Many people in my chat group wanted to know if we can take advantage of Top Glove’s price plunge to make some money.

Top Glove

The 1-month price chart shows it has dropped from Rm 8.90 to close Rm 6.65, a drop of 25%.

Its latest quarter ending August EPS was 15.95 sen and its previous quarter EPS was 6.80 sen, an increase of 135%.

Just assumed that it cannot increase its selling price for its gloves, its EPS for the next 4 quarters will be 15.95 X 4 = 63.8 sen

Based on PE 15 X 63.80 = Rm 9.57, its target price.    

Supermax

For comparison I will use the same way I used to calculate the target price for Top Glove.

The 1-month price chart shows that it has dropped from Rm 9.85 to close at Rm 8.08, a drop of 18%.

Its latest quarter ending September EPS was 30.58 sen and its previous quarter was 15.29 sen, an increase of 100%.

Just assumed that it cannot increase its selling price for its gloves, its EPS for the next 4 quarters will be 30.58 X 4 = Rm 1.22

Based on PE 15 X Rm 1.22 = Rm 18.30, its target price.