As all investors should know that due to Covid 19 pandemic the demand for gloves far exceeds supply. As a result, the price for gloves continues to go higher and higher and all glove manufacturers are making increasing profit which is being reflected on their share prices. Among all the glove makers, I consider Comfort has the best profit growth prospect which is the most powerful catalyst to push up share price. Comfort’s financial ends in January 2020. Since February the company has added 6 new production lines to its original 49 lines. The increase production is most timely to take advantage of the higher selling prices of their gloves. Unfortunately, Comfort is relatively a small manufacturer and it does not have so much of publicity as Supermax which has shot up Rm 1.15 today. Today Comfort went up 22 sen.
From my experience during the SARS pandemic when I was the 2nd largest shareholder, I noticed that the demand for gloves would continue even after the Covid 19 pandemic was under control because the people who needed to use gloves got used to the routine of using gloves. In any case, many scientists predicted Covid 19 pandemic will not be under control for at least another year until a vaccine is approved by FDA.
US Import Alert
Some investors might be concerned about the US Import alert warning published on 25 May 2020 to control the quality of imported gloves to US. This is a general notice and Comfort is not specifically mentioned. In any case, US is not the only buyer of gloves. Comfort can sell to China, Europe and many other countries.
Dato Lau Eng Guang selling
Some investors might be concerned by the sale of shares by Dato Lau Eng Guang, He has been selling a couple of million shares a day. He sold a total of 13,750,000 shares which could not have dampened the share price because the daily traded volume is 80-100 million.
Institutional Investors:
Institutional investors usually hold many counters in their portfolio. Most of their holdings are being depressed by Covid 19 and they have to sell to cut loss. There are not many stocks for them to buy except Comfort, Supermax etc. That is why the daily traded volume is 80 to 100 million shares. This shows that many rich institutional investors are interested in this stock.
My purpose of writing this piece is help readers to make good decisions. You must remember, whether you buy or sell does not make any difference because the daily volume is so huge.
What you should do?
I see from the i3investors forum, some commentators are wishing the price to go up, some are wishing the price to drop and some are so confused and they do not know what to do. Since it has been fluctuating quite wildly, day traders can buy and sell to make some money. But remember, long term investors can make more money by just buy and wait for it to go high and higher until the demand for gloves is reduced or when the company starts to report a reduced profit. You should not sell as long as the company can continue to report increasing profit.
I have Mr Ooi Teik Bee’s permission to publish a large part of his weekly recommendations to his subscribers as follows:
TA reading
3 important features appeared in the technical chart
FA of Comfort
Please read the below link for quarter results.
How I derive Profit before tax of 216 million in FY 2021
Stock |
Year |
Price |
Revenue |
PAT |
EPS |
PER |
Target price |
Gain % |
Comfort |
2021 |
2.05 |
556 |
162 |
0.28 |
7.38 |
5.56 |
171% |
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