This article is going to highlight penny stock that people should be looking at rather than speculating the other!
CIVIL WAR OF PENNY STOCKS
As market attention is now on penny stocks play after big-cap theme finished last two weeks, I just would like to share my thoughts of people wrongly valued penny stocks.
Of course everyone here wants to join the wave of speculating penny stocks to make huge profit in the shorter time period. BUT you have to remember that wealth cannot be created overnight! Although you can make RM10k a day or a week, but you would not know that the next stock you punt in would give back all your gains and even worse than that.
So, I think it is important here to give a reminder to punters, investors, speculators, hedgers to go in the right stock, even if it is a penny stock!
Which penny stock do you think it is worth to bet? There are few out there I can say, but I am going to focus only ONE, which is recent stock that highly volume traded.
Am I in yet? Yes, but at higher price than current share price. So, I didnt pump in at lower price than market and dump later at higher price. Surely, you will get better cost price than mine if it were to trade lower again! If i tell my cost price, you wouldnt believe it because i can write any price I want here. Am I right?
And I will compare this stock with other penny stock that have been heavily speculated.
Here we go, as the name suggest, Priceworth International (PWORTH) is the best penny stock to bet right now! In fact, really WORTH to have it in the portfolio for long-term!
Why this stock? Look at here:
Looking at above table, PWORTH is still superb undervalued! It has only been trading below its net asset of 0.57x. So cheap! In fact, it is a growth stock company.
The best way to trade penny stock is by using PBV. Why?
Firstly, it can provide safety and preserve your investment capital. Secondly, PBV is mimic to minimum Target Price for growth stock / penny growth stock! In other words, PWORTH's floor price is at 42sen! Now, it is only at 24sen!
Why not using PER? This is because some/most of penny stocks are loss making companies. So, PER valuation is distorted. Secondly, to standardise for making comparison between penny stocks.
For comparison based on above table, lets look at between dodgy stock, which is MUIIND and growth stock, which is PWORTH!
MUIIND has been heavily trading without a proper fundamental sound and a loss-making penny stock. Yet, the stock is at PBV of 1.08x. What if the stock continue goes up to 30sen? It would be at PBV of 1.15x.
Is it fair? I believe it is NOT FAIR to PWORTH! PWORTH is a profit making penny stock!
So, I strongly believe the stock will go back up to its floor price of PBV 1.0x of 42sen at least! In fact, we can apply premium of 20% (rule of thumb) to the PBV of 1.08x of MUIIND for PWORTH, thus, its near term TP would be at 54sen!!!
Yes, you can call PWORTH is a penny now! But it will turn to mid-cap stock at least in the next 2-3 years later. It has now been backed by RHB Group founder Tan Sri Abdul Rashid Hussain, who is committing to take up a 6.4% stake in the enlarged share capital of the company via a special issuance of new shares.
Not just that, with the entrance of Tan Sri, earnings prospect of Priceworth can so called "secured" and already in the pipeline. The company will acquire of a 100-year concession right to carry out harvesting, forest management and rehabilitation, and industrial tree planting within a 101,161-hectare forest reserve area in Trus Madi, Sabah.
This is just a matter of time to translate into superb growth! And I dont think it will stop here! I think Tan Sri for sure has "some big plans" on his mind to make sure PWORTH become the next RHB.
Well, I am not familiar with the business, so, I cant calculate its eps forecast for now! BUT at least future is secured!
In a nutshell, fundmentally, I strongly believe PWORTH is a hidden GEM. Its share price should be traded at 1.0x PBV or at 42sen now.
If loss-making penny stocks can trade above 1.0x PBV, it could do for PWORTH as well. In fact, some other loss-making penny stock trading far higher than its net asset.
For example, ORION IXL. I know its future is great. But its net asset is only at 7.2sen while its share price is at 31.5sen, which is 4-fold higher than its net asset. If future is great for a reason to trade far higher than net asset, PWORTH also should be running 4-fold higher too. That time PWORTH's TP would be at RM1.80. Sure can, but in the next 2-3 years.
If this guy can claim that he made correct calls 2-3 years ago for his stocks and to apply it to MUIIND now, I think I can apply it too for PWORTH. You guys should keep this article and get back to me after next 2-years that PWORTH would be trading above RM1.50! Trust me!
For very near term view, with current uncertainty in geopolitical turmoil, it will be an opportunity to get bargain price when people react to the news. Because I can see irrational investors will panic selling the stock and this will push down the price for NO valid reason. It is not a financial crisis anyway!
Therefore, I am with open hand, welcome irrational investors to sell PWORTH to me for averaging down and see you guys in the next chapter of sky-rocket price!
Final TP: 54sen ; Floor TP: 42sen
Technical View on PWORTH
Source: Various
Based on above diagram, ALL Indicators and timeframes have signal BUYING!!!
It was due to share price resistance has broken to surge to 24sen as of yesterday.
The rise also has been accompanied by higher volume.
It is HEALTHY BULLISH signal. Not fake one. No joke one.
Meaning that, BULLISH is ALL THE WAY.
Any drop in share price will be really huge opportunity to jump into the boat for those who missed to accumulate it before!
Look at below chart, I have drawn immediate resistance at 27.5sen, followed by resistance at 29sen, 35sen and 39.5sen!
The chart looks SUPERB CUN. UPTREND ALL THE WAY. I love it!
Source: Internet
ISource: Internet
REMINDER: THIS IS NEITHER RECOMMENDATION NOR PUMP AND DUMP ACTIVITIES! WHATEVER WRITTEN HERE IS JUST SHARING OF MY OPINION ONLY!
http://klse.i3investor.com/blogs/tradingideas/120448.jsp
