Monday, 29 March 2010

Undervalued good quality stocks in KLSE

Is KLSE over-valued?  What is KLSE market PE?

The historical market PE is around 10 to 20, averaging 15 over the long term.   With the KLSE index at 1312.48 recently, the  market PE was 19.23  (Source: iCap website).   This market PE was at the upper end of the normal market PE range.  The index-linked counters are probably trading at fair or high value. 

However, if one were to browse through the stock section of our local papers, there are still many stocks trading below ttm-PE of 10.  Many stocks maybe priced such due to lack of 'popular support' or 'neglect'.  They maybe 'fallen' stocks.  Amongst these, there are good quality stocks that are undervalued even in the present market.

If you discover any gem(s), please share here.  




Also read:

29 comments:

Anonymous said...

My hidden gem is Kelington Group (KGB)

Anonymous said...

my hidden gem is xinquan. neglected pobably because several china stock listed in bursa not doing well. last q result very impresive.

Anonymous said...

ntpm, management-good.product-ok.branding.ok, growth-ok, margin-ok.balance sheet-ok. shud worth at least rm1. negative- boring counter, slow.
zas

Polite Market said...

Mine is Freight Management. Recommended by the late Choong Khuat Hock weeks before he pass away. RHB fair value RM1.30 - RM1.40. Also recommended by Malaysia-Finance Blogspot.

Robust Mind said...

im eyeing wellcall, ntpm, mamee and zhulian...
fundamentally excellent for long term investors

K C said...

Hi, have a close look at DUFU. Consistent good growths in revenue, earnings and cash flows, excellent profitability and management efficiency, in the industry at the front end of recovery; But selling at low price-to-sale, price-to-earnings and price-to-book values. Does not seem to be flash in the pan as the most recent quarter earnings doubled.

Anonymous said...

I think the China shoe stocks are THE BEST in THE WORLD.

Multi Sports
K-Star
XDL


PE Superb low
G Still got Moderate growth
G Gearing zero, net cash
Y Yield-dividend more than 10%


BUT I DON NOT trust China shoe stocks. Is the figure real??? Most research also having about the same figure. Can they achieve it?

PoliteM

Anonymous said...

MBMR very attractive at current level.(Rm3.00). forwaard pe less than 5 with net cash rm110m. Increase in rm against yen is an added boost.midterm investment.
zas

bullbear said...

23/11/2010 Coastal: Quarterly revenues and earnings continue to climb. Yet its price remains unchanged. ROE 36.4% PBT Margin 27.9% ttm-EPS 55.04 sen ttm-PE 4.22

bullbear said...

23/11/10 Guan Chong

http://myinvestingnotes.blogspot.com/2010/11/guan-chong-berhad.html

AT 1.81 per share, its market capitalisation is RM 434 million. This is a company generating more than than a billion ringgit in revenue per year. Its earnings have improve substantially over this year.

Negatives: High leverage, low profit margin

Positives: High asset turnover, improving margins.

Should business of this company be maintained or continues to improve, investors may re-rate its present low PE.

Anonymous said...

My hidden gem is ASB (ADVANCE SYNERGY BERHAD)

http://www.asb.com.my/

At current price of 19 sen, it is the cheapest mother share in the whole of KLSE.
PE of 3.
Eps of 6.62 sen.
Cash per share 53 sen.
Net Worth per share 98.9 sen.
Net Cash RM113.8 million.
Par Value 30 sen each.
High Profit Margin.
Constant Turnover of > RM200 mln.
Definately a value stock to keep for long term returns.

bullbear said...

Based on my own assessment, ASB is not a high quality stock.

Anonymous said...

Why ASB is not a value stock?

Anonymous said...

Since my question was posted, "why ASB is not a value stock?" as you mentioned. You cannot answer back my question straight away. But how come you can straight away answered me that ASB is not a high quality stock. Sorry to say you could be a bit "biased" in your mind or maybe your analysis on ASB was done too long ago. Apology.

FYI, I have myself checked ASB accounts and have followed up announcements made by ASB quite thouroughly from 2000 right up to now. I noticed ASB has inproved tremendously in growth, cashflow and accounts. Based on these two years, they have turned from losses to profits. Their Cash balances increased year by year. Their accounts have improved after they have written off their losses by capital reduction exercise done in 2008. The two outstanding court issues are also in their favour. Once these issues are over, their Cash balance will be tripled or even more. Their present Cash in hand alone stands at RM113.8 million. Given the same trend in business undertakings for next 3 years, I am confident ASB can become very successful all round. I cannot write more due to limitation of writing space alloted here.

That's why I regard ASB as a highly value stock not based on what I guessed or listened but based on what I have done my research on ASB. ASB is indeed a rear hidden gem. Maybe many people have overlooked. Once bought, we must keep ASB for a medium to long term investment?. Best Regards.

bullbear said...

Anonymous,

You may wish to refer to my discussion in Investlah on ASB here:

http://www.investlah.com/forum/index.php/topic,13340.msg239439.html#msg239439

Regards

bullbear said...
This comment has been removed by the author.
Anonymous said...

OK lah I didn't know you were there also.
It shows how naive I am.
NVM, BTW TQ so much. BB.
Regards.

"Merry X'mas & A Happy New Year"
Everybody must huat together.
"Huat" arh..........

Anonymous said...

ASB not quality stock, poor management forsight therefore grossly undervalue, hope Management can come out with New Business propose I have kept the shares for many years hope it bear fruit. best of luck!!

Anonymous

Anonymous said...

I hope the bull run for ASB will continue.
Reasons being:
1. Interested parties like ACE INA may acquire all the cheap shares available in the market.
2. Another interested parties may block ACE INA possible acquisition by acquiring more shares in the public. No harm afterall.
3. Announcement of the 4th Qtr Report is coming soon. Profit announcement may trigger more Buy Calls for ASB.

Anonymous said...

ASB is not a quality stock , ASB announce 2010 result drop a bomb, profit drop 100% due to 100% increased in operating expenses.

CK TAN said...

I Love Uchi Technologies...

Anonymous said...

Strong takes r ARMADA, BIMB, MAXIS, MAYBANK, MBMR, TM, AXIATA

Anonymous said...

DIALOG, 1 of few plc awarded with mega project in O N G sector. This project rightfully has great commercial potential/value if implemented/executed professionally. Indeed a high growth Gem in the making......

Anonymous said...

Situated strategically, DIALOG will soon be the O N G expressway to the region, many times the size/business of PLUS. What say U, dear BullBear ?

kjgooi said...

Hi Iiinvestsmart,

My bet is on SKPRES:

2012:
Revenue:419million
Net Profit: 38.24million
NP Margin: 9.12%
ROE: 21%
Short term loan: 0
Long term loan: 0
Cash: 61.9million
Dividend: 15million
Dividend yield: 7.14% at price of 0.345.

Please share your view.

kjgooi said...

Hi Iinvestsmart,

Please comment on SKPRES.

Thanks.

kjgooi said...

My forecast on SKPRES:

2013:
Based on Q3, Q4 results: 15million/quarter
Annual Net profit=15*4=60million

DPO=50%
Dividend=60*.5=30million

Dividend yield=30/310.5*100=9.67%
ROE: 60/181.3*100 = 33%

Right or wrong, please comment.

Anonymous said...

KLCCP, if it plans to spin off into prop REITS like Kassets for Mid Valley MM n I believe they will do it soon, it shall be worth at least $10.00, basing on the good earnings... All current giant Prop REITS r priced way above PE 20X. KLCCP has an added iconic franchise value. And Prop REITS has less corporate tax, therefore higher valuation potential, can someone Check this up ??

This spin off is an active re-valuation exercise thru a simple multiplication factor to making fast n sure money.

Anonymous said...

Mkt review :

Issac Newton's law of motion is still perfectly applied to this mkt even today.
He quoted n I paraphrase, "A growth stock in motion will always be in motion until it is forced to stop by an external/global events"

These growth stocks will go on to be the greatest winning stocks = Ms Universe stocks. And they r few !

Their exponential rise is usually accompanied by Theme play on a high speed 'herd highway' as follows:

1st movers :
1. Telco, lead by MAXIS, TM to DIGI, AXIATA
2. Banks, lead by Maybank to PBBANK, HLBANK
3. Foreign managed PLC, DLADY, CARLSBG, AMWAY, AEON, ALLIANCE etc

2nd movers :
4. Motor, UMW to MBMR
5. Spin off to REIT, KASSETS to KLCCP
6. New-Highs : HARTA, ORIENT, PADINI, ZHULIAN, etc n more to come !

The key to all these is NEW-HIGHS.

http://klse.i3investor.com/servlets/forum/900000315.jsp?fp=2

http://klse.i3investor.com/servlets/cube/post/purebull.jsp