Cepat's earnings this year should increase by over 50%. With a prospective EPS of over 25 sen a share for year 2022, it is trading at a prospective PE of under 4. I see its share price being manipulated.
CPO price has stayed above RM5,000 a ton for 4 months and above RM6,000 a ton for almost two months. The war in Ukraine won't end so early and CPO price is unlikely to dip below RM5,000 a ton this year. CPO price averaged under RM4,000 a ton last year and Cepat still earned 17.4 sen a share. Even assuming there is no increase in crop production, Cepat is expected to earn much, much more this financial year.
Small investors seemed to be in a state of panic today and drove Cepat's share price all the way down to 84 sen a share. Fear will drive people to behave irrationally. Even if Cepat's profit remains the same as last year, it will still earn 17.4 sen a share, translating into a PE of less than 5.
Cepat earned 16.38 sen a share last year and assuming production remains the same this year, it shouldn't earn less than 16.38 sen a share this financial year unless average CPO price in the second half falls below RM2,000 a ton.
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....