The company will stand to record a contribution of about RM44.19mil to net profit after tax in its financial year ending July 31, 2013 from this court judgment.
“Subject to the execution of the judgment and on the full recovery of the judgment sum awarded to the company and its subsidiary, the financial effects of this judgment on the group (are a) contribution of 99.5 sen to earnings per share and (an) increase of 99.5 sen in net assets of the group,” it told Bursa Malaysia yesterday.
Winning the judgment is one thing. Getting paid is another matter. We should also consider how much of this positive news- even before the favorable judgment was awarded- has been factored into the price. My feeling is that we should take some profit from the recent sharp price run-up.
The chart below is for your guide. We can see that the strong resistance would be at the 2007 high of RM1.80 while the strong support should be at RM1.30. I feel the RM1.70-1.80 should be a good level to take profit while the support at RM1.30 could be a good level for a trading buy.
Chart: Multico's weekly chart as at August 1, 2012 (Source: Quickcharts)
For background of Multico, check out my earlier post in 2010.