- Anonymous said...
allow me to add some real-life facts. P'worth is also a logger.All the timber concessions are awarded by Yayasan Sabah through YS private arm Innoprise which comes in the form of two agreements-timber extraction contract and logs purchase.Majority of the timber if not all are sold as round logs in the export market...and underdeclaring of price is a common practice in the timber industry...the question is has all the income derived been taken up or just the contracting income...Your Guess. I was a bit surprised when I saw a reputable researcher recommending a Buy.P'wrth & Sanbumi are the 2 principal operators of Yayasan Sabah...notice that Sanbumi reports their monthly production figures. You decide
My Dearest Anon,
I hope you do not mind me saying this but it would extremely nice if you could put a name behind your posting. This is because there is so many Anon around.
Anyway, you are correct that PriceWorth is also a logger.
However, this does not change my concerns.
- Declining net profit margins. Extremely clear margin erosions can be seen each fy since fy 2002. Is this not a concern?
- Incredible deterioration seen in PriceWorth's balance sheet. Company's nett debt is increasing each single year at an alarming rate.
Those are my concerns.
And yes, research house such as S&P, which is part of the CBSR program ( see Research Reports Good For Stocks?? ), has just upgraded to a buy. I am well aware of it.
Here is their past recommendation and target price.
Date Recommendation Target Price
New Buy 1.12
5-Mar-07 Hold 0.94
30-Nov-06 Hold 0.83
13-Nov-06 Hold 0.78
4-Sep-06 Hold 0.65
6-Jun-06 Hold 0.59
2-Mar-06 Hold 0.53
14-Dec-05 Hold 0.49
They say buy, should we follow? Or is it more important to reason out our own investment reasoning?
Me?
I always prefer to reason out my own reasoning. And my reasoning tells the that those concerns should not be discounted if I want to invest in priceworth.
Thanks again for your feedback.
0 comments:
Post a Comment