Asiacell, is it time to buy?

[TrinityeXchange]

So I am looking at my portfolio with a lot of pride.  Up until today I have, through the grace of God, managed a stunning portfolio.  At least this is what I was telling myself until a killjoy peeked over my spreadsheet and with a crooked smile retorted, "good morning."  Asiacell!  You heartbreaker who just wont go away.  Okay, fine.  I figure it is time I faced this issue and it is better late than never.  No savvy investor should practice holding a losing stock, and I violated this rule with Asiacell.  Perhaps I should have let her go a while ago in loyalty to my 3% loss rule whereas after a 3% hit, a stock must be sold for a loss.  

 

My question to investment friends is "what to do about Asiacell?"

 

Viable Strategies (my personal consideration highlighted blue)

 

Buy more

If you were like me, you got in on this stock at its initial offering (22 points).  Today the stock can most likely be purchased at just under 10.  This would bring the average buy to 16 which might be a good price point if it is ever to recover.  A person would have to ask themselves if they can see this stock rising to 16 points in the near future?  Additionally is the handsome dividend payouts which do not appear to be lessening any time soon.  I haven't experienced any other stock coming remotely close to the dividend payout of TASC.  Owning more shares of TASC might equate a significant increase in yearly dividends.  

 

This option is a medium consideration for me especially if I elect to double my holdings.  It is a fine time to execute a buy order as well since the stock appears to be near its bottom {nowhere to go but up}.

 

Hold

One could sit on the stock and just collect dividend checks while hoping it rebounds.  Believing it will rebound however might be QUITE a stretch.  A person has to first understand why it fell before they can believe why it would rebound.  In my estimation, TASC fell because majority holders of it are foreign investors (75% I believe) who are very skittish about the situation in Iraq.   As the security situation in Iraq improves, foreign investment will recover which could me good things for share price of TASC.  

 

This option is a weak consideration for me.  I do not believe TASC will more than double its current value within any reasonable time frame especially once its competitor ZAIN comes to the bourse.  TASC should probably lose market share as other telecoms become available.  With AGM a ways out (December most likely) it is risky to hold through AGM and try capitalizing on any 2016 dividend payout.  

 

Sell It

This is probably the most favorable decision for TASC holders seeing how its competitors are poised to come online in the near future.  Even though TASC is hovering around its all time low, it might even fall further once the buzz of ZAIN fills the air.  Letting go of a loser stock is tough to do because of realized losses, but a savvy investor has to know when to call it quits even when quit should have been a long time ago.

 

This is my strongest consideration currently.  I am leaning toward cutting it loose.  Hopefully the dividend payout for 2015 will help recover some of my losses, but it is risky business to continue holding the stock.    

 

What are your thoughts my friends?  

Edited May 28, 2015 by TrinityeXchange

[moneysoon]

Hey Buddy,

 

Sorry to hear about your dilemma. As you know I made the decision to bail after I participated in the AGM. With Zain on the Horizon and the exercise of an active trading strategy, one could recover the difference by selling off now. However, if you have time, you are right, it could gain some momentum. I am of the bird in hand camp though....

[TrinityeXchange]

Hey Buddy,

 

Sorry to hear about your dilemma. As you know I made the decision to bail after I participated in the AGM. With Zain on the Horizon and the exercise of an active trading strategy, one could recover the difference by selling off now. However, if you have time, you are right, it could gain some momentum. I am of the bird in hand camp though....

good for you Money!  i am late but i think you are right.  i am definitely going to learn from the experience of this so that i don't relive it.  thanks for your much valued input my friend.

[moneysoon]

TrinityX,

 

I hope you see that the AGM has been announced with dividends. I do see however, that a mess load was dumped today. I say, get the dividends and get out of Dodge.

[coorslite21]

For what it's worth I would get out of Asia Cell.  I posted just before the initial offering specifics as to why I would stay away then.  It had to do with the number of citizens that already had cell plans, towers etc..  Odd how a country can have so many without electricity, but so many with cell phones. 

 

I believe the banks may have hit their low points at this time.  I know anyone who invested a few years ago, if they held on to them would be down 50% or more.  You might want to look at a few of the banks.

 

This leads to another point, and it is something used commonly with the electronic trading platforms in the larger markets around the world.  I'm sure the regulars on this thread know what a "stop loss" is.  For those that don't:

 

The Stop Loss

 

One of the most commonly used methods for limiting the amount of loss from a declining stock is to place a stop-loss order with your broker. Using this order, the trader will fix the value based on the maximum loss he or she is willing to absorb. Should the last price drop below this value, the stop loss turns into a market order and will be triggered.

 

Even better is a “trailing stop loss”.  This tool tracks the stock and if it goes up 30%, with a trailing stop loss set at 10%, then if the stock drops by that 10% you get out of it with a 20% profit.  The general nature of personal investors is to hold on too long. 

 

It is better to take a small profit, or minimize a loss, and move on.

 

 

The trailing stop offers a clear advantage in that it is more flexible than a fixed stop loss. It is an attractive alternative because it allows the trader to continue protecting his capital if the price drops. But as soon as the price increases, the trailing feature kicks in, allowing for an eventual protection of profit while still reducing the risk to capital

.

I don't know what the various brokers servicing the ISX have available to customers regarding stop loss / trailing stop loss options.  An investor can watch this and do this manually, but it is easier if it’s a built in option.

[moneysoon]

The ISX catfishing club had a fishing derby today. Did anybody attend?

[TrinityeXchange]

TrinityX,

 

I hope you see that the AGM has been announced with dividends. I do see however, that a mess load was dumped today. I say, get the dividends and get out of Dodge.

thanks money.  yes, i am just returning back to the country and saw the news.  i canceled my sell order until the AGM completes.  one thing about asiacell is the nice dividend payouts I have received.  

[TrinityeXchange]

The ISX catfishing club had a fishing derby today. Did anybody attend?

currently taking advantage of the hotel stocks namely HISH and HSAD.  phenomenal buy at these prices i believe.  what are your thoughts on HBAY?  i have never traded this stock but it seems a great buy at its last traded point 66.05.  i know you have traded HBAY in the past and have a better feel for it....i would love your opinion money.

[moneysoon]

Hello TrinityX,

 

I am glad to see some more preliminary steps happening on the ISX. Yes, I am still a fan of HBAY for several reasons. It is a strong buy and hold in my book. I would add this to the portfolio with short plays right before the AGM and long play two years from the next AGM with the collection of AGM benefits and an increased price point.

 

A funny possibility is the launch of ZAIN in the near future. They are pursuing offering this stock altogether differently than TASC.

[TrinityeXchange]

thanks for the feedback money.

[TrinityeXchange]

wow, now i am beginning to wonder if it was coincidence that TASC AGM would be held right before TZNI launches on the 23rd.  highly unlikely.  do this prevents people like me from dumping the stock and missing out on next year's dividends.  

 

brilliant!

[TrinityeXchange]

for those still in this stock, news is reporting that asiacell will be giving free shares instead of dividends this time around.  they haven't disclosed any percentages yet though.