Don't purely look at the price la. You see what is the price of Superlon....is it at sky high? What we appreciate is its double digit business growth potential. Some more, Tguan is among the cheapest companies in plastic packaging in term of PER.
KLCI is too expensive to invest with over PER 16x. When our local funds and EPF dump the shares, KLCI would stay below 1000 points. Better sell all the shares now and keep cash in the banks. Be careful of the bank NPL, our RM and bank might collapse one day. So better migrate all the money to overseas accounts..Oh No! world economy may not doing well, recessions, depression coming. DJ index may plunge below 10k .... No ending pessimism. Lol
It is not surprising to find company management talking about trying to be a 1 billion company, share price undervalued, let's do bonus or share split etc.
Does all these really that matter? The role of mgt is to be a great capital allocator. To ensure they can continue to earn economic profit aka widening spread between ROIC and WACC. As long the market is not rigged, market force in due time will ascribe the right price to the stock.
I've never heard Dlady complained they have tight liquidity for their 64 mil outstanding shares. This isn't a critic about the company doing something bad on the business end, but rather a critic on the mindset of mgt once they started to see their company is doing well.
The mgt wants to solve liquidity issue, hence with share split or bonus issue and promote more of the company to institutions and retail investors seem like the way to go. Higher valuation is also what the mgt wants to achieve and this also will benefit investors. I think is a win-win situation and not necessary to compare with other companies as each has its own objectives and in different situations.
It is a win-win if they successfully done so. Plenty of research have proven that these corporate actions yield nothing but a distraction to the actual business. Again investors aren't that 'dumb' because of liquidity issue theyre willing to give up the chance of owning the stock, the reverse is true too that investors aint 'dumb' too just because liquidity has been solved suddenly the stock valuation will improve.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
soros228
2,039 posts
Posted by soros228 > 2016-06-29 13:58 | Report Abuse
Huat ah