1.This is a good one. At 68sen it is trading at PE less than 4x and 38% of its NTA of Rm1.78
2.The company was quite resilient and even in the pandemic year 2020 was able to generate a profit of 13m. For financial year ending 2021 it has produced an incredibly impressive profit performance of 75m. That was a more than 5 fold jump in profitability.
3. For 2021, Engtex generated a remarkable net cash of 110m from operation. It has a strong current ratio and satisfied sufficiently its working capital requirement.
4The company's borrowing has continually reduced and is now in a comfortably manageable level. 5 The EPS for 2021 is 17sen. Traditionally Engtex will announce dividend in the month of April. Assuming it retains 80% profit for future growth and distribute 20% of profit, it would be 3.4sen. At 68sen the divident yield is potentially 5%.
5The company has cash on hand of 122.9m. The cash needed for potential dividend payment is 433m x 3.4sen is 14.72m. Hence, it is realistically possible.
6 Insiders have been buying up the shares continually. Insiders buying indicate commitment and confidence in the company's present and future performance.
7 Engtex is a fundamentally sound and well managed company. At its current price the downside risk is minimal. Happy Trading.
1.On Tuesday 13th April it closed at 70.5sen. The current share price is above the 20-day EMA and above the 200-day SMA. This is a sign of strength and indicates bullish sentiment and buying opportunities.
2. The long term Golden Cross formed between the 50-day EMA and 200-day SMA confirms the long term uptrend.
3.The gap between MACD line and signal line has widen. This means we can expect positive momentum in the coming days as represented by the larger histograms.
4.From 5 April up until today 13 April we see heavy volume with raising price. An increase in price accompanied by an above average volume traded indicates strong buying interest.
5. Clearly, the market expects the momentum to persist and share price is expected to accelerate further upon announcement of dividend and expectation of stronger profit performance in the coming quarter. In my opinion, it is therefore unwittingly wasteful to cash in on short term small profit or contra gain. Besides, insiders buying indicate commitment and confidence in the company.
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....