A Personal Finance Blog for Malaysian: Stock Pick: Tenaga

Sunday, November 7, 2010

Stock Pick: Tenaga

When is the best time to buy a stock?

Fundamentalist always believe over long term Mr. Price will meet Ms. Value.

Therefore, when no change in fundamental, and when the price is low (relatively to the earnings - Earnings Yield) you should consider buying it.

Latest closing price: RM8.82
Rolling-4Qs EPS: 73.664 sen
Earnings Yield: 73.664 / 882 = 8.35%

Therefore, if you are looking for return of 8.35% (which is more than double risk-free-rate of 2.85%), this stock at this price will be attractive to you.

Based on historical data, at 66.67% of the time, the EY is at the band between 3.25% to 7.25%, therefore, if current EY is 8.35% - it is consider cheap and with potential to increase in price for Capital Gain. Therefore, you may have Cash Flow Gain now and highly likely to enjoy a Capital Gain later.

Disclaimer: Please note that this is intended solely for educational purposes and any values put forth does not constitute financial advice. You should consult with professional advisors familiar with your particular financial situation for advice concerning specific investment, accounting, legal and other matters before making a decision.

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