For JKH Small Scale Investors

investcsesl · 1 For JKH Small Scale Investors Sat May 30, 2015 2:07 am

investcsesl

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For JKH Small Scale Investors

Below is the compression of current prices of JKH.N000, JKH.W0022, JKH.W0023.

My recommendation is to go for JKH.N000 at or below current prices and hold for minimum of 05 years as a solid investment. Of course you will get better returns during short term fluctuations. But to see a solid momentum in the share, we have to wait till both the warrants get exercised.

JKH - N
Current Trading Price	195.00
Number of Shares	7
Cost for 07 Shares	1,365.00
Cost with Brokerage	1,380.29
Dividend XD - 04 June 2015	10.50
After Subdivision
Number of allotted Shares	8
Total cost per 8 shares	1,369.79
Cost per share	171.22
Projected value at Sep 2015	175.29
Expected Dividend for FY15/16	3.50
Projected value at Sep 2016	183.98
Note: interest = Average Weighted Fixed Deposit Rate (AWFDR) =	7.12%

JKH - W22
Current Trading Price	20.00
Number of Warrants	7
Cost for 07 Shares	140.00
Cost with Brokerage	141.57
After Subdivision
Number of allotted Warrants	8
Exercise Price	161.87
Payment for 8 Shares	1,294.96
Total cost per 8 shares	1,436.53
Cost per share	179.57
Projected value at Sep 2015	179.79
Loss after 04 months when buying JKH.W22 at present	-5%
(Loss considering 4 months FD)	-3%

JKH - W23
Current Trading Price	37.00
Number of Warrants	7
Cost for 07 Shares	259.00
Cost with Brokerage	261.90
After Subdivision
Number of allotted Warrants	8
Exercise Price	170.62
Payment for 8 Shares	1,364.96
Total cost per 8 shares	1,626.86
Cost per share	203.36
Projected value at Sep 2016	206.07
Loss after 16 months when buying JKH.W23 at present	-16%
(Loss considering 16 months FD)	-12%

Quibit · 2 Re: For JKH Small Scale Investors Sat May 30, 2015 2:15 am

Quibit

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Excellent analysis. Warrants are risky and it could burn your money fully as shown Thanks my friend.

glad · 3 Re: For JKH Small Scale Investors Sat May 30, 2015 7:08 am

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Quibit wrote:Excellent analysis. Warrants are risky and it could burn your money fully as shown Thanks my friend.

Thats nice. JKH W 22 has a minus value? JKH w 23 has time to play?

sureshot · 4 Re: For JKH Small Scale Investors Sat May 30, 2015 7:25 am

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investcsesl
What was the projected value of JKH on 2014 and 2015 ?

is it trading accordingly to that value now ?

investcsesl · 5 Re: For JKH Small Scale Investors Sat May 30, 2015 8:17 am

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sureshot wrote:investcsesl
What was the projected value of JKH on 2014 and 2015 ?

is it trading accordingly to that value now ?

Sureshot, Projected values after 04 months and 16 months are calculated considering the interest rate of AWFDR (i.e 7.12% as at 29 May 2015 according to the CBSL) for what we are paying now as the comparison to be done at the warrants maturity date.
Investors should worry about what they are actually paying to buy a normal share.

investcsesl · 6 Re: For JKH Small Scale Investors Sat May 30, 2015 12:26 pm

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This is what international investors are watching. That’s why we have to wait till end next year to see a solid uptrend of the share. If this continues value of Warrants will remain almost zero.

http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=JKH.N0000:CSE

For JKH Small Scale Investors Share_11

Recommendation : Buy / Hold

For JKH Small Scale Investors Recomm10

Raj Rajaratnam · 7 Re: For JKH Small Scale Investors Sat May 30, 2015 2:07 pm

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investcesel.... Cool analysis... Much appreciated.

Why you have used September projected value? Exercising date is in November right?

Also Do you think JKH.N price going to come down or stay below 200 until then?

investcsesl · 8 Re: For JKH Small Scale Investors Sat May 30, 2015 5:13 pm

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Raj Rajaratnam wrote:investcesel.... Cool analysis... Much appreciated.

Why you have used September projected value? Exercising date is in November right?

Also Do you think JKH.N price going to come down or stay below 200 until then?

Thanks for the feedback. I will update the sheet with further two months projection up to November.

In reply to the second question, I really don’t have any information about who is the seller and what is the pending sell quantity of JKH.N000. But can be made below two assumptions.

a) If the seller is having JKH.N and JKH.W22 sizable quantities, he will sell JKH.N at current levels and subscribe for JKH.W22 as selling JKH.W22 will not feasible at this situation. In this case JKH.N will not come below 185.
b) If the seller having big quantity of JKH.N and he wants to quit from the market, then the situation is complicated. And it’s all depending on buyer’s negotiation. But there will be strong support still at 185 level

In both the cases sudden recovery in the share is possible up to 200 levels.

investcsesl · 9 Re: For JKH Small Scale Investors Sat May 30, 2015 5:26 pm

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Dear Admin, please advise how can I edit the initial post as I have to do small changes in the projected figures.

Quibit · 10 Re: For JKH Small Scale Investors Sat May 30, 2015 7:44 pm

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There is a time limit on all posts. I will ask IT guys to increase the period.

Quibit · 11 Re: For JKH Small Scale Investors Sat May 30, 2015 8:37 pm

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Its changed to 24 Hours. You should be able to change it now. Smile

investcsesl · 12 Re: For JKH Small Scale Investors Sun May 31, 2015 12:06 am

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More traders are involved in not only JKH.W, but also other warrants as well due to the nature of “High Risk, High Return”.

We buy warrants hoping investors will push normal share so that we can have a good short term return from warrants. Therefore we don’t worry about the date of expiry and conversion rate as much. Even I have bought all types of warrants and burnt my fingers lot. That’s the reason now I’m not in to warrants.

Whoever received JKH warrants free of cost still can sit happily and make it convert at the end. That’s the real meaning of issuing warrants by a company to benefit the current share holders, not the traders who buy at higher prices and put themselves in to problems.

VALUEPICK · 13 Re: For JKH Small Scale Investors Sun May 31, 2015 1:40 am

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Thank you . investcsesl for your analysis on JKH. I also believe when JKH hit 185-190, it should rebound to around Rs.200 again. It will be most probably on Monday. It is a very crucial week for JKH next week. However there is some support for this Blue chip in the market. We will wait and see.

Those days I can remember when I asked somebody about NTB he said he bought around Rs.9 it and it was trading around Rs.15 at that time. Actually he thought warrants as stocks. I also have lost by investing in warrants. It is better to buy stocks than warrants. However those who can identify trend correctly will have trading opportunities in warrants.

Raj Rajaratnam · 14 Re: For JKH Small Scale Investors Sun May 31, 2015 12:54 pm

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True enough. Most of the small investors (including me), don't know the warrant mechanism properly.
Even though I'm in finance filed I burnt my fingers with "GREG.W".

But still the greediness is not letting me to invest some in my favorite company's warrants....

Raj Rajaratnam · 15 Re: For JKH Small Scale Investors Sun May 31, 2015 1:00 pm

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investcsesl wrote:

In reply to the second question, I really don’t have any information about who is the seller and what is the pending sell quantity of JKH.N000. But can be made below two assumptions.

a) If the seller is having JKH.N and JKH.W22 sizable quantities, he will sell JKH.N at current levels and subscribe for JKH.W22 as selling JKH.W22 will not feasible at this situation. In this case JKH.N will not come below 185.
b) If the seller having big quantity of JKH.N and he wants to quit from the market, then the situation is complicated. And it’s all depending on buyer’s negotiation. But there will be strong support still at 185 level

In both the cases sudden recovery in the share is possible up to 200 levels.

You are correct. I have a gut feeling this sudden recovery may last to 220 level before the W22 exercising date.
If so it will be honeymoon period for warrant holders.
But yeah High risk.... High return

But its complicate as all depend on the political conditions and investor sentiments.....

Quibit · 16 Re: For JKH Small Scale Investors Sun May 31, 2015 1:00 pm

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Raj Rajaratnam wrote:True enough. Most of the small investors (including me), don't know the warrant mechanism properly.
Even though I'm in finance filed I burnt my fingers with "GREG.W".

But still the greediness is not letting me to invest some in my favorite company's warrants....

Raj Rajaratnam is not a small investor of JKH. Smile

Last edited by Quibit on Sun May 31, 2015 1:17 pm; edited 1 time in total

investcsesl · 17 Re: For JKH Small Scale Investors Sun May 31, 2015 1:02 pm

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Dear Raj (hope you will excuse me calling by your first name, when considering your age)

We all are in the same boat. only reason we lost huge amount of money is the "Greediness". I will put my next post with my experience how to minimize the greediness and convert ourselves to become small time investors.

Raj Rajaratnam · 18 Re: For JKH Small Scale Investors Sun May 31, 2015 1:06 pm

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Quitbuit I learnt my lessons..... I'm in my good conduct time....
Don't corrupt me again... :no:

Raj Rajaratnam · 19 Re: For JKH Small Scale Investors Sun May 31, 2015 1:09 pm

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investcsesl wrote:Dear Raj (hope you will excuse me calling by your first name, when considering your age)

We all are in the same boat. only reason we lost huge amount of money is the "Greediness". I will put my next post with my experience how to minimize the greediness and convert ourselves to become small time investors.

No problem investcsesl,

Age is not barrier.... I'm still young mentally....
Keep going with your posts....
I'm enjoying this forum......

investcsesl · 20 Re: For JKH Small Scale Investors Sun May 31, 2015 1:45 pm

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Raj Rajaratnam wrote:
You are correct. I have a gut feeling this sudden recovery may last to 220 level before the W22 exercising date.
If so it will be honeymoon period for warrant holders.
But yeah High risk.... High return

But its complicate as all depend on the political conditions and investor sentiments.....

It's highly unlikely JKH.N to bounce back to 220 levels during the exercising date of W22. But given the full respect of your gut feeling I have done a below calculation. Still I feel, the best option is to go with normal share and get a very decent profit of 28% within 06 months, rather than aiming 200% profit from W22 and ended up loosing 100% of investment.

JKH - N
Current Trading Price	195.00
Number of Shares	7
Cost for 07 Shares	1,365.00
Cost with Brokerage	1,380.29
Dividend XD - 04 June 2015	10.50
After Subdivision
Number of allotted Shares	8
Total cost per 8 shares	1,369.79
Cost per share	171.22
Projected value at Nov 2015	177.32
Expected Dividend for FY16	3.50
Projected value at Nov 2016	186.01
Expected Trading value at Nov 2015	220.00
Profit for six months	28%
Note: interest = Average Weighted Fixed Deposit Rate (AWFDR) =	7.12%

JKH - W22
Current Trading Price	20.00
Number of Warrants	7
Cost for 07 Shares	140.00
Cost with Brokerage	141.57
After Subdivision
Number of allotted Warrants	8
Exercise Price	161.87
Payment for 8 Shares	1,294.96
Total cost per 8 shares	1,436.53
Cost per share	179.57
Projected value at Nov 2015	179.99
Expected Trading value at Nov 2015 assuming JKH.N@220	58.13
Profit for six months	191%

senthu · 21 Re: For JKH Small Scale Investors Sun May 31, 2015 4:33 pm

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what will be expected price of JKH in sep 2016 ?

Raj Rajaratnam · 22 Re: For JKH Small Scale Investors Sun May 31, 2015 5:43 pm

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InvestCSEsl, I was calculating this earlier....

High risk, high return....

Which one you like 28% return or 191% return?

As a smart investor I go for JKH.N.... However, the greed never let us to focus on JKH.N.
Hope for the best.....

senthu · 23 Re: For JKH Small Scale Investors Sun May 31, 2015 5:57 pm

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JKH.N may be traded 250/- after 16 months time. if that happened JKH.W23 give u good return.
Is that right?

investcsesl · 24 Re: For JKH Small Scale Investors Sun May 31, 2015 5:58 pm

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Raj Rajaratnam wrote:InvestCSEsl, I was calculating this earlier....

High risk, high return....

Which one you like 28% return or 191% return?

As a smart investor I go for JKH.N.... However, the greed never let us to focus on JKH.N.
Hope for the best.....

Raj, I have selected JKH.N, and I bought my first JKH share in my life during last week. By doing so, I have forcefully beaten my greediness to a certain extent and now I feel like a tiny investor. If we allow the greediness to develop while taking investment decision it will be a disaster. That was my mistake from the beginning and resulted with heavy losses.

investcsesl · 25 Re: For JKH Small Scale Investors Sun May 31, 2015 6:00 pm

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This post was created to pick the best option of investing in JKH from the three forms of JKH.N, JKH22 and JKH23 at the current downtrend.
Being the best option of normal share as the investment, I never recommend you to sell your holdings of JKH.W22 and JKH.W23 at current market prices.
Now JKH.N is trading almost at the 52 weeks low so that we will expect a bounce back soon. JKH.W22 also has another 6 months to exercise and therefore you will have better chances to recover.
Keep your basic guideline as never sell at a loss.

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