Recently, share prices of glove-companies had experienced some great fall.
I had decided to take the opportunity, and already bought in 1000 unit of Kossan on Friday.
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Why choose Kossan instead of Harta?
Diversification.
Hartalega is still my favorite glove-stock now. However, it had already made up 25% of my total portfolio value. Further increase in the weight will make me feel uncomfortable. Thus, I decided to buy in other glove-maker, in order to have some diversification.
Now that Harta and Kossan together form about 30% of my portfolio value. This already near my upper-limit. I will stop buying any glove-company in future, until their weight in my portfolio drop into a more comfortable level, e.g. 20~25%.
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Why choose Kossan instead of Topglov or Supermax？
I'm in opinion that all these three companies are great for investment. In fact, I often recommend people buying (diversify) into all these 3 companies.
There are two reason why I choose Kossan among the top-three's.
First and the main reason, I'm more favor into nitrile glove makers (that's why I invested in Hartalega). Among these 3 companies, Kossan has highest exposure into the nitrile glove market -- 40% of its revenue are from nitrile-glove. And I believe that the ratio will increase further in the coming years.
2nd reason, Kossan has a lowest PE among three companies. Now, the prospect of these companies are all great. However, people may loose interest on them if their growing pace slow down in the future. And this may lead to a lower appraisal of their values and share prices. For me, Kossan's lower PE means a higher safety-margin.
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