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Online Share Trading

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sticking to the plan here

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Not applicable
So after seeing my investment come off by more than 40% since its peaks in 2014, I decided to re-look at my position here. MTA reported growth in SA and Turkey, despite massive headwinds. The automotive and manufacturing sector in SA is in recession, and Mutlu lost basically its entire Russian market (which was significant) - thanks to political, economic and worst of all, currency instability. A growth in EPS despite all this! Now that is the hallmark of a great company. I am keeping my position for sure. One decent supply agreement between Mutlu and a European car manufacturer for the new range start/stop batteries, and this stock will fly!
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6 REPLIES 6
CHATTYCHAT
Super Contributor
At least you have the backing of prominent shareholders with substantial holdings! Now with Brand P as Chair, one wonders...
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can I ask, knowing fundamentals is a story we spin ourselves, sometimes we get it right sometimes we get it wrong...how do you know when your wrong?

For example Buffet used his balance sheet analysis and forecasts on IBM, he then bought IBM, 6 months later he reviewed and realized he was wrong, (luckily) he sold out at a profit.
Ie the direction of the share didnt result in action, it was his methodology.

What is your exit strategy on this one?
I can understand ignoring technicals if thats your style, but how do you know your wrong on a fundamental analysis, when the share keeps going down but your nothing has changed fundamentally.
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MCB
Occasional Contributor
Part of the recent price pressure in the share may have been as a result of the PIC having recently taken the decision to convert some of their active managed assets to passive assets. Looking at monthly share holdings distributed by the JSE this appears to have resulted in them trying to flog close on 3m MTA shares. Given the relatively limited trading volumes in the share, exiting such a large stake is bound to push prices down. From a fundamental aspect, FY15 is the first year when MTA starts benefiting from the sale of Start Stop batteries in the aftermarket. Margins on aftermarket sales are multiples of those earned on sales to OEMs. As aftermarket sales ramp up one can expect margin expansion to start coming through. Ukranian battery manufacturers historically provided close on 3m batteries to Russia. Post the Russian / Ukraine standoff, these batteries had to be redirected to markets historically supplied by Rombat. If the Ukranian battery producers go out of business (indications are some have already folded, others are teetering) not only will this reduce the pressure on margins that Rombat felt during 2H14 and 1H15, but there is also the potential for Rombat to eventually replace the imports into Russia historically provided by Ukraine. Finally we are yet to see the benefit of the international aftermarket distribution agreement Metair has signed (last results announcement seemed to indicate it's due to commence end of this year) - access to another 2500 aftermarket outlets across Europe can only be good for MTA. The above factors will take a while to come to the fore - certainly don't expect fireworks at the year end results, but if you're prepared to hang around for 3+ years, I reckon the current price presents a good opportunity to get in.
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SimonPB
Valued Contributor
BC if I can step in an offer 5c of how I do it ..
a long term buy I have a few points that I really like, 3 things that make this company outstanding and I have evidence that they make money from these three things. If any of the three start to change for the worse, I seriously look at getting out a hint of two turning south and I sell .. timing is mostly frot but that's no the issue .. I also revisit my theory about the three things every results, coz I may be wrong on those, again if I am I exit
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I can respect that, saying these were my reasons for buying, hence if they are no longer valid then I sell.
Its just I read from a chap in the US who uses fundamentals for buying and technicals for selling.
I think back to my experience with SA Coal Mining, a broker spun me a story everyday on how good it was fundamentally, yet the share price went from R4 to 15c, so we bought all the way down. This was a couple of years ago

So I do wonder what is the best methodology, using fundamentals on fundamentals or technicals and fundamentals.

Guess pros and cons though, cause waiting for fundamentals could mean watching the share price go down over a year and you have to wait, but using technicals could mean you get whipsawed in and out.

This all refers to investing though, not trading.
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my own 2c worth on this - I look for a compelling story. I am not interested in 10% growth a year - I can get that kind of growth story sticking to passive ETF's. My investment portfolio is a growth stock one. I want a story. If I believe in the story, I stick with the stock. When the story doesn't hold water anymore, I look to get out - and here I will look at technicals, and I use the 'extreme price or extreme momentum' rule of thumb. So, for e.g. I hold Calgro - with the massive demand for low cost housing - they are the only guys that can pull this off in a massive growth sector - great story. Brait - I bought because I like Pepco. When they sold pepco, I no longer like this stock. But I still hold because technically the damn thing is still climbing (extreme momentum category). Nepi - recreating the South African mall success in fringe EU countries - great story. Steinhoff - need I say more. My two disappointments - Arrow and Redefine. I am definitely offloading these soon.
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