CLSA Top 5 Picks during volatile times (16 Aug 2011)

After an unexpected AAA rating downgrades and an expected correction, KLCI is coming down from its peak of 1,597 points in early July. CLSA come out with a timely report highlighting 5 stocks which investors should focus on even during volatile times. These stocks have resilient earnings, clear earnings visibility and are supported with dividend yields.




CLSA: YTD major indices performances as at 08 Aug 2011.

Which are the counters?

Axiata - Turning into a cash cow
  • Axiata's earnings will remain resilient during downturn as EBITDA is dominated by cellcos in Malaysia and Indonesia where price competition is muted these days.

  • From a highly geared company in 2008, Axiata is now turning into a cash cow with forecast yield rising to 10% in FY13. CLSA is expecting dividend yield of 3.6% for FY11, translating into total shareholders return of 10%.



Gamuda - Risk discounted
  • The 22% share price fall from 52-week high has discounted its Vietnam investment risk. US$600m market cap loss is more than its US$350-400m investment to date.

  • FY12 earnings are underpinned by high-margin construction orderbook worth RM2.7bn, unbilled property sales of RM1bn and recurrent infrastructure earnings.

  • MRT project news flow catalyst. Potential 26% upside to RM4.20 target.



Genting Malaysia - Growth, value and net cash
  • Its investment thesis remains geared towards growth as the UK casinos rebounds off a low base and the New York facility begins maiden contributions.

  • Gaming revenue, particularly in Malaysia, is uncorrelated with economic health. Balance sheet remains robust and it is among the most attractively valued gaming stocks globally.



Maybank - Resilient dividend yield
  • Regional expansion strategy through Kim Eng acquisition is earnings accredited.

  • Rising productivity and cross-selling activities will improve ROE and regaining domestic market share in profitable loan segments and investment bank deals.

  • High net yield of over 6% in FY12, supported by dividend reinvestment plan.



TM - Potential for special dividend
  • TM is recording strong growth for HSBB and this product could turn EBITDA positive earlier than expected.

  • Management undertakes active capital management and we are expecting special dividend of 3.3% from recent sale of Axiata shares.


Source: CLSA article dated 09 Aug 2011

Comments

Post a Comment

Popular posts from this blog

"You Can Keep Your Existing Health Insurance"

I wondered about this statement at the time Obama made it.  Clearly, by changing all the rules of health care insurance and mandating conformity, it was unlikely that the vast majority of Americans would not find themselves forced by 'The Affordable Care Act' to have to deal with a completely different health insurance plan and completely different set of health care providers. I now understand what Obama meant.   He was speaking to his immediate family and (politician) friends.  They are exempt from the "Affordable Care Act."  Clearly what he meant to say was: "if you are exempt from Obamacare, like me and my family, you can keep your existing health insurance."  He never meant to mislead.
Read more

Things We Now Know

The poor are losing ground in the new Obama world.  The facts are showing up even in the halls of collectivist extremes like the New York Times.  The rich are getting richer and poor are being locked in place.  Big government is throttling the economy and the hopes and dreams of lower and middle class Americans. Today's Wall Street Journal's article by Simon Constable lays out some of the simple and obvious facts of the Obama era: "The richest 20% of households account for 38% of spending, according to government data for 2011, the latest available.  Compare that with 2003 when the top earners spent 26% of the total."  The article goes on to say..."it could get even worse."  It will. Who really benefits when the regulators strangle the banks?  Do banks really need to get much more conservative in their lending practices?  Why does the government know best?  How far can you stretch the FDIC guarantees before American banking is simply a subsidiary of the US g
Read more

Why Gold and Silver? Why Online Store?

Image
Are you first time gold and silver buyers? Why don't you invest in these popular metals? If you did so, you have had a wonderful investing experience after 2008 global financial crisis. But, do you really understand these metals? Were they really precious (especially now)? Traditionally, gold and silver were one form of exchange. Because of the invention of fiat money, they were being turned into some short of "back-up" currency , in case our fiat money system go burst. It's natural when things go wrong, gold and silver tends to appreciate in value. In other words, people hold precious metals to preserve the value of their assets. 3 Reasons Why Gold and Silver... Still hot in demand , especially by emerging affluent Chinese. Traditionally, Chinese loves gold. They bought it for events such as new born baby, new year, wedding and even funeral ceremony. Strengthening USD ??? Yes. It's a correct reason also. Why? Because of news that US going to stop QE3, USD is str
Read more