We believe the recent selldown provides a good opportunity to accumulate the stock at forward P/E of <7x vs the peer average (in low teens). We upgrade the stock to BUY with unchanged SOP-based TP of MYR3.50 (39% upside). Apart from strong medium-term earnings visibility, it has also laid foundation for the longer term. Mega construction job wins and its ongoing corporate exercise may boost sentiment on the stock.
A lot of people know the theory of sure win strategy: buy low, sell high. In real practice, opportunity already here, its a matter of whether you dare to grab it or not :)
(2*2.60+1.06)/(4+1+1) = 1.04. Minus the exercise price of warrants 1.06 = -0.02 (warrant price). Not logical. Market makers got to push up some more. Eight more market days to do so.
We believe the recent selldown provides a good opportunity to accumulate the stock at forward P/E of < 7x vs the peer average (in low teens). We upgrade the stock to BUY with unchanged SOP-based TP of MYR3.50 (39% upside). Apart from strong medium-term earnings visibility, it has also laid foundation for the longer term. Mega construction job wins and its ongoing corporate exercise may boost sentiment on the stock.
All ex price = (2*2.63+1.06)/(4+1+1) = 1.05. Minus the exercise price of warrants 1.06 = -0.01 (warrant price). Still not logical. Market makers got to push up some more. Six more market days to do so.
We need 2 shares to be splited to 4. And from this 4 shares, we are given 1 free share. That is why we multiply 2 with the last price, i.e. 2 X RM2.63 and we got 4 splited shares plus one free share. Apart from this, we need to pay for the warrant at the exercise price of RM1.06 and we add 1 warrant to the 4 + 1 shares just now. This is how we got the new ex price.
Warrant + exercise price = Mother share price or Warrant = Mother share price - exercise price, i.e. RM1.05 - RM1.06 = -RM0.01 which is illogical because it is negative. So, market makers got to push up the price so that the numerator is bigger.
But in some shares, the market maker can manipulate the warrant. First they add 20% premium to the mother share, i.e. (120/100) X RM1.05 = RM1.26. Then warrant price = RM1.26 - RM1.06 = RM0.20. Then if the market is good, this RM0.20 might hit limit up twice, i.e. 1.3 X 1.3 X RM0.20 = RM0.338.
@ 8wpwtmt8 its not illogical... Just its mean that people wont covert the warrant to share yet because the exercise price is higher. When the mother share price move above 1.06 than the warrant will become attractive and the people will pay the premium to buy ur warrant.. so the mother share price move higher ur warrant is much more valueble ^^
The stock is obvious oversold so is normal it rebound... But be carefull not to chase cos it might drag down by BB to wash out contra players... My advise is dont play contra... only invest into this stock^^
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
PlsGiveBonus
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Posted by PlsGiveBonus > 2016-11-14 12:42 | Report Abuse
Hope more margin calls followed by this week