Challenging Times

Malaysian consumer stocks seem to be facing headwinds in tandem with a prevailing bearish sentiment affecting the consumer segment. Hovid Berhad, a pharmaceutical company based in Malaysia has seen its share price falling to 1-year low of MYR0.345 per share.

Hovid_GP.png

Is Hovid in an oversold position? Or is there is any further downside risk? The technical indicators (shown below) seem to suggest that Hovid is currently in an oversold position. There could be some potential support at MYR0.34.

7213.MY.jpeg

Further, BIMB Research has a recent target price of MYR0.39 for this company:

BIMB.png

In tandem with the movement of its underlying, Hovid-W (warrant) fell to its 24-month low of RM0.16 per share. This instrument has an exercise price of RM0.18 per share, with warrant expiry  by June 2018.

Regressing the share price of Hovid-W against Hovid and Days To Expiry – it appears that Hovid-W is reasonably valued at this juncture, actual RM0.16 vs predicted RM0.166, with a  95%-confidence interval of between MYR0.136 – MYR0.195

hovid-forecastregressionupdate

The above analysis is a high-level desktop analysis. Further detailed analysis (including the use of the appropriate option pricing models) shall be required.

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES OR RELATED INSTRUMENTS MENTIONED ABOVE.

Author: Ken Utau

Data Scientist, Markets Analyst and Food Lover

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