What i learn from <舉債來投資 MEGAN 值得嗎?>

Just finish 1 part of the KLSE.8K E-book which is the intersting part ==> 舉債來投資 MEGAN 值得嗎 ?.

Many ppl who invest in Bursa Malaysia surely know that who is this "MEGAN"!! what a big superstar. MEGAN famous with her super low PE and very good NTA, RoE and EPS, but the big mystery is why her share price keep on dropping while the company is making profit every year?!

It is really a lot of info and analysis done by 8K and others investor where they noted down in the e-book. this hand note really shows a good example of stock with good PE, NTA, and RoE not necessary a good company. For a long term investors and you are only looking at the paper work shows by the company, with this MEGAN case really can hurt you a lot!!!

What i learn from this article are:

1) Other then the financial results provided by the company, we should also sensitive to each of the activities from the management team.

In this case, Most of the share disposition activities by Mr. Yeo's already give a big hint of the thunder storm, but we are still keep on holding the point of low PE (with PE 2 for a counter in a bull market, for me is extremely abnormal!) and high NTA just because we are referring to the history of the market (in this article, the example is GAMUDA where her biggest share holder soled most of her share but GAMUDA share price moving up afterward). Is not to say that not good when we are referring to the pass market history but we should also treat each case differently. Any how, why unker 8K still keep on holding MEGAN is because he strongly believe that it is a chance to maximize the profit with super low PE (~2) in this big bull market (2007).

2) Extreme high trade receivables and extreme low trade payable, not healthy to a company as it may suffer if they have problem to chase back all the receivable. The ratio of reveiveble and payable should be under consideration as well. But regarding what ratio is the best?? i also don know, but i will find it out.

Above is what i gain from the article. For Unker 8K, he is looking for maximum return in bull market, some says that he is nothing different then 投机 because he is not looking serious into some abnormal activities of the company，but he explain that he is holding strong on MEGAN is because of her low PE and high RoE, it is not simply holding because of low prices in bull market. Btw, he also mention that he is able to take the risk even a lot of signal showing that there are something happen at behind for MEGAN, (such as extream low PE but with continuous good operation performance from 2004 until 2007; abnormal share trading by management / main share holder; abnormal in trade receivables and trade payable ratio).

Well, i would says that this is 8K's investment method, he have his own reason to keep on holding MEGAN, that's why this become a hot discussion in the Cari forum in 2006 and 2007. For me, 8K is applying the thinking against the major population (反向思考）for his stock pick, that is also why he still holding MEGAN when most of the people is having bad feeling with MEGAN. maybe that is also the reason why MEGAN share price is at low all the time because many people looking at MEGAN's week point. Any how, if MEGAN is reporting the real situation of the company with good profit and low PE, by long term holding it, the return will be very very huge! but really we can find such a company that will give extremely low PE with very good RoE, NTA and EPS in a super bull market??