Many investors are eyeing on MEGB recently, not because they want to send their childrens in to study, but it's attractive trading share price which selling pressure accelerated sharply over the past few months.
MEGB, Malaysia's largest operator of non-government nursing colleges, offers nursing courses and allied health education programmes. According to a few analysts, MEGB track record and fundamental still look good. With a shortage of nurses and the rising demand, MEGB is still a potential growth stock to go for.
In addition, the higher education industry is generally a more resilient and recession proof, compared with other industries. A very good example of success case is HELP. On the other hand, there is also bad example like STAMCOL. Anyway, we can always justify their potential from time to time.
Initial investigation showing that MEGB recent transactions were mostly done by foreign investors. The actual motive were not identified, but analysts suspected the foreign fund managers were reshuffling their porfolio. But I just wonder, are they willing to make such a huge loss in such a short time? It looks bad for their performance and investors return, unless they found a better gem.
The other bad news for MEGB running concurrently are the future disbursement of PTPTN loan and delays in the opening of 2 campuses in Kuching and Johor. It may be a big concern for PTPTN loan disbursement, as 95% of the Masterskill's students taking PTPTN and the company can goes bankrupt if the Government run out of money for this programme. In my opinion, education still needs to go on to nurture more professionals for internal supply, and the Government just cannot terminate this programme easily, at least not now. They have to find way to improve the loan collection.
In fact, MEGB share price has rose almost 10% on yesterday, but fall back to RM2.12 today. I tried to queue at RM2.15 but I couldn't get back the same price 2 days back. By looking at the price now, it gives a big discount of 45% from the IPO price of RM3.80 per share, where the upside opportunity heavily relies on the stop selling of foreign FMs and local investors confident. Anyway, we can see the foreign FMs has been stopped selling since last week. So why the selling pressure is still remain strong today? Do you think it is possible for the selldown to continue and share price to breach RM2.00 level on next week?
If market allows, I will take the risk and continue to queue for MEGB on next week, enter in stages. A potential growth company share price just cannot be lower forever. I'm sure it's share price will recover in a mid-term, if it's not short-term. This opportunity makes me think of rubber glove makers, their share prices look a lot better now compare to their worst in September. Good luck!
Note: The post above is just my personal opinion. I'm not held responsible for any of your trading decision.
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