Stock Pick 2016 - NOBY(http://klse.i3investor.com/servlets/cube/houseofordos.jsp)

TOC - http://klse.i3investor.com/blogs/stock_pick_2016/88953.jsp

TanKW, these are my 2016 stock picks with some reasoning

KESM 10% (Their major capex cycle is complete. Expect their margins and free cashflows to start growing with their renewed focus into automotive chips testing which should see bright prospects with the thrust towards self-drive cars)

MUDAJYA 10% (Contrarian buy and follow the superinvestors. Hoping for Indian IPP venture to start turning around earnings. Prem Watsa from Fairfax Capital is also vested last year)

HEXZA 10% (Safe and boring stock with strong balance sheet and good dividend yield. Myanmar IPP earnings to start contribute in 2016 and to also see margin improvement due to disposal of loss making business)

GADANG 10% (Magic Formula stock. Good earnings visibility and undervalued)

ADVENTA 10% (Strong moat healthcare related company. Lucenxia will start contributing in Jan-2016. Hope to see earnings move to a new level this year)

SMI 10% (Net net stock which may turn around this year due to sales recognition from its Pinnacle Kelana Jaya project. Already turned ~9 mil of FCF for the first 9 months of FY2015 and should improve further as more sales get recognized)

LUXCHEM 10% (In a sweet spot with it benefiting from both low crude and weak RM. Growth in bottom line will come from its manufacturing division which fetches higher margins)

HIL 10% (A laggard among the plastic injection moulding peers which also set to benefit from lower crude oil prices. It is still trading at 3.7x EV/EBIT. Net cash of RM0.53 per share vs share price of RM 0.84. While the group is also involved in property development, its focus towards affordable housing makes it less vulnerable to the property down-cycle. Its previous 2 projects were very well received with take up rate >90%)

MAA 5% (PN17 stock with a chance of capital repayment this year? Sale of insurance arm to Zurich insurance in progress. The TAKAFUL arm should fetch a high price due to the limited license and growth potential in Malaysia. Syarikat TAKAFUL is already trading 4x book value, if MAA Takaful was sold at even 2x book value, the stake is already worth RM0.59. MAA as a whole should already be worth RM 1.7 assuming its remaining assets (mostly cash) is valued at 1x book)

TURBO 5% (Magic formula stock. Produces OnG process equipment. Revenue and profit is declining but price may have already reflected that. Dividend of 5 sen and strong cash position limits the downside)

APB 5% (Distributor of OnG process equipment for OnG downstream. Recent 2 quarter results were encouraging. Expect them to benefit from RAPID. Strong cash position and dividend yield)

NOTION 5% (Close to all time low. Might be a late bloomer for 2016 as its losses was mostly caused by hedging contracts. The contracts are set to fully expire by Sept-2016. The group is also starting to divest some of its PPE and become more asset light. The debt has been significantly reduced and the group is now net cash)



Posted by NOBY at Jan 4, 2016 01:05 PM