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Author: BURSAMASTER   |   Latest post: Sun, 25 Oct 2020, 7:31 PM

 

PARAMON - INVESTORS SHOULD BE LOOKING OUT FOR THIS UNDERVALUED STOCK !!!

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PARAMON - INVESTORS SHOULD BE LOOKING OUT FOR THIS

UNDERVALUED STOCK !!!

Hello to all readers out there. In recent weeks, I saw that investors have been bargain hunting for stocks which are undervalued. One of the criteria to look at is the stock Net Tangible Asset (NTA).

Having said the above, the stock which I'd like to talk about today is PARAMOUNT CORPORATION BERHAD (PARAMON - Stock Code 1724, Main Market, Property)

 

BASIC INFORMATION ABOUT PARAMON

PARAMON was listed in BSKL in 1971,  with core business in:

i) Property Development 

i) Coworking Space

Market Capitalization : RM 448.54 million

Shares Float : 614.44 million

Website : https://www.pcb.my/

 

 

1. TRADING AT 68.5% DISCOUNT TO ITS NTA OF RM 2.32 !!!

Below is summary of PARAMON latest quarter results. The loss in Q2 of the year which was caused by the Movement Control Order (MCO), which made the company lose 2 months construction revenue due to closure of sites. This had caused the price of the stock to dive down to its recent low.

However, we notice that the NTA stands at RM 2.32. As at the latest closing price of 73c, this means that the stock is trading at 68.5% discount to its total NTA. Some long term investors might view this stock as undervalued and a bargain at current market.

 

2. ASSETS RM 2.7 BILLION VERSUS LIABILITIES RM 1 BILLION !!!

Refer below snapshot of the Assets Versus Liabilities summary taken from the latest QR.

As we can see, the total Assets stood at RM 2.7 billion, and total Liabilities stood at RM 1 billion.

Therefore, this means that the total Assets exceed the Liabilities by about RM 1.7 billion, which shows the company is a net asset company.

Also, cash position improved to RM 324 million cash compared to RM 135 million in the same quarter last year.

Take note that the company cash amount of RM 324 million, is equivalent to cash per unit of 52.7c, which is about 72% of its total market cap. Therefore, I believe that this company should not have any problems weathering the COVID19 storm.

 

 

3. TECHNICAL ANALYSIS - LOW RISK ENTRY, LOW DOWNSIDE, HIGH

UPSIDE POTENTIAL

Refer below the basic price and volume chart with key EMAs for PARAMON daily chart :

 

A few observations on the daily chart:

i. Refer Circle 1, there was a surge of volume entering this stock in June 2020, which caused prices to spike above the support line S1

ii. Refer Circle 2, price reached a year high of RM 1 at the Resistance, R2 before reversing downwards

iii. Refer Circle 3 & 4, where the price had retraced back to the S1 support line, and seems like buyers are rejecting further lower prices as there are strong buyers waiting up to support at 71-73c range. Volumes of sellers are also deteriorating

iv. Should buyers be interested in this stock, we might see an upmove back to test the R1 resistance around 85c, then R2 resistance at RM 1, before breaking upwards

 

4. LOWER CAPITAL ENTRY INTO PARAMON VIA PARAMON-WA

Refer below the basic profile of PARAMON-WA, for investors looking at a cheaper entry into the company :

A few observations:

i. Maturiy of the warrant is July 2024 (45 months life), which means a long time to go before expiry

ii. Premium of the stock is 159%, with strike price of RM 1.79, which is reasonable considering that the warrant still has 45 months life

iii. Latest closing price of the warrant is 10.5c, which allows for a cheaper entry as compared to the mother share of 73c.

 

CONCLUSION

Considering all the above, I opine that current price for PARAMON is attractive due to below:

i) Trading at 68.5% discount to its NTA

ii) Net asset versus liabilities of RM 1.7 billion showing a healthy asset backing

iii) Net cash of RM 324 million (52.7c per share)

iii) Chart showing low downside, and high upside potential

 

LET’S SEE HOW THE SHARE PRICE MOVEMENT IN THE NEAR FUTURE FORBEARING ANY GOOD CORPORATE NEWS.

Disclaimer : The above opinion is never intended to be a BUY CALL whatsoever. I am sharing my observations ONLY based on fundamental; past history; current trading pattern; charts etc. Please make your own informed decision before buying this share or whatever share for that matter.

BURSAMASTER

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  Be the first to like this.
 
CHONG Kong Hui Value trapped in the NTA, not good for small investors.
17/10/2020 8:40 PM
bitzero It's downtrend
17/10/2020 9:09 PM
Mcaresdk91 TA ,OBV downtred, momentum negative not good signs.rating 1 star.
17/10/2020 9:52 PM
greedy44444 Property stocks are dead...at least for two more years
17/10/2020 11:03 PM
SultanMelaka chee sin
18/10/2020 2:02 AM
VICTORYU37007 venture into health care gloves..
18/10/2020 8:07 AM
rogers123 Ur TA such
18/10/2020 10:50 AM
stockraider VERY IMPORTANT TRAINING POINT FOR SUCCESSFUL INVESTOR LIKE HAVING THOMAS EDISON SUCCESSFUL ATTITUDE LOH...!!

Posted by stockraider > Oct 18, 2020 11:27 AM | Report Abuse X

Just look at sifu calvin positive comment very smooth & practical mah..!

Not like sohai 3iii DO NOT understand "CASH is CASH" talking cock & misleading the readers loh...!!

As sohai mike...he is bitchy pondan with one only objective in mind..attack sifu calvin no matter what at all cost loh..!!

Come to scenery, he is just a newbies scare of everything including his own shadow loh..! Raider just forgive him being new loh..!!

U ALL MUST TRY TO EMULATE THOMAS EDISON SUCCESSFUL ATTITUDE OF NEVER GIVE UP MAH..!! REMEMBER SUCCESS IS BUILT WITH ALOTS OF PAIN A MAN ENDURE LOH!

Posted by calvintaneng > Oct 17, 2020 11:44 PM | Report Abuse

Dlady crashed from rm76,000 to Rm38,000 wiped off Rm38,000 more devastating for many more than Netx

What is Netx ?

Netx is a disruptive technology

The arrival of the 1st motor car wiped off thousands of years of chariots and horse drawn carriages

After 299 failures Thomas Edison invested the light bulb

Whole world laughed at him failing 299 times over but Edision Electric now General Electric is a household word in USA

From earliest time people used naked flame to light their homes

Today we have electric light. Later with new tech battery we put light in a torch

So is gardenia bread , grab taxi, grab food and Ecommerce

So will be Netx the new tech company

Doubters can get lost and go hide in dinosaur cave

We believe in Netx
18/10/2020 11:37 AM
sensonic TOMORROW NEW IPO ANEKA JARINGAN EXPECTED TO OPEN AT RM 0.40 ?
19/10/2020 10:40 PM


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