Thursday, November 24, 2005

TITANic Bull Part II

Well, Titan closed yesterday at 1.44. (ahem!)

What is most interesting is that the Star has another write-up on Titan:
Titan dips on expectation profit may fall short

Here's some of my comments on it.

1. The IPO price was priced at 1.77. (me was mistaken lah. I thought is was 2.17!!)

2. No mention on why Titan's IPO projection earnings for fy 2005 was soooooooooo optimistic.

3. The article focused on non-issues like sales growth. Duh! Sales growth so important meh?

4. Article suggested Titan has a share buyback which might limit the downside risk.

Now the last suggestion for me is totally nonsense.

Yes, share buyback can at times lend a boosting hand to a stock price and ultimately engineering a share price support and even a share price appreciation.

However... for me, it counts for nothing... it does not add extra 'value' to the company's fundamental value. And if and when Ze market deems a share not its worth, a company's share buyback will not stop a share price decline if and when Mr.Market heads for the exit. If so, how does one define might limit downside risk?

A good example? Take MPI. Many, many moons ago when MPI started its slide from its high, the company embarked on a share buyback in an attempt to support the shareprice around the RM30.00 region. Look at MPI's price now?


Sooo.... if and when a company has a share buyback program.... do u think it is wise to .... err..... errr.... (lol...lol...lol...... yeah.... here comes Posexpress favourite!) A S S - U - M E that the downside risk will be limited?

:D

1 comments:

hhc1977 said...

nm,

valid point. Dont ever try to fight the trend. Share buy-back wont stop the inevitable. Listed below are some which failed in this aspect:

1)whitehorse
2)Choobee
3)Gtronic (not by company but by major shareholder buying almost everyday)
4) DXN (started but failed miserably from 0.75 to 0.6 now)

The list goes on. The only one which is successful now will be:
1)Pos

i think.