Public bank has hit the 52-week low at RM7 (PE <10) and re-bounce back to close at RM8.10 on 4/10/09. Should be a good deal if maintain its EPS in subsequent quarter and whenever it stock price trade less than PE < 10. However, the Premium Ratio is 3.33 as of RM8.10 stock price.
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Do you know that if you invest $ to buy 1000-unit of this share at RM2.90 on end of 2000, you have generated 4 time of the capital gain + dividend (after tax deduction) by end of 2008? Was that a great deal?
Do you know that the Premium Ratio (Stock Price/Net Tangible Asset per share) on this initial investment on 2000 was 1.22. This mean that you only pay 22% premium to own this profitable business.
Public Bank Q1 '09 result:
Revenue: RM2,431 Mil
Net Profit: RM596 Mil (NPM: 25%)
EPS: RM0.1744
Revenue drop ~5% subsequence quarter and currently the trailing PE is 11.58 as of its stock price at RM8.45 (4/16)
Here is the deal:
My target purchase price is below RM7.50, which is translated to PE < 10 and Premium ratio < 3.1.
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