My Special Christmas Present

I have closed my BCM position on 2009/12/23 and on the same day and the following day I have purchased share of Pacific Basin (2343) with an average price of $5.35 per share. Which I think is a very good investment opportunity for long term.

Reason for entry:
Actually I have been buying share in 2343 since year 2008 in my own share portfolio. My first purchase was on 2008/08/11 at a price of $9.88 per share. Since then I have continue to increase my position in 2343 during the financial crisis. My current average buy price is around $6.

Fundamental Analysis
Pacific Basin is a company involved with shipping and transport of goods all around the world. The industry had a really bad year last year because of the financial crisis and the fall of BDI index. But to me it give me opportunity to buy this stock close to it net book value of $5.76 per share. Which is a good buy. The stock had fall from a high of $18.70 with it lowest at around $3. The company is very profitable ROE 35% and Net profit margin 24% according to last year annual report. With a current ratio of 4.4 and a very strong balance sheet. A cash to total debt ratio of 1:1.2. Which means if necessary the company should be able to pay off all its debt with its cash.

Technical Analysis
The share had been trending up for more than 6 months. So the overall trend is UP. Recently the share price had drop below the 30 week EMA which mean good value.

Plan
Invest for long term which aim for a price target of $15.35 which equal to around 200% return. In order to take this opportunity I had incurred a small loss from the option position.

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