow 30 and S&P 500 Index

• If a fall in earnings, it is an indication to start accumulating

• Buy in small quantity first, 50 - 100 units for a start

• Look out for the breach of the psychology 17,000 points for the Dow and 2,000 points for the S&P 500 indices

• It is a hedge against a crash. Take profit as soon as it reaches near the historic highs. Not rated by Ideal Ratings

NEXT FOCUS: SILVER


• Silver like Gold, is a precious metal

• Useful hedge against global economic crisis

• Unlike gold, silver has industrial applications, therefore there is constant demand

• Silver has fallen by more than 70% in price vs Gold, which has fallen by approximately 40%

• Therefore Silver would have greater upside potential vs Gold

SILVER WHEATON CORP


• Listed on the NYSE under code SLW. Singular unit

• Largest precious metal streaming company in the world

• Has streaming agreements for 21 operating mines and 6 development stage projects

• Stake in two of top five silver deposits worldwide

SLW’S WORLWIDE PRESENCE


Source: Silver Wheaton website

SUMMARY OF FINANCIALS YTD 2015


• Revenue US$448.191M in 2015 vs US$479.801M in 2014

• Profit of US$7.220M in 2015 vs US$147.795M in 2014

• Current Assets US$84.083M

• Non Current Assets U$4,925.094 M

• Total Assets US$5,009.177 M

• Current Liabilities US$17.054M

• Non Current Liabilities US$649.302 M

• Total Liabilities US$666.356 M

• Total Equity US$4,342.821M

BENCHMARK AGAINST KPIs


Actual KPI

• Revenue Growth -6.59% +5%

• Net Profit Growth -95.1% +10%

• Current Ratio 4.93 >1.0

• Debt to Equity Ratio 0.15 <1.5

• Distribution Yield based 1.5% 7.5%

• NAVPS US$10.75

• SP/NAVPS 1.23x <3x

KEY TAKEAWAYS


• Production of precious metals climbed 24% in Q3 2015 vs Q3 2014 (11.0 million tons vs 8.9 million tons)

• Sales of precious metals climbed 17% in Q3 2015 vs Q3 2014 (10.2 million tons vs 8.7 million tons)

• Price of silver fell to US$15.05/oz vs US$18.98/oz during the same period in review

• Impairment charge amounting to US$154.0 million in Q3 2015 due to the mine life of one of SLW’s assets being unable to extend beyond 2020

• Operating cash flow fell to US$0.25 per share in 2015 vs US$0.34 per share in 2014

• Average cost of production being US$4.58/oz in Q3 2015 vs US$4.59/oz in Q3 2014

KEY TAKEAWAYS (CONT’D)


• SLW cash on hand has been greatly reduced; ie: US$80.512M currently vs US$308.098M in 2014

• However its current liability is low, therefore will not exert pressure on its ability to service its current commitments

• Its debt to equity ratio remains strong

DIVIDEND HISTORY

2010

2011 US$0.18

2012 US$0.44

2013 US$0.45

2014 US$0.26

2015 US$0.25

As market conditions are not favourable, we will assume a dividend rate of US$0.20 going forward

Using US$0.20 as a benchmark, this represents a potential minimum yield of 1.5% based on the closing price of US$13.23 a share on 9 December, 2015


SHARE PRICE PERFORMANCE


Source: www.Morningstar.com

10 Year Historic Low of US$2.81 and Historic High of US$46.91 Current price of US$13.23 is 71.8% off its Historic High of US$46.91

EVENTS WHICH COULD IMPACT THE STOCK NEGATIVELY


• Continued slide in silver price will put pressure on the stock

• Impairment charges

• Labour strife

• Accidents in any of the mines

IFS ASSESSMENT: SPOTTING THE TIME TO BUY


• The price of silver continues to remain weak. Interest rates increase could exert pressure on the price. Best indicator of a bottom when the price steadies after initial breach of support level(s). The major support level is US$13.50/oz.

• Look out for weak economic data coming out of the US and China which could support the price of silver. Q1 2016 could be a pivot point

• Look out for the Federal Reserve’s opinion of the state of the economy and hints for any further interest rate hikes. Date of meeting 15-16 December

• Study the Q4 2015 report to look for improvement in cash flow

• Silver is a hedge like short ETFs. Shift in negative sentiment will lend support to the price of silver as demand for safe haven increases

• US Mint recorded that the American Silver Coin sales increased 27% in November vs October. This shows that demand for silver is increasing amidst a weak global outlook

IFS ASSESSMENT


• BUY only when the price of silver steadies after the initial knee jerk reaction to any interest rates hike

• The BUY indication MUST be supported by improvement in cash flow

• Being the world largest silver producer, SLW will be the largest benefactor once silver begins an uptrend

• Medium to High Risk. A lot hinges on the price of silver and continued demand for silver

• Syariah compliant as at 9 December 2015

MY DISCLOSURE


• I do not own shares any of the ETFs mentioned or SLW

• I intend to own both of the ETFs mentioned and SLW

PC WONG - Amazon S3 filedistribution history 2006 us$0.93985 2007 us$2.31934 2008 us$9.27461 2009...

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Transcript of PC WONG - Amazon S3 filedistribution history 2006 us$0.93985 2007 us$2.31934 2008 us$9.27461 2009...