RGB (Trading Buy, TP@RM0.32). After undergoing a month of consolidation period, RGB had regained investors' interest to stage a technical breakout by surging 2.5 sen (9.62%) to RM0.285. With the stock trading above all its key moving averages while MACD histogram is portraying a bullish crossover above its signal line, RGB is poised to test its immediate resistance level of RM0.295/RM0.30 (R1) soon. If the stock managed to take out the psychological S1 level swiftly, further upside is envisaged at RM0.32 further (3 bids below RM0.335 (R2)). Immediate support level is noted at RM0.27 ( S1) and to be followed by RM0.245 (S2), while the stop-loss level is placed at RM0.255 (3 bids below S1
For my opinion, RGB is definitely undervalue, with its latest annualised FY16 EPS, its PE is only around 12. Some said small company with PE 12-13 is not cheap, but if you study the Bursa, there are many small companies with losses, but their share prices more than 50sen. Moreover, RGB settles its debts of more than 100mil within 3 years, this proves that the company cash flow is very strong.
Therefore, within 2 years to achieve share price of 60sen is possible. A company with low PE, strong cash flow, and good prospect with current share price below 30sen, I think is not easy to find in Bursa nowaday.
I think the company also realise the risk with too focus on few countries, that is why RGB is exploring new markets i.e South America and Europe.
It the latest news by The Star, RGB is confident FY17 can achieve double digit growth, this driven by its new geographical markets. The new markets could means South America and Europe.
the one big complain that most people have with this company is the low dividend compared to its extremely strong cash flow. the directors need to tackle this issue.
thts why i said previousl years acceptable low div as parring down debts, borrowing. next yr they should give higher div. if they not willing to share profit with minority, then sadly i might need to reduce exposure here
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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....
supermx2
1,885 posts
Posted by supermx2 > 2016-12-19 16:17 | Report Abuse
Faizal, RGB got news?