Koon Yew Yin 22 Oct 2020
All the glove stocks have been dropping in the last 2 or 3 days. The reasons for selling can be as follows:
1 Generally investors do not like political uncertainty, they prefer to sell. A few days ago, Anwar met the King to declare that he has enough MPs to support him to be the next PM. Why Anwar is still not appointed yet?
2 Investors are happy to take profit since all the glove stocks have shot up a few hundred percent in thae last 6 months.
3 Many investors have herd instinct and follow blindly like sheep to sell glove stocks in the last 2 or 3 days.
Covid 19 pandemic have been affecting everyone and all listed companies except glove stocks and medical products for the virus prevention. As a result, the demand for gloves far exceeds supply and all the glove makers are taking advantage of the situation to increase their selling prices to make more and more profit which are being reflected on their stock prices.
Among all the stock selection criteria such as NTA, cash flow, debt or health accounts etc, profit growth prospect is the most powerful catalyst to push up share prices.
Currently all the glove stocks have unprecedented profit growth prospect. Supermax has the best profit growth rate as shown in its latest quarterly report. Based on its ability to increase its selling price, its profit for next quarter will be the best in the history of the company. The company will make the announcement soon.
ptrend Price Chart
The above one-month price charts for the 2 leading glove stocks, namely Supermax and Top Glove are still showing up trend. They are not on down trend.
Conclusion: if you sell glove stocks what better stocks can you buy? Only glove stocks will continue to have good profit growth prospect. As I said earlier, Covid 19 pandemic is affecting all listed companies except glove stocks.
All investment decision must be based on fundamental analysis and price charts. Glove stocks have good fundamentals and good uptrend price charts.