There are two essential issues to remember when valuing MOC 1) The company holds no or miniscule debt so it is unlikely to become insolvent even if the industry goes through a prolonged period of instability. 2) MOC operates as a franchise system. Given that franchise holders have paid significant money to obtain a franshise and then lease premises, they are not going just exit the industry if times get difficult.
There is no doubt that 2009 financial year will be difficult. But at current share prices you are being compensated for that fact. In my opinion there is not point waiting until a confirmed turnaround to buy, because there is no way the stock will still be trading at current prices if the industry becomes more positive again.
Thus you have a choice of either buying at current low prices but with the uncertainty of when the industry will pick up, or you can wait for an industry turnaround and then buy, but expect to pay significantly higher share prices (in my opinion more than 50% of current prices)
MOC Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
