News – Beaten JCY recoups losses after CIMB’s “trading buy” call

What you see is not what you get. Someone or something is obviously unloading JCY starting 17/8 until 24/8. But now CIMB is recommending a “trading buy”? They who already despise this unwanted stock need someone to take the baggage because in this environment, when someone selling there must be someone on the other side who is buying. Therefore, to cut to the case, when someone profit from stock market, there must be the other side who had to bit the bullet and hold on to losses. To create and induce the appetite of buyer to buy the “unwanted” stocks, is the role of media. With news from “credible” source (Bankers. Who say bankers are bad? They had the welfare of the masses in their [stone cold] heart)and a bit of sparkle here and there, no need much effort (except couple of thousand bucks for fees) to entice the unsuspected masses to buy the unwanted baggage.

 

Last Friday, CIMB said in a short note that its researcher had spoken to the management of JCY, the world’s leading maker of HDD, to find out the reason for the company’s Thursday share plunge. It said:

“We spoke to the management briefly and apparently there is no company specific news that is causing this sharp decline. However, HP and Dell had provided below consensus guidance for the September quarter over the past two days, citing continuous weakness in the PC demand. The market may be reacting negatively on this news as the weak PC shipments will weigh down on HDD demand, and hence, affecting JCY’s earnings.”

And in the Friday report, CIMB – which has a target price of RM1.41 for JCY — said fundamentally it still has a Neutral rating on JCY as it is concerned on the slowdown in HDD demand due to the weak notebook PC sales, evident from the 8% m-o-m sales contraction for the top 5 notebook Taiwanese ODMs in July.

“However, we believe the stock (now) looks attractive from a trading angle after the sharp pullback in share price. At RM1.12 (on Friday), the stock trades at 4.8x CY13 P/E and offers 9% projected yield. We would advise short-term Trading Buy.”

 

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