This counter seems to be my 1st favourite stock in 2011. Can this counter bring me a good return? by referring to what were reported in this article, MEGB has strong balance sheet, with a cash position of RM277 million as of 30 Sept 2010 which was improved by RM57 million from RM220 million as of 30 June 2010. MEGB's net profit margin is quite attractive at above 30%, i have to own this business, its PE is around 8.75 times based on RM2.08 closing price at 30 Dec 2010, which appears relatively lower as compared to HELP and SEG. it had been down 42% from its IPO price and the reason given from CEO was due to the disposal of shares by one of the foreign investors. if the reason given is true, buy low sell high strategy may be able to apply it here.
Althought there are some issues of the delay of operation in Kuching campus and JB campus and PTPTN matters, i will regard these issues as a bonus if MEGB's management can resolve it. Looking at current profit level which contributed from those campuses with currently in full operation, it is already good enough for me.
Other potential upsides are low gearing, high financial capability for future expansion, education counter is deemed as defensive stock.
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