$POHKONG (5080.MY)$ I'm a beginner and I have a question to ...
$POHKONG (5080.MY)$ I'm a beginner and I have a question to ask you experts. If the Federal Reserve lowers interest rates, will the price of gold rise? So is it appropriate to buy POHKONG now?
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103179399 : In order Poh Kong to raise price, gold price is one of the factor. Another factor would be the sales and earnings of Poh Kong as well. In other words we need increase in price of gold + increase in sales & net earnings result to determine whether the share price would rise.
Kai Loon OP 103179399 : You mean, even if the gold price goes up, but there is no sales, POHKONG will not benefit from it. What if the gold price stays at this high level for a long time? Based on past data, does he usually benefit at this time?
Kai Loon OP 103179399 : Will it better if I consider GOLDETF?
103179399 Kai Loon OP : Usually it will be benefit if the gold price stay high in long term, but at the same time their cost of inventory will increase as well because new inventory price also will increase. So still have to look at their inventory turnover, sales and net earnings.
If you just buy base on the rising in gold price you may have to give it some time for the stock price to move up with low dividend yield which in my opinion there could be an other better option if the waiting time frame is too long.
Base on my calculation the fair market value is about RM1.20 and future market value could have potential to reach about RM1.80. The future value base on future PE ratio calculation would be about RM2.00 if Poh Kong able to achieve 28.28% growth within 1 - 3 years. These could be achieve only if we factor in continuously increase in sales and net earnings as well, so if base on rising in gold price alone there will be no guarantee.
103179399 Kai Loon OP : For gold ETF you may have to look at the components of the ETF. Some of the gold ETF they may represent gold mining stocks and etc, these you may have to study and look into it as well.
Kai Loon OP 103179399 : I see, thanks a lot