Anything left for Telekom Malaysia in March?

Telekom Malaysia current daily volatility is 5.34 percent, with beta of 0.0 and alpha of 0.0 over S&P 500. Macroaxis considers Telekom Malaysia abnormally risky given 1 month investment horizon. Telekom Malaysia Berhad owns Efficiency Ratio (i.e. Sharpe Ratio) of 0.1508 which indicates the firm had 0.1508% of return per unit of risk over the last 1 month. Our philosophy towards measuring volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. By inspecting Telekom Malaysia Berhad technical indicators you can presently evaluate if the expected return of 0.8049% is justified by implied risk. Please operate Telekom Malaysia to confirm if our risk estimates are consistent with your expectations.
Published over a year ago
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Reviewed by Ellen Johnson

This firm has accumulated 2.21B in total debt with debt to equity ratio (D/E) of 126.1 indicating Telekom Malaysia may have difficulties to generate enough cash to satisfy its financial obligations. The firm dividends can provide a clue to current valuation of the stock. The entity is not expected to issue dividends this year as it trying to preserve or re-invest any of the funds available for distribution to stakeholders. Let me now analyze Telekom Malaysia Return On Equity. Based on latest financial disclosure Telekom Malaysia Berhad has Return On Equity of -0.75%. This is much lower than that of the sector, and significantly lower than that of Return On Equity industry, The Return On Equity for all stocks is notably higher than the company.
Telekom Malaysia financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Telekom Malaysia, including all of Telekom Malaysia's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Telekom Malaysia assets, the company is considered highly leveraged. Understanding the composition and structure of overall Telekom Malaysia debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Watch out for price decline

Please consider monitoring Telekom Malaysia on a daily basis if you are holding a position in it. Telekom Malaysia is trading at a penny-stock level, and the possibility of delisting is much higher compared to other pink sheets. However, just because the pink sheet is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Telekom Malaysia stock to be traded above the $1 level to remain listed. If Telekom Malaysia pink sheet price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.

How important is Telekom Malaysia's Liquidity

Telekom Malaysia financial leverage refers to using borrowed capital as a funding source to finance Telekom Malaysia Berhad ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Telekom Malaysia financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Telekom Malaysia's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Telekom Malaysia's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Telekom Malaysia's total debt and its cash.

What is driving Telekom Malaysia Investor Appetite?

The latest price spikes of Telekom Malaysia may encourage investors to take a closer look at the company as it closed today at a share price of 0.64999998 on 0 in trading volume. The company executives were quite successful positioning the company components to exploit market volatility in March 2019. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 5.3393. The very high volatility is mostly attributed to the latest market swings and not very good earning reports from some ot the Telekom Malaysia Berhad partners. Telekom Malaysia is trading at 0.65. Day high is 0.64999998.
Taking everything into account, our final buy vs hold vs sell advice on the firm is Strong Sell. We believe Telekom Malaysia is overvalued with below average probability of distress for the next two years.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of Telekom Malaysia Berhad. Please refer to our Terms of Use for any information regarding our disclosure principles.

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