Saturday, July 24, 2010


A car is no longer a luxury. In our modern world, the hustle and bustle of city life has caused a car to be a necessity. A young graduate needs a car more than anything else when he or she starts work. Just look at the increasing number of cars on the road, and at once you realize how important a car is. The demand for cars will definitely keep on rising over the years. So it goes to reason that any company in this field will have a bright future provided its management is competent.

MBMR is in the marketing and distribution of motor vehicles. It is also in the production of automotive parts and other related products.

In the financial crisis of 2008/9 , the demand of cars was greatly affected. In the first quarter of 2009, the earnings per share (EPS) of MBMR was 3.87 sen. In the first quarter of 2010, the EPS ballooned to 16.5 sen. This is an improvement of 326%! It would be too much to expect such growth to be maintained. However, for the 2nd quarter ended June 30, 2010, EPS should at least be equal to that of the first quarter. Last year MBMR announced the result on August 06. This year, they may do it on the same date. An interim of about 5 sen will probability be announced as well. This is a prediction.

MBMR is financially strong. It has a solid balance sheet with no cash flow problem.

Looking at the 5-year weekly chart, it is easy to see that support of the stock will likely be at 3 ringgit. In the stock market, we go after strength, not weakness. The stock has been in an uptrend since Oct 30, 2008 when it hit a low of RM1.90.

A trend in motion is likely to continue. Thus I expect that MBMR will continue to trend upward.

Nothing in the stock market is certain. In fact the only thing certain is uncertainty.

As usual, you buy, sell or hold at your own risk absolutely.

Good luck.