Yo Zam, the stock is fundamentally strong? The first half year results certainly did not showed it. Revenue dropped, profit dropped. Cash and cash equivalents are only RM525k! as at 30 June 2013.
Its related stocks in ASX are all loss-making with very high valuations. The cases of Asiasons, Liongold and Blumont should be a reminder that strong fundamental stocks are safer bets.
Regarding the merger, Catcha needs to pay out RM6.0mil cash (besides the issuance of shares in the new holding company) as settlement for the merger. Looking at its 1H2013 financial results, Catcha does not seems to have enough cash to pay (cash and cash equivalent as at 30 June 2013 is only RM525k!).
Reply to Whkwoon - You are referring to which company's present Directors & Shareholders? If you are referring to Catcha's, are you saying the company's present Directors & Shareholders are very "special" people? I'm not saying this counter is not worth trading but to say this counter is a fundamental stock, it is rather not accurate based on its past and most recent quarter financial performance & position. The whole Group (Malaysia and Australia) has been relying on acquisition to grow (pls check out their announcements and disclosures). The acquisitions were mostly using share swaps and cash from IPO proceeds. They are not generating cash fast enough.
Pls back up your comment such as "..should go up further still very cheap.." with reasoning like why it is still very cheap?
This merger is old news. The reason why it has been talked again recently is because after many months, the merger is finally completed from a legal perspective. This is the merger where Catcha needs to pay out RM6.0mil cash (plus shares in the new holding company) for settlement. The company has got minimal cash (based on its latest disclosed financial results) to pay unless rights issue, selling off its investments or taking out a loan. Catcha has until end of the year to pay the cash.
As mentioned earlier, the whole group (including related ASX listed companies) has been aggressively doing acquisitions. Nothing wrong with it if the acquisitions are meant to further strengthen the core businesses or to diversify the core businesses into other higher growth businesses. But if the acquisitions were done to "save" or to "cover for" unsustainable core businesses, then the value proposition of the stock (including the related ASX counters) needs to be examined further. So now, which is the case for this particular group (i.e. "acquire to grow" or "acquire just to keep the house of cards from falling")? You draw your own conclusion.
Also, check out disclosures of certain management team members' disposal of this stock (i.e. Catcha Media). This can perhaps give you a better feel of the company.
reply to kengteck68: The Company's related ASX counters (i.e. iCar and iProperty) are at all time highs. However, these high valuations were achieved on relatively low volume. If you look at the historical price charts, you'll notice the prices steadily increased and then out of a sudden, a larger than usual volume (although larger but still small in absolute terms) is transacted. The prices then go steady again with low volume until the next spurt in volume and price.
If you have followed certain local analysts' report on the Company, the main argument of why the Company is undervalued is because the Company's investment in iCar is already made up of the entire market cap of the Company. With the above situation (i.e. high valuations with low volume on top of dismal financial performances), one has to think again whether the Company's investment is "cashable" within a market support level which still cannot be firmly ascertained. The most likely scenario that the investment can be cashed out at such high valuations is when there is a very gung-ho M&A player (i.e. total buyout).
Does all the above sounds similar? When one trades stocks and makes money, one has to know why. When one trades stocks and loses money, one also has to know why. Don't trade blindly is the name of the game.
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....
JTFX
1,582 posts
Posted by JTFX > 2013-07-16 21:38 | Report Abuse
same fckg kanasai Director still disposing...