Basically it has no bad news lately, except the 3Q10 earning is a little bit fading compare to 3Q09 due to monsoon season. Nonetheless, the upcoming quarter earnings will be expected running strong due to India IPP project phase claim and monsoon season is over. I also hope MUDAJYA can award with some projects within the country.
As what many people already know, investors have lost interest or confident with this company due to the black mail happened on the last couple of months. Even though it was over, many investors are trapped from the high price of RM5 to RM6 to RM4.x. A painful 20 to 30% fall. I would assume the share price has stabilized for the past week after the release of 3Q10. Unfortunately, the selling pressure continues these few days and reach almost RM3.80 level today. And we don't know how much it will deepen further for the coming days.
As usual, MUDAJYA will try to buy back it's share when it drops below certain level. The company thinks it's share price below RM4 is still attractive. The current PER is just below 8, which is at extremely attractive buying point after minus out the possibility of black mail issue. The PER will be further drop to 5.x in 2011. By looking at the unchanged fundamental and future outlook, I think it's time for me to collect more when it reaches RM3.7x level, provided that no second black mail is coming.
Perhaps not only myself, most of the research analysts also looking bright on this company future earnings and share price. If not because of black mail, it would be standing at at least RM6.00. On the other hand, you must wonder there are so many potential construction companies to pick, like MUHIBBAH and GAMUDA, but why MUDAJYA, especially it looks like a sunset share and have more risk for the price to go down further.
Well, first of all, I would see the price is around the bottom, I mean may be not the most bottom perhaps. The worst is over for quite some time, isn't it? Secondly, I foresee this company has a stable upcoming earnings compare to others. As it is almost guarantee, why not? Thirdly, this company seems no longer paying attention by the investors, that's meeting my requirement. So adding these reasons together, it is a good pick for myself. I'm confident that it's time matter for the share price will goes up again, while also waiting for investors to regain the confident on this company.
Besides, I've just collected little portions of MEGB shares lately. I just like it's steady growth and the discount of close to 40% from the IPO price. Let's see how the price moves for the coming few weeks.
Note: The post above is just my personal opinion. I'm not held responsible for any of your trading decision.
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