It is not the first time. We just do not understand why there are many cases of concept stocks or rumored stocks being chase up without fundamental good reasons. Lately PDZ which has a NTA of RM 0.10 and uninteresting earnings results from last few quarters. If even a new share holder taking over and inject assets into the stock. Will it benefit the current investors with a trading price of RM 0.400?
Another case like ECOworld with many raising the target to RM 6.00 with NTA at RM 1.2 and also uninteresting results. Again even with land injection and new explosive developments that can benefits the company. Will it benefit if you buy in now at RM 5.20? Do you think the major share holder will be generous enough to inject free land and do not capitalize on its effort to revise the company with profit?
We are not sure but is difficult to convince us buying into these stocks. Rumoring the son of this or that taking over…. We advise better stick to money on the table counter like MBSB. As merger is likely on the table with book ratio of 1.75 times. Even if the merger call off with the current PE is a straight bet to me.