Thursday, 28 August 2014

Presbhd - bruised but certainly not out

Admittedly, this month is not a good month for Presbhd. As usual, many analysts have come out to caution about the company's missed earning target. If one were to go by purely on the analyst's call, one would be very busy buying and selling stock. Is this not will make us a short term player? In fact analyst will give out recommendation every 3 months or so which is coincide with the quarterly reporting session. It means that if one is to strictly follow this routine, one will end up buying or selling every 3 months or so. And this of course will make your broker very happy. Imagine if you only make investment action to buy or sell once every year, your broker will be out of business very soon. Of course, there is nothing wrong for these analysts to chunk out report after report. After all, it is their job to do so. But think about this. Have you ever wonder why analysts or research houses are so generous to publish their reports for the public to read for free? Ain't these reports are meant for their private investors or clients only? Or are they truly doing it for free public service so that everyone can make money together? If everyone makes money, who loses money then?

 

Yes. Presbhd stock price takes a beating recently particularly the last two days. This mainly because the quarterly earning results is not so good, so the analyst said. Let's take a deep breath and relook at the profit numbers for the last 4 quarters : 14Q2 (7.0mil), 14Q1 (6.4mil), 13Q4 (10.7mil) and 13Q3 (12.3mil). I concluded that the numbers are decent. And don't forget, the dividend keeps flowing in.

 

In conclusion. What I am saying is that the decision to buy or sell or hold is entirely yours which must be based on your investment goal. Certainly investment goal is not and must not depends purely on analyst's report alone. What happen if one analyst says buy and another analyst says hold and analyst says sell. I, for one, will never sell just because one quarter results did not meet the target (who decides the this target anyway). As long as the business structure of the company does not changed, there is no reason for me to follow the analyst's report. Be patient. It is not end of the world.

 

Good luck.

 

Its price closed at RM1.90 on 28.08.2014.



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