Q3 PBT is better than Q2 actually, but tax expense is extremely high (mainly arising from overseas subsidiaries) hence drag down the net profits. Cranes segment performance dip but total outstanding order books on hand still have RM511mil.
I was hoping for the share to drop even more, but you can tell that no one wants to let go of a solid company like this, hence price hovers around RM2.15 to RM2.20 after the dividend collection, can't go any lower.
Well, long term I got no worries at all, even during this pandemic Favco should be effected but it is not. That's just how strong is it.
No debt. Pile of cash that can buy any other business anytime. Strong outstanding order book Even analysts are putting a TP of RM3.0 for 3 quarters straight. Dividend yield of 7%
Favco is a safe play for those who wants a stable investment. Recommend to accumulate at current pricing. Again, any price below RM2.50 is a good price to collect.
This is a good recovery play considering O&G sectors and crude prices starting to recover loh...!!
Posted by Johnmajor > Dec 6, 2020 11:38 AM | Report Abuse
Favco is a safe play for those who wants a stable investment. Recommend to accumulate at current pricing. Again, any price below RM2.50 is a good price to collect.
I'm afraid there is something bad going on in Favco. Muhibbah Engineering (its parent company) seems to be siphoning cash from Favco as it is in heavy debt, if this is true, then it is really bad news.
This is what I quoted from an analyst.
"There is something worth scrutinisation for what going on with its 60% subsidiary, Favelle Favco (FF), which has been self-sufficient for years, even in this year pandemic, and in 2018 it was so cash-rich to acquire a business for 40m. But in 3Q, it suddenly borrowed 28m in loan. Based on FF past years’ cash flow, the last time FF has net borrowing (proceeds) was in 2009. Throughout 10 years, it has been on net repayment, suggesting it didnt borrow more than it repaid in any given year for 10 years until Q3 2020.
Well, FF investors ought to check if any substantial related party purchase from its holding company in the coming annual report. Perhaps some repackaged junk/shell to sell to FF for channelling money into holding company, Muhibbah. FF should expect to face legal proceeding from FF’s minority shareholder if that happens."
Taking into considerations -
1) Parent company Muhibbah siphoning money. 2) The after effect of Pandemic to developments. 3) Dividend payout that is still far away
I suggest we wait for Q4 result to further clarify before purchasing.
@Keyman188.agree with u bro..i also like good fundamental stocks & diversify portfolio.im a bit similiar to u.only my problem i dont have time to always monitor due to my work.i just queue if want to buy. i also like to buy good fundamental stock when it suddenly fall a few %.today managed to grab some gtronic.:):)
MIDF upgrades O&G sector to 'positive' on higher oil prices
(theedgemarkets.com / March 11, 2021 12:52 pm +08)
KUALA LUMPUR (March 11): MIDF Research has upgraded the oil and gas sector to "positive" as it sees the upstream and downstream sub-segments will benefit from the recent oil price rally.
Its analyst Noor Athila Mohd Razali said in a note today that the higher oil prices would benefit the sub-segments in terms of potential new contract awards, rising product prices and spread for downstream industry players.
“Despite the absence of revision in exploration and production (E&P) capital expenditure spending from the oil majors, we opine that the recovery narrative for the sector remains on track given that a more selected spending approach will result in a more sustained recovery and significant uptick in activities within the oil and gas sector is expected to take place in the second half of 2021.
In terms of dividend play, she recommended Favelle Favco Bhd (buy, TP: RM3) and Petronas Gas Bhd (buy, TP:RM17.90) as these companies have been registering not only stable recurring income but also consistent dividend payout for the past three years.
1. "175mil order intake ytd compared to 170mil order intake for last full year period" 2. "Permanent cost elimination, when revenue going back to pre-covid level, profitability will increase" 3. "Supplier increase price to us, we also increase price to the customers. The whole industry also doing the same" 4. "Hopefully will have more pipelines realised in the coming next few weeks"
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Johnmajor
260 posts
Posted by Johnmajor > 2020-11-12 12:24 | Report Abuse
any price below RM2.50 is good price to buy