Then you may wonder what is the criteria to pick up the next star in tech stock. Here, I do study some Malaysian tech stock and there are few as following:
1) Business that enable to bring profit
Most of the tech stock promise wonderful story and bright future. In order to earn uncommon profit from tech stock, we should focus in their coming quarter report to ensure the earning power of company instead of confuse by those sounded story. Do they deliver the promise is very important. If they dont,you must sell them without hesitation.
2) Acceptable PE <30
In general, the common PE for tech stock is around 20 to 50 in Malaysia. However, I will pick up the tech stock with PE as low as possible.
3) Must be in Green!!!!!
NEVER EVER invest tech stock that incur loss continuous for few quarter. You will never know that the company will go back profit or your stock become a worthless paper!
Optional... A potential tech stock should consists at least 4 from below:
4) Transfer to Main board trick
For your information, many tech stocks are listed at ACE market instead of Main board. Whatever the company said they aim to transfer into main board, the share price normally will raise. I think this is because that action proves the company fundamental is strong enough and eliminate the bad image of tech stock that have low earning and ridiculous pricing. However, the procedure of transfer to main board is time consuming and there is uncertainty in successfulness.
5) Dividend DY>1%
That is very important for a value investor.
6) Many corporate activities
This gives point for people to speculate and that is the most exciting for invest tech stock. For examples : bought by XXX institution, bid for XXX project, First time bonus issue, share split .......
7)"Cheap" enough
Tech stock that below RM 1. Easy to attract speculator.
8) High profit margin >10%
Finally, Monitoring closely .You should never buy tech stock if you lack of time to monitor because the changes of the industry is very fast for tech stock. Their product can be outdated at unforeseen period.
There are 6 tech stock that I think are worth to put in watch list
1) Digista
2) Iris
3) EAH
4) IDMENSN
5) Inari
6) ECS
Iris,0010 a stock that worth for putting it in your watch list....
detail- technology company
business:
1) IC--the world's first electronic passport and national multi-application smart card with the implementation of the Malaysian Electronic Passport in March 1998 and MyKAD
2)Environment friendly tech
3)building tech- IBS system which prevent the house collapse from earthquake
4) others
business are divesified into more that 30 countries
close relationship with govt for few countries
current share price rm 0.5
PE 30
ROE 6
net profit margin 5%
DY 1%
NTA 0.27
major shareholder -Felda 25%
not net cash company and lack of cash currently. iris planning for private placement now to raise cash.
Despite its weak fundamental currently, its business prospect is bright. It worth to invest if those project taken bring in $$, EPS can double up within one year to 3.2...the share currently fluctuate between 0.45 to 0.53.
