Our website is made possible by displaying non-intrusive online advertisements to our visitors.
Please consider supporting us by disabling or pausing your ad blocker.
Perstima returns over the past decade had been declining. Its 2024 and projected 2025 returns are negative. It falls into the Quicksand quadrant in the Fundamental Mapper.
Looking at this picture, you may think that there is no hope. But the Fundamental Mapper is based on trend projection. It would also not be realistic to simply project continuous declining returns. Management is not going to sit quietly without some turnaround plans.
In the case of Perstima, the performance over the past 2 years were dragged down by the start up of its new plant in Philippines. Furthermore the declining returns was because while there was revenue and profits growth, there was faster growth in capital as funds were needed for the Philippines expansion.
The future is not going to be the same as the past decade. As such I would expect a turnaround and a return to profitability in the not too distant future. Are you going to wait for this to happen before entering, or would it be better to enter now when the market has yet to recognize this turnaround potential?
Perstima is a consumer of tin as an input for its products. In the face rising tin price now in the 25k USD, it's tough for the company to make money; the stock price is likely to keep sliding with no end in sight.
If one looks at the chart, the current price of around RM3.5 is the average floor price for the last 10 years. The stock is hanging precariously on this critical line; any breaches below this line will spell a very negative trajectory
Hopefully, the management will continue to pay out dividends from the pile of cash reserves despite poor financial performance; that might help shore up the current stock price