Golden Pharos- be careful of temptation

Many people have asked for my opinion on the meteoric rise of Golden Pharos’s share price. Since its 1st quarter result announcement on 26th May 2014 the price has shot up from 30 sen to close at 99.5 sen yesterday. Many people rushed in to buy when they see its 1stQ 2014 EPS of 14.84 sen as compared with a loss of 0.28 sen last year.

You can see from its financial highlights for the last 5 years as shown in the below table, it has been losing money in 4 out of 5 years and it made a miserable Rm 869,000 in 2011.

As the saying goes “One sallow does not make a summer”, the result of one quarter does not mean that the company can continue to make similarly good result in the next few quarters.

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All I can say is that I am not buying it and my advice to readers is to be very careful if you are tempted to buy.

You have to read the company’s commentary on their prospect carefully and draw your own conclusion.

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