We, as investors, will do company analysis to assess securities, gather information identified with the companys profile, products and services as well as profitability. We need to remember that when we are purchasing a stock, we are turning into a part owner of that company. When moving toward investment in the stock market there are two basic methodologies utilized: fundamental analysis and technical analysis. Fundamental analysis watches various components that affect stock prices such as sales, price to earnings (P/E) ratio, profits, earnings per share (EPS), as well as macroeconomic and industry specific factors (InvestingAnswers).
Technical analysis is a method of examining and predicting price movements in the financial markets, by using historical price charts and market statistics (IG).
We choose Maxis Bhd to buy stocks from as our investment because of its advantages over other telecommunication companies. As a comparison let us take Axiata, Maxis’s #1 competitor. Maxis Bhd, which posted a net profit of RM397mil in the second quarter ended June 30, has proclaimed a second interim tax-exempt dividend of 5 cent net per share.
Its earnings per share stood at 5.10 sen (Leong Hung Yee, 2019). On the other hand, AXIATA Group Bhd posted a net profit of US$48.42 million (RM204.09 million) in the second quarter ended June 30, 2019 (2Q19). Axiata pronounced a tax-exempt dividend of 5 cent per share (Digital News Asia, 2019). We can deduce that Maxis has the ability to earn more than Axiata based on the comparison. Apart from that, Maxis Bhd have an EPS(earning per share) of 20.
27 cent, EPS figure is derived from net income divided by total outstanding share. The net income for Maxis Bhd for the year 2019 will be 452 million divided by total 2.23billion outstanding shares to get 20.27 of earning per share. (The Star Online, 2019)
We get the P/E ratio of 27.63 of Maxis by computing RM5.60 per share in the stock market divided by 20.27 cent of EPS. For the stock price for Axiata will be trading at RM 4.32 per share divided by -6.76. ( News Straits Times, 2019)
Maxis has covered up 35% market share in the telco industry in the country, being the strongest in the postpaid portion with an average revenue per user (ARPU) and subscriber base which are 23% and 17% respectively higher than that of Digis (P. Aruna). G?khan Ogut, CEO-designate of Maxis stated that there is a ton of energy in the company, and keeping in mind that they have done a lot during the quarter, it is only the start of what we see as an energizing future for Maxis.