Monday, July 26, 2010

Is Mamee Well Loved??

Saw the following article: Mamee — the well-loved blue monster

LOL!

A well-loved blue monster????

Oh gawd... given such a title... lemme guess.. the research report is from the one and only.... OSK!

And as usual, I seek the chart of Mamee first.

Why?

Well, we need to know where the stock is compared to recent days. Are we buying a potential sleeping beauty? An undiscovered gem? Or is the broker (LOL! if you are sensitive with the word 'broker' (just to be broken, eh?), I could always use the name 'research analyst'.:P ) insinuating a BUY call when the stock looks like it's on a very strong erection, which needless to say, allows us, the punters or investors the very chance and opportunity to try our 'luck' on the sacred money-making-strategy of buy high, sell much, much higher to the next sucker theory. :P

(ps: obviously... that above is my flawed ways to look see. And obviously.. you might even have a much better strategy. :D )

Anyway... here is Mamee's stock chart.




The arrow... the arrow... under Share Price Performance...

  • Prices 3 Months.... LOW... 2.800 (28-May-10)
  • Prices 6 Months.... LOW... 2.000 (30-Nov-09)

Hmmm... 6 months ago... Mamee... the well-loved thiny... was 2.00.

Hmmm... 3 months ago... Mamee... the well-loved thingy.. was 2.80.

Today, the stock is 3.70.

:P

Now I am able to grab a hold of the report. Yay! ( hmm... you think they happy? :P )


Hmm... price is rm 3.70.

They think the well-loved monster is worth.... rm 4.00.

Hmmm.....

Stock is... way up.... buy higher and hope to sell higher at rm 4.00??

Hmmm....... mmmmmmm.......

but.... but.... butttttt..... I really have to give them credit for saying the following.....

  • Buy recommended. Given the recent rally in the share price, upside to our TP of RM4.00, based on the PER of 11x over FY11 EPS, is rather limited. Nonetheless, given the current strong sentiment on consumer stocks, we initiate on Mamee with a Buy.


Glad they realise the upside is rather.... limited. :P

I then want to se how the "based on the PER of 11x over FY11 EPS".

Yessir me... I do understand that everyone says that a company should be worth what it can earns in the future.

Yup... the stock in the share market is usually priced what it can makes or don't make in the future.

But.. but... butt.... butttttt...... who determines the future earnings?

What if the future earnings is way optimistic?

Yeah... yeah... what if a broker jacks up the earnings estimate... then... surely... the stock... 'appears' to be worth so much more... yes? (ah.. the beat the 'estimates' game we always see on the TeeVee)


Well according to table, Mamee earned some 44.4 million in fy 2009. Current fy 2010, it should earn around 48.4 million. And the next year, fy 2011, it should earn some 54.9 million.

And OSK values Mamee based on this 54.9 million. :P

See it's simple.

It uses a 11x PER over fy 2011 number.

Compare the difference.

Fy 2009, eps is 29.3. Well 11x of this eps = 3.22.

Fy 2010, estimated eps is 36.3. Well 11x of this eps =3.99 or 4.00.

And currently? The most recent quarterly earnings looks something like this....


The research report also said....

  • Mamee has net cash of RM45.7 million and is well supported by a healthy net operating cash flow of RM20 million to RM30 million a year.

Here's Mamee's most recent balance sheet. here



Well.. if my eyes is not faulty.... the piggy bank cash balances as at 31st March 2010 for Mamee stands at 40.688 million. (ps at 31st Dec 2009, Mamee piggy bank cash balance is skighty more... at 43.457 million)

How? How did OSK get 45.7 million?

And oh... apparently... Mamee is an expert in the stock market!

No joke.

In the first 3 months of the current fiscal year...

  • Mamee purchased some 9.142 million worth of shares.
  • Mamee disposed some 8.923 million worth of shares.

And how can Mamee not be an expert when Mamee made a very impressive 45 thousand from these purchases/disposal of quoted shares.

You reckon I should call them for some share market tipsy?



Mamee's five year chart.



ps: I am not the Sotong, so I surely do not know if this posting will help you lose money. Ok?

7 comments:

Kong said...

Hi, I'm new to Malaysian stock market and your blog. I seldom write comments, but I really enjoy reading your writing. Good day!

Kong said...

Hi, I'm new to Malaysian stock market and your blog. I seldom write comments, but I really enjoy reading your writings. Good day!

Moolah said...

Good day to you too. :D

hhc1977 said...

dude,

london biscuit is also expert in share.....

Moolah said...

If that's the case... the Sotong... it can be retire!

:P

Mr ICICI said...

im not sure, but when u say the Sotong, r u trying to make comparison to paul? paul is octopus la. =)

Moolah said...

ps: my name is not Paul.