However, there are also a few lame ducks that had also rallied during this period. One of them is IRCB. This is a stock which has been consistently making losses in the past 3 years: RM38 million in FYE31/1/2011; RM24 million in FYE31/1/2012; and RM39 million in FYE31/1/2013. In 1Q2014, it again reported a net loss of RM10 million. IRCB, a stock with a 20-sen par value , has seen its NTA p.s. trimmed to only 7 sen due to its persistent poor financial performance.
From the chart, we can see that IRCB may have broken above the strong resistance at RM0.35. Its next resistance will be at RM0.55. What could possibly be driving this stock higher?
Chart: IRCB's weekly chart as at Sept 5, 2013_3.30pm (Source: Quickcharts)
Notwithstanding the promising technical outlook, investors should be very careful when trading in IRCB. From the fundamental point of view, IRCB is now trading well above its fair value and should best be AVOIDED.
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, IRCB.
2 comments:
Hi Alex
Do you have any investment idea on YTLP recent cancelled its 3.3% treasury share?
I'm suspecting YTLP opt to cancel the treasury rather than redistribute back to shareholder could be strategy to privatize YTLP through share swap with YTL.
This is because by cancel the share, it essentially reduce the number of YTL share to be issue under share swap, reduce dilute effect of Yeoh family stake in YTLcorp, and increase value of Yeoh family direct stake in YTLP and YTLP-WB
I'm expecting YTLP likely will keep buyback its share from open market and cancel it later in order to achieve targeted exchange ratio.
Hi Hng,
I think the scenario as painted by you may not pan out. Canceling Treasury stocks is not an entirely negative thing. With less shares outstanding, EPS will increase and hopefully the share price will do the same.
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