I read Alex Tan’s article on ROE in which he is not supporting Gadang but Ooi Teik Bee is supporting. Their statements on Gadang in i3investor.com quote

I am writing this article to share my opinion. Of course, on hind side and looking at the chart, it is easy to see what was the right thing to do. But if you did not do what you should have done, you must sell now before you lose more money.

The above chart shows that the price of Gadang started falling sharply when the company announced its 1^st quarter EPS of 6.5 sen on 27^th Oct. Many shareholders refused to cut loss and many bought for the bonus shares and warrants and split of shares. But the share price continues to drop on 28^th Nov when the new split and bonus shares were listed. It continues to fall every day.

GOD only knows when it will stop falling and reverses its down trend.

There are obviously more sellers than buyers which causes the price to fall. If you were holding some Gadang shares, you should have started selling when the shocking profit was announced on 27^th OCT. You should continue selling even when you received the split and bonus shares because you do not know when the trend will reverse so that you can sell at a higher price.  

The cut loss policy is good to reduce losses but it is not so easy to execute because some investors cannot overcome their pride and ego to admit their mistakes.

However, they must remember that Gadang will not be able to make more money this year than last financial year basing on the remaining Rm 600 million value of contract works it has and its poor property development business outlook.

Its annual profit for last financial year was Rm 94 million and its 1^st quarter profit of Rm 16.7 million. I cannot see how Gadang can make more profit in this current financial year than last financial year.

Many optimistic speculators like to believe Gadang will secure one of the remaining contract packages of the MRT2 project and it can derive sufficient profit to beat its last year’s profit.

From my long experience in the contracting industry, I can say Gadang is very desperate to get some contract works to pay for its fixed operating cost and salary for all its permanent staff. Bearing in mind that Gadang has not been successful in several previous tenders it would have to lower its tender price further in trying to secure one of the three remaining contract packages of the MRT2 project.

Even if Gadang can get one of the remaining contracts and even if it can make profit, the profit will not come in on time for this current financial year.   

When Gadang announces its annual profit which will be less than its profit for the last financial year, its price will drop further.

Have you seen the price of any company goes up when the company reports reduced profit? 

Final decision is yours