Eratat from 15 cents in Mid-May 2013 in 5 months price had fall to 8.7 cents, its a lost of 42%. To recover back just to break even at 15 cents again it has to rise back by 72%. STI over this period fall from 3450 down to 3170, is only 8%.
Eratat inspite of it's profit, able to generate positive cash flow yearly, cash more than share price & NAV a few times more than the share price, what happen???
Fundamentally on paper Eratat is one of the most under-value stock around. Company before the loan is debt free, super fast growth cashflow, cash per share now double NAV 4 times its share price. Yet today it is sold down to PE 1.5X. Such super performance should be trading at least PE 10X. Yet Eratat is sinking or bleeding over many months.
Even you may have all the knowledge of the company and debate over it for so many months day and night and lost sleep over it defending your points you can't change the situation. Do You have the peace with your main hope on this stock? Is its one of your core stock? If it is your core stock then you have already under-perform. The truth is that market know best.
I repeat once again KNOWLEDGE does not equal WISDOM. You need to think out of the box. I repeat again in the real world situation 1,000 X 1,000 will not add up to one million. Eventually MARKET IS THE JUDGE.
This is my advice, nothing more. You need to MANAGE YOUR RISK!
last thur the volume peaked at around 6.74 mil. And, by today, should hv flushed out the weak contra buyers.
Eratat should be bottoming out le. Market sentiment should be improving since Fed has reopen and debt ceiling raise. With no QE tapering, I am expecting a year end rally and let's see if Eratat can recover its price to around 15+ cents by year end.
But first, need to clear the 9 c barrier first.
since Eratat has sought shareholders approval for sharebuyback during the AGM, guess just wait patiently.
Q3 result is something to look forward to as Q3 is usually the strongest quarters. Trade deposit for 2H apparels up 20% should give Q3 some earning growth momentum, as verified by news of new shops opening. The increase in apparel orders should be able to offset the quarterly bond interests.
Seeking a share buyback mandate is not the same as actually taking action to do it.
Getting the mandate is almost free for them, and a cheap way to reassure shareholders without actually doing anything else. As long as they did not do any share buyback, they didn't. They could but they didn't.
Yet if they do, definitely there will be questions on the usage of their cash, to do share buybacks but borrow cash for working capital... That would be poor use of cash.
Also, new shops opening does not guarantee increased sales (if any) will cover the bond interests. It is like someone going to open a new shop in a shopping centre, and immediately expecting sales and profits to come in just from opening it and putting inventories in.
Lastly, market sentiment improving, or year end rally (if any), doesn't mean Eratat can recover its price. Throughout a whole bullish 2013, where market sentiments were generally good, Eratat went the opposite direction.
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