It has been some time since I last shared my investment theories and philosophies. I had been busy engaging in a couple of corporate exercise recently, and I hope you are doing well so far!
Anyway, let's back to our key topic today - would the extension of CMCO by 2 weeks affect our star of the year - ARB Berhad (7181) ?
Let's look at the price chart for a better view of the company's performance.
To be fair, the share price of ARB Berhad had been consolidating for some time. And we could see the volume has been reducing drastically. A major support level as we can see here would be RM 0.250, and this means that the selling pressure and pundits are removed from the company! But enough about the support level, let's talk about the effect of CMCO and growth prospects of this company.
First off, CMCO will NOT affect ARB Berhad badly. Just take a look at their results on FY 2020 Q1 & Q2, do they get hit bad on MCO and CMCO?
NO! In fact we still saw an increase of 34.71% YoY on the Q1 of the company. Hence we can expect the company to make at least RM 7 - 9 Million in the next quarter that will come really, really soon..
Why won't ARB Berhad get hit by CMCO? Simple, it's due to their agile and powerful business model indulged in ERP as well as IoT sector. Without heavy CAPEX and maintenance costs, ARB Berhad establish a win-win situation with their clients, and hence will continue to thrive in whatever market condition!
That being said, would the company grow in the future?
Let me ask you this: With the implementation of industrial 4.0, would you see more use of ERP and IoT, or less?
You have the answer.
So, a company that had a strong support level @ RM 0.250, resilient business model and high growth prospects, trading at P/E of less than 3 now??
PICK IT UP BEFORE ITS TOO LATE!