Buy xxxx-OR to gain stable profit

Stock counter that usually offer OR with attach warrant will usually comes with good profit.

The reason is simple.. because the OR price is evaluated at ZERO warrant premium. Take the very recent example starting from PJI to latest MBSB.

1) PJI-OR selling at 6 cents to 7 cents. when PJI share is about 13 cents. Every 2 OR Subscribe will give you 3 warrants, I guess this is what we are looking for. The reason for the OR to be price at 6 cents is actually way too cheap. But why? because the warrants is having 10 cents exercise price. So everyone would think that the warrant FAIR price should be at 3 cents upon selling.

So you get 7 cents OR + 11 cents conversion = 18 cents = 13 cents PJI + 1.5 x warrants (4.5 to 5 cents). So basically that's how OR being perceive.

But 3 cents for a warrant is just too cheap. The reason is because warrant always get goreng up and it will sure have a at least 20 to 30 % premium.

So when it comes to selling day. PJI share is at 16.5 cents, and warrants worth 10 cents each.

if you hold longer PJI share can be sold at 18.5 and warrant at 15 cents.

total investment is 2x7 cents + 2 x 11 cents = 14+ 22=36 cents.

total selling = 2x 18.5 + 3 x 15 = 37 +30=67 cents

ROI = 30/36 = 83%!!

2) MBSB - MBSB-OR if you buy at 1.100 or 1.00 (cheapest) total investment you need RM 1.00 + RM 1.00 conversion. on warrant release day. you get to have 1 mother which you can sell at 1.47 + 0.70 (warrant) = 2.17 . = 8 % gain immediately. But wait, if you hold on longer. I believe MBSB share would eventually reach 1.7 and warrant would eventually reach 0.85, that's the time your profit may reach 20% gain.