In order to be a successful investor or trader in Malaysia, one must be quick witted and act rapidly in identifying turnaround trends or the next hot sector in the market. As healthcare & technology sector might experience overstretch in terms of share price, the next sector that INVESTMENT FUNDS would look for must be in deep value.

The deepest value that could be found are usually the most depressed sector. Take GameStop as an example; a once used-to-be dying retail gaming franchise that crushed the shorties, what sector in Malaysia could perform the same?

After studying across all sectors in Malaysia, there is only one sector that is laggard behind the recovery play in Malaysia – Construction sector. The beginning of MCO signalled the complete shut down of economical activities in Malaysia, which caused huge damage in the whole construction sector. So had construction sector recovered?

Far from it, the construction sector is still down 11% since MCO was in place!

Think of this, where the funds would go after they took profit from the technology sector? Remember, stock market would always be a playing field for “expectations”. Based on the 70 times PER for semiconductor stocks in Malaysia, the greed index is indeed ticking, and the fund managers are fully aware of it.

So now that we know the construction sector would be next sector that is going to bounce so fast, so quick and some of you might miss it. Which company should we invest into? In my past articles, I always mention “quality of profits”. With the implementation of MCO, no doubt there are critical damages to the profitability of construction companies. Hence there emerges a divergence of profit (or loss) against the share price. If the share price did not drop as bad as the market capitalization of the company, it would result in a high PER, or even worse – negative PER!

So what we should do is simple and easy, we need to look for single digit PER construction sector. Which means we look for a higher profit / price divergence which favors the investor more. But is it even possible to identify single digit PER construction companies?

The answer is yes. And I will share with you about this hidden gem before it skyrockets. And this great company would be AGESON BERHAD.

It’s single PER of 3 signifies that for every one dollar the company earns, you are only paying 3 dollar to acquire the stakes of the company – plus any net cash the company had on hand! While all construction companies are struggling to make profit even in accounting terms, AGES had delivered amazing results even in the MCO period. And the reason for it is the prudent costs management and effective capital allocation by their management team.

And if you are new to stock investment, worry no more as I had done the analysis for you. You may refer for the graph below for a better understanding on the price movement on this company.

From the chart alone, we can tell that the company’s share price has been stabilizing in the range of 12 – 14 cents for the past few months. Just to add more to the story, the company 4 key EMA are consolidating against each other closely, which is a signal for end of previous trend and would soon embark in a new trend in no time.

Whether it is from fundamental or technical perspective, AGES is a definitely BUY for me. The reason I’m sharing this is because I would need more investors to be more aware of the company so that the premium will get higher in the future.

Cheers.