Posted by Daniel Wong | 10:05 PM | Top Glove | 0 comments »
Fair Value: RM 4.12
Current Price: RM 5.12
Yesterday's quarter earnings report shows that its earnings is still in a downtrend. I'm revising my Fair Value further down. If you need to cash out your investment in this particular stock in the short term (less than 1 year), I suggest that you SELL off all your holdings of this stock (even if you have to cut lost). I'm sorry for failing to give a SELL call in the month of June after Topglov annouced a lower quarter profit. I failed to see that the exterior factors (latex price uptrend, weakening US dollar & aggresive expansion by the rubber glove industry causing over supply) are actually fundamental changes affecting the company. The surge in price during that month due to the Bonus Issue announcement have clouded my judgement of the fundamental changes of this company, which call for a SELL.
However, for those of you who intent to invest in this stock for the long term (more than 3 years), I still stick to my earlier suggestion: Don't sell off all of your shares, just Hold half and Sell half. This is because we can't be sure where the bottom is. Don't average down or buy back now, even though the price have dropped substantially from your initial Sell price. I suggest that you begin to average down or buy back ONLY WHEN the company begin to show signs of uptrend in its earnings.
Note: For Supermax, my advice is the same as above - Sell off all if you're short term; Hold half and Sell half if you're long term.
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