Blogged previously: OSK Report On JAKS Resources
As said in the earlier posting:
- I am so confused. OSK managed to produce a huge 7 page report but would not commit to any CALLS on the stock despite the huge disparity between the current traded stock price and their target price. Well I wonder why.
Anyway, JAKS reported its earnings on New Year's Eve.
I wasn't optimistic at all but that's not important. I was more curious how JAKS fared against OSK optimistic earnings projection made back in July 2009. As mentioned in the earlier posting:
- That was JAKS last reported earnings on 29th June 2009. JAKS half year 2009 earnings is a loss of 3.82 million.
Hmmm...... and OSK has a forecast of 22.6 million for JAKS for FY 2009!
Optimistic eh?
Fy 2009, JAKS lost some 6.7 million. OSK earnings projection was a massive 22.6 million!!!!
Now as I had mentioned before, I do realise that earnings projections is something that one should take with large pinches of salt. Not saying that the analysts do not know what they are projecting but earnings projection or earnings estimate is simply difficult because one is predicting what the company 'might' earn in the future.
However, having said that, the example of how OSK made its earnings projection for Jaks was rather questionable.
Simple common sense stuff, really.
Consider the following questions.
Did JAKS recent earnings performance suggested it could 'live up' to such 'optimistic' earnings projections?
Have a look at the previous screen shot here again.
As one can see from OSK own numbers: JAKS had lost 6 million in FY 2006, JAKS made 12.4 million in FY 2007 and JAKS made 2.9 million in FY 2008.
So judging from such historical earnings, how did OSK come up with such earnings forecast of 22.6 million for FY 2009?
What was JAKS current earnings indicating then?
Well back then, JAKS first half earnings for fy 2009 was a loss of 3.8 million. And yet by boldly saying that Jaks could earn some 22.6 million for fy 2009, wasn't OSK wildly optimistic?
Here's some simple math. Effectively for JAKS to end the fiscal year earning some 22.million, OSK was saying that JAKS would earn some 22.6+3.8 million or 26.4 million for the remaining 2 quarters for fy 2009. Or some 13.2 million per quarter. Was it even possible? Did JAKS even earned more 10 million per quarter since its listing?
So how did JAKS (stock was trading at 77 sen back then, with a fair value of 1.23!) fared since that 7 page, colored report from OSK?
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3 comments:
If one read and follow your blog, there is one or two research house always in your mentioning. So, if your arguments are valid at least to me, I think we should have a Hall of Glory and Shame (why now called them Cow Gong (for Glory) and Cow Boo(for Shame)) for these analysts' Heads. At least, this will ask them to buck up or remind the investors of their accuracy.
The bloody problem here is the research house did not disclose their holding in the shares they covered, of which a possibility of conflict of interests are likely to prevail.
Happy New Year to you, Moolah.
A Happy New Year to you too!
LOL!
Are you suggesting... that perhaps I am picking on them?
Hmmm.... maybe I am... maybe it was simply co-incidental.
LOL!
ps: ... but ... the facts and the issues are all there for all to see, yes?
Thank you Moolah for weeding out the fundamentally unattractive stocks. Recall Jaks was promoted on the hype of a letter from the state government assuring the company of billion RM worth of contracts which did not materialize. The share price went above RM2 only to collapse.
And now many houses are promoting Notion on the premise of a big foreign shareholder.
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