Hot Stock MyEG shares, structured warrants up

by **Cals** Mon 06 Jul 2015, 00:18

Hot Stock
MyEG shares, structured warrants up

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By Chen Shaua Fui / theedgemarkets.com | July 3, 2015 : 11:24 AM MYT

KUALA LUMPUR (July 3): [size=14]MyEG Services Bhd ([You must be registered and logged in to see this image.] Financial Dashboard)’s shares and structured warrant rallied today due to investors’ positive sentiments against the exclusive e-government service provider.

However, a remisier cautioned that the counter was overvalued.

MyEG (fundamental: 2.7; valuation:1.1)’s share price rose 12 sen or 4.21% to RM2.97, but gave up the gains and settled at RM2.91 as at 10.39am. Some 1.1 million shares changed hands.

Meanwhile, the call warrants, namely MyEG-CI, MyEG-CK, MyEG-CJ, MyEG-CD, also rose together with the parent share.

MyEG-CI rose 0.5 sen or 6.25% to 8.5 sen, with 3.56 million units done; MyEG-CK rose 1 sen or 8% to 13.5 sen, with 790,100 units traded; MyEG-CJ went up 0.5 sen or 3.05% to 17 sen, with 560,000 units having changed hands. Meanwhile, MyEG-CD upped 3 sen or 6.82% to 47 sen, however a thin volume of 20,000 units were done.

Alliance Investment Bank remisier Raymond Foo said MyEG has been the star stock for the past two years, as investors believed the company can do well, as it is getting exclusive e-government services contracts from the government.

However, Foo pointed out that the stock is overvalued.

“For the third quarter ended March 31, 2015, MyEG’s cumulative earnings per share is 3.8 sen; assuming it can achieve 6-7 sen a year, with the current share price of RM2.91, its price-earnings ratio (PER) stands at 40 times — this is too high,” explained Foo.

He noted investors must be cautious with stock traded at high PER, as the risk is high, adding “if anything happened to the company, the share price can collapse.”

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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