Friday, February 25, 2011

Follow up on MEGB 3

A summary of MEGB's coverage by Research Houses after the 4Q2010 results.

There are 4 research reports on MEGB's corporate website which can be found here. Also further news reported on the Edge but reproduced here in the Msian Chronicle.

Generally, all positive:

Kenanaga - TP: RM3.73
Alliance Research - TP: RM2.60 (trading buy)
CIMB - TP: RM 4.48
DBS - TP: RM 4.50 (12 months)

Also, it can be seen that there are catalysts for it to go up:

1) Final Dividend to be paid out end of next week.
2) Buyback activites to be sometime in June 2011.
3) General growth in its number of campuses and student population.

Interestingly, the CIMB report states that the transfer of the CEO's shares to his wife was due to - asset planning. This is vague and could be down to tax reasons or could it be he really is going to personally buy more shares of MEGB?

To be honest, it's quite a relief to read all these positive reports and there's something here for me to come back to read to understand why I took the plunge into MEGB in the first place. I was pretty worried. Its much harder to buy on a stock which has been battered and there's still a general fear among people about it!

Well... at it's current prices it's trading at 6.7 time PE for 2011 (forecasted) so I think that's way too cheap.. so I'm Long MEGB!

Full Disclosure: Yes, I do own shares in MEGB.

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