Recovery stocks massacred. Money rotating to stocks with true value !

first target RM5.15...if that breaks then maybe can be more ambitious la...aim RM8

Comfort started movement upwards a week or two after QR the last 3 times...you guys just have look at the charts and you would know...don't be fooled by these naysayers who know this as truth and are trying to catch at lower prices. Comfort is currently at a very strong support region. Just a matter of time.

Good luck guys !

I concur. There may be a big investor coming in, as the sale of the treasury shares were done in big blocks and certainly not sold to Ikan bilis. I saw it on the trading screen, right in front of my eyes.

As for the personal sales, I would monitor closely and not be alarmed as he still does have 50% of the business. And I would say it’s done at the best time without rattling the stock. It’s done at a time when trailing PE is low, profits are high and going to continue to be high, with additional capacity coming on board. That was why the sale was absorbed very comfortably.

Technically, the strong support is at the 1.90 region and perhaps to the recent low around 1.80. Anything above those points, I would not be concerned. In any case if you’re a mid to long term investor, you’d be focused on the massive capacity expansion which would offset any drop in ASPs after then pandemic is over.

In short, we’re looking at sustainable earnings in the long run, and the price is attractive. Have a great weekend !

Reminder:
1) ruberex is at 21 trailing PE. By next result would be lower teens. Don’t even talk about forward PE
2) next result going to be phenomenal
a) increase ASP
b) with additional capacity focused on Nitrile gloves
3) the stock is more or less cornered
4) the owner is aggressive in growth and stock movement
5) this stock has corrected >30% from the high. If not bottom, it’s close la.
6) everyone, and most of all the owner, is out to make money.

Just waiting for instructions from Santa to take off.

awesome Edwin, I wish you luck !

Syed Saadiq is a member of the opposition, he's not "the opposition". There are many other more business savvy people that are in touch with reality and not focused totally on being popular in the opposition. Furthermore, the 4.8 billion is a number pulled out of his arse. That's not realistic at all. Even if they do have a windfall tax, it would be negotiated...5%? 10%?

Heck, TG may even be losing 5% from this Covid issue in it's factory right now ! Does it dent its profits much?! No....Granted, it may have a knee jerk effect, but so what? It'll bounce back. It's still worth a helluva lot ! Those with brains know how to see value.

The choice is yours

Unfortunately, until there’s a decoupling, every other glove company is going to catch a cold whenever TG sneezes. Hope the decoupling happens, and common sense prevails.

The glove sector needs to have a decoupling from TG. Every bad situation TG finds itself in affects the rest. In this case, companies like Ruberex are collateral damage. It’s factory is in Perak, for heaven’s sake. Hahaha

@justtry19, my apologies. Just wanted to check whether you were on this planet the last one to three week when the gloves were pummeled with vaccine news. Most of the counters are down 28-36%. What smart move are you referring to?

32 million shares is definitely not to some tom dick or harry !

Main question is who's the buyer?

The Dow is close to it’s all time highs even when it’s hardly started on the so called recovery story. How wildly overvalued it is. It’s like riding a motorbike at 100 miles per hour, hoping you don’t hit a pebble on the road.

Wannabe glove counters like AT have been flying even when they haven’t even started producing.

Moral of the story:
1) it’s all about the narrative, the story, the flavor of the day. Narratives change according to the whims and fancies of the market makers. Let’s see how much higher the US markets go before they say it’s overheated. Then what happens to the other markets? The so called recovery story.

2) How can genuine glove companies be dead when wannabe gloves are still alive and kicking?

Which is riskier at this moment? To bet on an airline that may go bust before the vaccine works or betting on something that will be at a low PE for the next 12-18 months? Yes, markets look forward, but let’s see how far forward it looks when all the recovery stocks report their earnings this coming quarter.

Frankly, if topglove or Supermax starts running up emphatically, do you think there won’t be tonnes of people on the sidelines jumping in solely for the fear of missing out?

Hahaha we shall see. Hate it or love it. Only price action will tell us who is right...good luck to both sides.

haters will be haters, supporters will be supporters...let the price action decide the debate ! Have a great weekend all ! Even the haters. :)

The chance of supermx hitting limit down is as high as Trump remaining as POTUS

Thanks for your opinion Edwin.

There’s a reason why DJoker89 came back in. For reasons stated above !

Too many things going for it, that it’s worth a bet, vaccine or no vaccine.

Low PE
Strong earnings visibility for the next year
Currently, sitting on 100 day moving average line. The last rebound happened at this point.
Also sitting on the trendline.

If there’s a time to bet. This is the time. It’s a calculated risk !

The choice is always yours.

I believe we’re at the cusp of a new wave. Driven by
1) KLCI inclusion/review
2) Dividend ex in a few weeks
3) A massive explosion of Covid and ensuing headlines

Good luck !

Last chance to board the train cheap? Inverted head and shoulder forming? We shall see. All the best guys !

1) technicals looking positive (with a 3 month consolidation period behind us)
2) incredible fundamentals
3) all timed to perfection with KLCI inclusion imminent in Nov and dividend in Dec and new highs in Covid cases worldwide - only to get worse.

Do you really want sellers remorse?

inverted head and shoulder? Topglove, Supermx and Comfort? Breakout soon...we shall see

1) has been consolidating for 3 months...
2) trailing PE has reduced to 20x in that time
3) still a few quarters of phenomenal numbers to come

and you guys want to sell?! Good luck with sellers remorse

Are all the sell on news robots done yet? We shall see

If I were the funds, I’d collect at these levels, wait for those who, like robots, sell on news, and push up thereafter.

@johnny cash, 20th Oct

I have both Ruberex and Comfort...as I've posted before, Ruberex is holding better because the owner has cornered the stock...is more aggressive, and the stock has a doubling story...that being said...if one runs, I hope all will run...

1) strong EPS, with capacity expansion story in Q4.
2) Owner and company keeps buying back
3) Bonus issue coming up
4) Technically looking quite good
5) Owner appears to have cornered the stock and taking steps to raise the prospects of the company.

Definitely a dark horse in this race...will surprise many, is my guess.

So many good things about the article shared by High5.

Besides the optimisation of capacity, I think it's important to note that they are locking in commitment for the next 18 months ! The earnings visibility is amazing for all glove companies...

@Primeinvestor - Yea, the outlook provided by the management is very positive...

Awesome results:

Assume 4 quarters of the same results (not factoring in any growth)
7.34 x 4 Q = 29.36 EPS
20 PE = 29.36 x 20 = RM5.87

If we factor in a little growth

25 PE = RM7.34

Current running PE (based on EPS of the last 4 quarters) = 31.35

To put it in perspective, the running PE for the rest that have just reported their earnings:
Ruberex = 36 PE
Carepls = 50 PE
Harta = 86 PE
Kossan = 57 PE
Supermx = 47 PE
TopGlov (has not reported their latest earnings yet)

Comfort is clearly oversold and undervalued in relative terms, at the moment.

End of the day, it’s about earnings. If ASPs are raised as per other companies that have reported, doubling or tripling last quarter is very possible.

Short term catalysts:

1) TG Earnings report
2) TG US customs resolution
3) Comfort earnings report (should be good, hope it'll be great)
4) Perhaps early reporting of Supermax results in October (yet to be seen)

Short term catalysts:

1) TG Earnings report
2) TG US customs resolution
3) Perhaps early reporting of Supermax results in October (yet to be seen)

Supermx dividends to come and Ruberex bonus issue to come

US hits >50k new cases...first time in 20 days...and this hasn't taken into consideration Labor day holidays on the 7th Sept. Not to mention, autumn and winter is coming...

France and Spain also reporting new highs since their lockdowns...

https://www.channelnewsasia.com/news/world/covid-19-surgical-gloves-pp...

"As a result, customers must now wait nearly 600 days for their orders to be filled, compared with a normal delivery time of 30 to 40 days, said chief executive, Lim Wee Chai."

600 days!!!...imagine the earnings visibility...

https://www.channelnewsasia.com/news/world/covid-19-surgical-gloves-pp...

"As a result, customers must now wait nearly 600 days for their orders to be filled, compared with a normal delivery time of 30 to 40 days, said chief executive, Lim Wee Chai."

600 days!!!...imagine the earnings visibility...

A 15% increase in ASP could double their profits. Assume that’s the case. That’ll be 5.6 EPS

Assume they do the same for the next 4 quarters
5.6 x 4 = 22.4

Assume 20 PE
22.4 x 20 = RM4.48.

Regardless of whatever is happening in the shareholding, this is its potential.

The current price is not overinflated at all. Are there other glove stocks with greater potential? Of course. Is this a bad stock to hold? Or course not.

If they raised their ASP by 30%, the earnings would be significantly more.

The current malaise in the market is affecting all stocks, not only gloves. Once sentiments get better, hopefully we see all glove counters recover strongly.

Just my opinion.

This counter really mysterious. Also brutal. Move up fast but also can retrace all the way back to square one. Can make shareholders crazy.

@kens88, yes, comfort has lots of potential to make quite a bit if they raise their average ASPs, even by 30%, due to their much larger capacity.

https://www.thestar.com.my/news/world/2020/09/04/widespread-covid-vaccinations-not-expected-until-mid-2021-who-says

The current correction is broadbased, not only confined to rubber gloves, although the latter is hard hit due to it's huge moves over the last few months. Frankly, the glove sector is the only sector we know will be making tonnes of money the coming quarters. Best of all, it is not rocket science to try to guess their earnings...easy also because you know they are running at full capacity...the only missing element is their Average ASPs (even then, it can be estimated)...In my opinion, there's still upside...of course there will be noise on vaccines coming up to disrupt things here and there...it's up to you ! Do you believe:

1) an effective vaccine will be produced by end of this year?
2) the companies will be able to make billions of shots within the year?
3) people will trust the safety of the vaccine? Hence, will they want to be jabbed with something unproven by time and proper testing?

The choice is on each investor...

kens88 - based on current Price to Earnings Ratio, Ruberex is among the most attractive...it also has capacity growth in the pipeline (end of the year). If you check my earlier postings, you will see why it is one of the more appealing Rubber gloves companies, although it is not covered as much by analysts and IBs. Flying under the radar, so to speak. Just my opinion...

@axecapital - it depends on the ASPs...if they have similar ASP growths as Ruberex, I believe they can achieve 50mil...however, not sure if they have the power to raise prices...let's see ! Fingers crossed !

I believe the expanded capacity will only kick in Q4 2020. Currently, I believe it's still 1 billion pieces per annum. Can you imagine the potential?

The people operating this counter are ruthless, brutal, vicious...push it up and bring it back down to square one...the good thing going for it is Ruberex had just delivered a good quarterly result. Once, Ruberex starts to run, hopefully it will bring comfort along for the ride.

Hopefully, comfort is able to do at least RM45 million this coming QR...very very possible if they are able to raise their average selling price.

Don’t think it’ll be at 6 at ex date, making it 2. Likely be at 9, making it 3...even then, ex date may be a month or more down the road?

8.69 x 4 = 34.76
Assuming next 4 quarters can do the same
34.76 x 20 PE = RM6.95

I did the above earlier...that assumes no growth...but if there's a doubling of capacity...i don't think 30PE would be unfair...

34.76 x 25 PE = RM8.69

To keep it conservative...i won't do a 30 PE

if the results is so bad, it wouldn't be where it is now...in fact, it's an opportunity to buy before sentiments get better for gloves...

don't worry gemfinder, with the sentiments currently, i think you'll still be able to get in cheap...