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Monday, December 27, 2010

Syed Mokhtar stocks 'kena goreng': Missed out DRB-Hicom? Missed out TWS? No worries, don't miss out BERNAS (RM2.83; Target: >RM4.20)

From the way Tradewinds (TWS) is moving up for the past two weeks, we can clearly see that this is the right stock that will continue to rally in the coming days and weeks. This is going to be the darling stock of KLSE next year. In every bull run, there are always a few Superstar counters. TWS might be one of them.

Here comes Bernas, a subsidiary of TWS which owns 70% stake in its paid up capital of RM470m. Share price of Bernas rose fantastically last Friday and caught the attention of all Malaysians who invest in KLSE. It went up by more than 50 sen in one day and was the top gainer.

Let's look at the business of Bernas .It has a near monopoly business of rice in Malaysia. Its profit was quite unpredictable for many years due to its inability to raise the price of rice which was a controlled item in Malaysia for many years. When the price of rice went up in international market and the government did not allow it to raise the selling price of rice locally, it lost money in that particular quarter or that year. Thus, it used to be a laggard stock for a long time and very few people wanted to buy and keep it. Nonetheless, since TWS bought the majority stake of 70% at the end of last year, things started to change. The present government is more flexible in allowing the company to raise the price of rice locally when the price of rice in international market goes up. Thus, from now onwards, its business and profit will be more stable as shown by its three quarter results this year making near to RM50m profit in each quarter!

It will make close to RM200m net profit this year. Based on the closing price of RM2.83, the EPS and PER are just 42 sen and 7x only. In other words, even with current share price of RM2.83, the share is still considered cheap as compared to many other food companies which have PER of at least 15x. Look at F&N, QSR, KFC, all are industry leaders. Bernas is another industry leader. It has no business trading at current levels. At PER of 10x, the share is worth at least $4.20 and at PE of 15x, it will be $6.30.

In addition, Bernas is very generous in its dividend payment. It paid a 24% dividend last year, giving a net yield of 6.5%. It has a near monopoly in the rice industry in Malaysia and thus has the ability to set the selling price of rice in Malaysia. It also has 30% stake in Gardenia Bakeries which is one of the most popular bread manufacturers in Malaysia and 45% stake in United Malayan Flour. Thus, it is a gigantic food company generating a turnover of more than RM3b per year and making profit of RM200m yearly. How can its share price stay low for a long time? Incomprehensible!! It has just started to roar and will continue to do so just like other food companies like QSR and KFC.

Thus, I think it will become another Superstar just like its mother TWS. Syed Mokhtar counters are getting very 'garang' and hot lately. DRB-Hicom and TWS have moved up substantially, though I believe there's more upside, Bernas is just starting to move up. Therefore, don't miss out on this possible winning stock!!


By William Koay

Sunday, December 19, 2010

Who is this NENO or TAS or whatever? Someone who has lost money and spam people's blogs with his rants? - In reply to his post

neno said...

Dali called to buy JCY @ 1.60 , JCY is now 0.77 , proof here >

http://malaysiafinance.blogspot.com/2010/02/jcys-new-pricing.html


JCY looks likely to slash its IPO price to RM1.60 from an earlier indicative RM2.00. At RM1.60, its a good price level to get in. I still think its fair value is at RM1.80. Enough said.



My reply:


"We're living in a fast changing financial market. Sentiments can change just overnight without warning. If I want to invest long term in stock market, better choose blue chips and avoid all these small cap cyclical stocks. Recommendations from just a month ago might have changed several times already. If invest in these stocks, watch closely, act wisely. It's all about entry and exit points. It's a skill which we have to develop. I can't really judge Dali's recommendation based on his prediction like 10 months ago!!! (MY GOSH!! IT'S BLOODY 10 MONTHS AGO. I might not even consider recommendations like a month ago. They're just good for information sake.) Many things have changed since then. His style is based on momentum play backed by fundamentals, meaning it's fast changing. If you want investment horizon of like 1 year, go to unit trusts. Thus, if we lose money, we have ourselves to be blamed. That's my standpoint. We are responsible for our own money, decision, judgment. If we're not careful enough, blame ourselves. That's all. Thanks."


So, dear readers, exercise your own judgment. Read my entries with your critical eyes and analyze the stocks by yourselves. Don't follow my recommendations or others' blindly. I'm no Sotong and I'm not God. If you agree with my entries, it's a compliment for me. If not, I'll be more than glad that you could provide constructive comments. Thanks.


PS: Stop spamming people's blogs if you lose money or for whatever reason. Moolah's blog and a few others also kena.

Thursday, December 16, 2010

Free Piano Jazz Radio

Stumbled upon some cool radio channels. For those who favor piano jazz music, check out this site. They have really good stuff here.

Wednesday, December 8, 2010

"Why I Like Kumpulan Fima" by Dali: Malaysian research houses, please expand your horizon :p

Looks like the ballrolling has to start from the bloggers eh? There're still no research reports on Kumpulan Fima though probably everyone in the bloggersphere is recommending it (including Dali, Moolah and myself) and already investing in it!!!??? Maybe bloggers who are doing the hardwork of picking out these undervalued stocks should demand some payment eh..hehe..Ok, I'm just joking :p Some of the stocks which are not in the Bloomberg's analyst coverage list at all which have strong potential such as DRB Hicom, TDM, Kumpulan Fima, Cepatwawasan (though there's a write-up from CIMB with no recommendation).

Dali's article on Kumpulan Fima, click here.

PS: Another Forbes' Asia 200 Under A Billion award winner is Coastal Contracts which is trading at RIDICULOUSLY low PE of less than 5x!! Wakarimasen!!!

Tuesday, December 7, 2010

Siaran Tergendala: Will be away for a while

Dear readers,

I'll be posting quite rarely from now till maybe next Feb (Not that I post as often as other finance bloggers in the past...Sorry guys :p) as I will be busy with other matters. Nonetheless, I will be checking my chatbox to see if I can give any constructive responses to you all.

Thanks. Happy trading!
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