The market saw a relief rally post the conclusion of GE13 with the key index hitting new all-time high. In the month of May, the FBMKLCI index posted a total return of 3.6% MoM or 7.0% for the YTD. The performance of our On Our Radar tracker outperformed the benchmark index with a steering 13.9% MoM gain and 18.3% YTD gain, thanks largely to PESTECH, which rallied 30.7% MoM and 126.3% YTD. May was another aggressive month where we introduced five new Trading Buy calls with two new Not Rated stocks. We reintroduced PWROOT as we saw its value reemerging after we had booked in a handsome gain of 68% in March. PESTECH has been the best performer so far with a 124% gain since our inception report on 26 Feb after it attracted institutional funds to take up a stake in the company. Looking forward, the overall market may consolidate after the good run-up before heading higher later.   

Added five new Trading Buys in May.  We had another aggressive month in May as we introduced six new stocks in eight of the On Our Radar (OR) reports that we released during the month. We have five new Trading Buy calls on PWROOT, GADANG, MYEG, LBS and YEE LEE. To recap, we had a Trading Sell rating on PWROOT with a realised profit of 67.8% at RM1.48 on 4 Mar when the share price was ahead of its fair value. On 9 May, we recommended PWROOT again with a Trading Buy call on its “dividend reinvestment plan” program, which offers more upside potential. In addition, we also featured two new stocks with Not Rated ratings i.e. DELEUM and FIBON, and a Not Rated update on DAIBOCI after its 1Q13 results briefing. So far, we have no Trading Sell call in the month of May.

Average return of 14% in one month. After adding five new Trading Buys, we now have a total of 17 Trading Buys in our OR tracker portfolio list with an average total monthly return of 13.9% in May, which beat the FBMKLCI (+3.6%) by 103bpt. This was mainly driven by TAMBUN, where its share price rallied 43.3% MoM in May after the stock lost 4.1% of its value in April. PESTECH registered yet another strong gain of 30.7% MoM after it share price had risen 32.4% MoM in April while TGUAN also had a good run with a 23.7% MoM gain after a slow seven months since our first report on it in Oct last year. MYEG is the only Trading Buy stock with a negative monthly return of 2.2% in May after our first report on 21 May. On a YTD basis (as at 31 May-13), our OR tracker portfolio, which comprises of stocks that we still have Trading Buy ratings on, recorded an impressive total return of 18.3% compared to the 6.5% that of the FBMKLCI.

PESTECH is still the best performer.  Our OR tracker portfolio has posted an average total return of 20.7% since its inception, which is higher than that of the 11.0% total return of the FBMKLCI in the same period. PESTECH remained as the top best performer (in terms of total return) in our OR tracker portfolio for stocks that we still have Trading Buy ratings on. The total return for PESTECH has been at 124.0% since our first report dated 26 February. Although its share price of RM2.61 has already surpassed our fair value of RM1.96, we remain positive on the stock as our back-on-the-envelope calculations show that the fair value could be as high as RM3.30 if we include in its potential USD24m Laos contract. The other best performers were FABER (+41.9%) and TAMBUN (+35.4%) while MYEG (-5.1%) and COCOLND (-0.1%) were the only two stocks with negative returns in our tracker list. On the other hand, PWROOT (+67.8%) and TWSCORP (+36.5%) remained the top performers in our realised OR portfolio tracker list while BONIA topped the worst performer list after we sold it on 19 Mar-13 with a total realised loss of 17.1%.

Source: Kenanga