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Penny stocks create nice surprise
Financial reports for the first half of the year have brought a nice surprise to investors. Penny stocks, which have never been popular, have woken up suddenly, as companies have reported good business results.
Stocks cheap, profit high
The ‘middle-brow’ penny stocks have surprised a lot of investors as the companies announced high profit for the first six months of the year.
Shares of Ha Tien Cement Company (HTV) had never caught the special attention of investors before. HTV was also among the share items which had the lowest market price (just a bit higher than face value). Meanwhile, Ha Tien Cement Company has announced a sharp growth rate in the first six months of the year with the post tax profit of 14.216 billion dong, an impressive increase of 465.4 percent over the same period of 2008.
The Hang Xanh Automobile Service Company has announced the post tax profit of 2,181 billion dong for the second quarter of the year, up by 209 percent over the same period of last year. The accumulative post tax profit of Hang Xanh reached 5,525 billion dong in the first six months of the year, an increase of 257 percent over the same period of last year. Meanwhile, Hang Xanh’s share price (HAX) is hovering around 20,000 dong only.
Shares of Ha Tu Coal Company (THT) have also been hovering around this level, which is believed does not truly reflect the health of enterprises. Ha Tu has announced the profit of the first half of the year increasing by 171 percent over the same period of 2008, at 15 billion dong.
Khanh Hoi Import-Export Company has reported the post tax profit of 23 billion dong (+ 257.46 percent), while others have seen profit increasing by over 100 percent over the first half of 2008, namely Construction Company No 7 (+122 percent), Vinaconex (+160 percent).
Analysts have predicted that the unexpected high profit of the companies of penny stocks and the moving back of many big companies of blue chips will create a breakthrough in the market in the time to come.
Waiting for the breakthrough to come
While small companies have made impressive breakthroughs in their business, the big guys have discouraged investors as they were thwarted by the economic downturn. Vinashin Transport Investment has reported a third consecutive quarter of loss, dating back to the fourth quarter of 2008. Nam Viet Company has reported the accumulative loss of over 80 billion dong in the first six months of the year.
A securities expert in HCM City said that when the finance report season began a couple of weeks ago, investors were of two minds. They had to choose either blue chips, which were forecast to have good profit but unattractive prices, or penny stocks, which were forecast to have low prices but low profit.
However, the situation is quite different now with many market segments. There exist blue chips which have high profit and high liquidity though stock prices are unattractive. These shares appeal to adventurous investors. There are also penny stocks with soft prices, while the companies have impressive growth rates, suitable for medium- and long-term investments.
The expert said that the market will see clear investment tendencies in the time to come, after all financial reports are released.
According to the Dai Viet Securities Company, though the VN Index has decreased by 20 percent only over the beginning of June, many blue chips have just decreased slightly in price. Therefore, it is unfeasible to seek short-term profit from the share items. Investors have been advised to think carefully when making investment decisions in this period.
vietnamnet, dtck
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