Ok, I see a lot of topics on stocks that are really speculative, companies with zero earnings but yet still garnering all these attention.
First of all, I would like to get people of the kind to look into stock that has 'value', and by value it implies stocks listed on the local bourse with either good dividend payout, good earnings and strong financials.
Let's get right into the picture, HOW DO YOU analyze a local stock. First of all, you go to bursa's website and you can find quarterly reports on companies:
Reports are broken down into 3 time categories ie, current, historical and archieves. (This is probably the dumbest web programming I've seen as well)
So basically everytime you have to go through all 3 categories to extract data from different period, why can't they just list things chronogically??
For beginners, let's do an analysis of GPACKET, aka the potong now ISP. Remember that ALL financial reports would be broken down into these categories,
1. Income Statement
2. Balance Sheet
3. Cash Flow Statements
4. Statement of Changes in Equity
Normally, I would look at 1-3, occasionally 4 to check whether there's any big changes or dilution to equity.
So I found GPACKET's latest financial report in this file. GPB – Unaudited Results Q2 2010.pdf
Looking at the income statement, nothing special here. Revenue increase by 53%, but operating expenses increased by close to 46% as well.
Losses widened by 27.5% to $35.9 million.
Looking at current assets, you would find that compared to a year ago, current ratio (current assets / current liabilities) went from
1.45 to 1.02. Personally, this is very alarming for me. A low current ratio would mean this company might need to borrow more money in the short term to cover operating costs. Or else, they can make an additional stock offering, selling more stocks to get more $$. But that would mean dilution to their earnings, if they ever start making money.
So my question to the average investor is, you might like P1 Wimax and their concept a lot, but do you want to invest your money in a company that has ZERO earnings? It has never made any profit yet, but yet the stocks sells for like $0.90. I can find 10 stocks easily that beats this price and offer better returns.
Anyways, this would become a very long post by therefore I need time to write more!