Petra Energy is one of my major investments. I bought it because it complies with my stock selection criteria. Among all the stock selection criteria such as NTA, cash flow, healthy balance sheet, EPS and dividend yield etc the most powerful catalyst to push up share price is profit growth. It reported EPS 7.57 sen for the quarter ending Sept and EPS for its previous quarter was 0.43 sen. I expect its next quarter ending December to be better than 7.57 sen. Koon Yew Yin
If you read my last article "Why Petra Energy price is going up" carefully, you will know that it has 3 oil rig maintenance contracts with Petronas, Petronas Carigali and Sarawak Oil extended for 1-2 years. That means it will continue to report increasing profit in the next few quarters. One big investor put 100,000 shares to sell at 88 sen just before the end of trading today to stop its price to go up because he wants to buy it cheaper. Koon Yew Yin
1. I do not have shares in Penergy but have the itch and desire to write an opinion and post it. 2. Penergy has just announced its 4th quarter result. It reported a revenue of 110m and a profit after tax of 7.9m which is less than market expectation. It is therefore,not entirely wrong to say Penergy had a missed quarter performance.
3.Nonetheless, on a full year basis the company has managed to achieve a revenue of 370m and generated a profit after tax of 13.07m 4. The company has issued share capital of 321m. Its earning per share is 4.06 sen. At the current price of 83 sen, it is therefore trading at a price earning multiple of 21.78x 5. Considering that the Bursa PE is between 13x to 15x, Penergy is thus somewhat fully valued. 6. The company has a sound and strong balance sheet. Its net tangible assets is 1.21. 7. For the current year it has paid out 2 sen dividend and also declared another 3 sen final dividend in the 4th quarter. 8. The company has a surprisingly impressive cash and bank balances of a massive amount of Rm184.8m. And more impressively, it has no long term debts and borrowings but short term liabilities of Rm36m that does not have significant financial burden and impact.
9. Despite its less than favorable profit performance, Petra was able to generate a remarkable and commendable net cash flow from its operating activities of a massive amount of Rm65.69m
10. On the whole, the company's business is still profitable and sustainable. It has a healthy balance sheet with sound financial ratios. The business continued to generate free and net cash flow. 11. The 4th quarter less than impressive profit performance is just a temporary setback. 12. A knee jerk sell down is not unexpected. Nevertheless, it is not surprising.
13. Therefore the sell down and fall in price is not alarming. In stead it opens up an opportunity for you to buy cheap for long term value investing.
14 This is my personal perception and opinion of the counter. It may be wrong. Trade cautiously.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....