Recently all the price charts of glove stocks are showing down trend because there are too many glove stocks in the market due to right issues, share placements and bonus shares. As a result, all the glove stocks are selling at very low PE.
I will only sell all my glove stocks when the Covid 19 pandemic is completely under control and the demand for medical gloves is reduced. Currently the number of new cases in almost every country in the world is still increasing at a faster rate, especially in the US.
Currently US has a total of 14.983 million Covid 19 cases, 8.788 million recovered and 287,825 deaths. The daily number of new cases is still rising as shown on the chart below.
US had more than 4 million Covid 19 new cases in November, doubling the record set in October. US has the most Covid 19 cases in the world. No country can beat the record set by US. Due to the mass gathering to celebrate Thanks Giving, a new record of more than 4 million Covid 19 cases will be set in December.
Safety guidelines: At a minimum, gloves must be used where there is reasonable anticipation of employee hand contact with blood, other potentially infectious material, mucous membranes, or non-intact skin; when performing vascular access procedures; or when handling or touching contaminated surfaces or items.
All medical staff must wear glove to inject vaccines.
Currently due the Covid 19 pandemic there is already a shortage of medical glove.
Additional glove will be required when UK and US start to vaccinate their people.
According to CDC, central disease control, to prevent the spread of the coronavirus at least 75% of the population must be vaccinated. It will take a long time to produce enough of vaccines to vaccinate so many people. Moreover, it will also take a long time to produce so much of medical gloves to meet the demand.
After careful research I found the following comparison among all the glove stocks.
Based on the latest closing share prices of all the glove stocks, Supermax is the cheapest in terms of PE ratio. Moreover, it has the best profit growth rate. Its latest quarterly profit is double the previous quarter.
Even if I assume the selling price for gloves is not increased for the whole financial year, all the glove stocks are selling at very low PE as shown on the table below:
Name Price Quarter EPS 4XEPS PE
Supermax Rm 8.29 Sept 30.58 Rm 1.22 6.8
CarePlus Rm 2.60 Sept 8.00 32 sen 8.1
Comfort Rm 3.73 Oct 10.30 41.3 sen 9.0
Top Glove Rm 6.65 Aug 15.95 63.8 sen 10.4
Kossan Rm 6.10 Sept 13.6 54.4 sen 11.2
Rubberex Rm 1.73 Sept 4.96 19.8 sen 18.8
Hartalega Rm 14.50 Sept 15.95 63.8 sen 22.7
Instead of selling my glove stocks, I should consider to buy more glove stocks, especially Supermax.