First look at Food Junction

While I enjoy food, I do not like F&B stocks in general. I feel that the upside surprise would always be capped due to rising cost such as rental cost. At the same time, there is no protection against downside. So this is the first time I look at Food Junction, not vested at the moment.

From 2005 till mid 2008, Food Junction hovered between $0.6 to $0.7. It is now $0.255. Lippo owns about 58% of Food Junction through APG.

Food Junction seems to be in an uptrend, trading above the 20MA and 50MA, however the volume does not seem to suggest a big accumulation. There isn't any announcement of any trading by major shareholders.

Profit margin continues to decline from 19.7% in FY2006 to 8.7% in FY2009. Operation in China, which contributes 10.8% revenue, is still not profitable.

EPS FY2009 is 3.34 cents, translating to a trailing PE of 7.6. NTA is 18.66 cents.

Lacking potential upside, it is just not align to my strategy yet.