Berjaya TOTO is Attractive Now! and more...

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Berjaya TOTO is Attractive Now!

Some reasons:

Producing around RM 400 mil free cash flow (FCF) consistenly but its market cap is at RM 5.8 bil, indicating BJTOTO is selling at 14 times FCF only.

Attactive dividend policy which gives around 6% yield at current price of RM 4.28

Defensive business in inflationary environment.Sales tends to pick up during economic slowdown

Potential privatisation target at RM 4.90 per share (Very very likely) :)

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Malaysia Smelting Corp (MSC) to list in Singapore Stock Exchange

The news is out this afternoon that MSC is going to list in Singapore stock exchange after shareholders' approval.The stock flew to RM 4.50.But this post is not about MSC.It's about a company which also owns MSC,ICAPITAL.BIZ

ICAP is non speculative,does not pay dividend and it has very small daily volume for traders.Hence,it stayed undervalued since 2008 crisis because uncle and aunty weren't interested.Why ICAPITAL is attractive?

a) ICAP is one of the THIRTY (30) LARGEST SHAREHOLDERS in MSC now. ICAP bought MSC in April 2010 at around RM 3 per share.It owned about 1.9 mil shares and at current price of RM4.50,it's sitting on an unrealised gain of RM 2.8 mil today.Since ICAP will continue to hold MSC even after it lists in Singapore,the future potential gain is tremendous.

b) ICAP is still holding RM 100 mil in its vault and judging from its impressive record to double the NAV less than 5 years, ICAP's NAV can easily breach RM 3.00

c) Tan Teng Boo is "cooking something delicious behind the kitchen" to serve to ICAP's shareholders in order to justify the under priced share

d) Current share price offers almost 20% discount to its NAV.

ICAP is ripe for picking now



Buy Some Stocks Before Christmas Holiday!

Bursa Malaysia is undergoing some healthy correction during year end holidays due to fund managers going for vacation,school holidays for children so no time for stocks or whatever reasons.

It's during this period when value investors should hunt around looking for undervalued companies.They should allocate some cash to pick up some good stocks with good fundamental to ride the bull in Jan 2011.

Are you ready for bull run in January 2011?
You still have around 10 working days to pick up great companies at attractive price.Focus on companies with good cashflow,healthy debt ratio,cash rich companies,mid to low market cap.Some of the companies you should be looking at are mentioned in my previous posts.

2011 is a great year for Malaysia due to snap election, ETP, foreign fund inflow and various government initiatives to boost the Malaysian Economics.In short term,these news will lift the market confidence.In long term,we shall see....well,in long term,the success of all government initiatives will depend on the man in the mirror.You are the main determinant whether Malaysia will be able to leap from middle income trap to High Income Country.If you want to make Malaysia a better place,start looking at the man in the mirror.Let's work hard,work smart,save and invest now!

Are You Ready For Super Bull?

4Q2010 to 1Q2011 will be SUPERBULL for KLSE. Foreign investors will pump in huge amount of liquidity into stock market. Cheap money will always go to highest yielding asset. Comparing all the countries in Asia, Malaysia is on the radar now.Malaysia has a lot of undervalued good paying dividend companies with low PE.

Big cap companies have ran up a lot recently so the focus will shift to second liners.Make sure you pick/hold your portfolio to ride on the bull.Don't sell too soon..not until the stock is fully valued.There will be more corporate activities coming up in these few months.Take note of companies selling below their net current asset.They are ripe for pickings.

Take note of my previous recommendation because these companies have something brewing in them.If you could just put some $$$ in them,you'll be laughing all the way to the bank next year.

Why bother investing in Malaysian REITs?

Today, i read an article on The Star by Mr. Ooi Kok Hwa regarding REITs. Take a lot at the article here.

What makes me furious is that Mr. Ooi who is an investment adviser and managing partner of MRR Consulting,has misled the public by not discussing the real issues in Malaysian REITs(MREIT).I guess a consultant is still a CONsultant.

MREIT is full of crap properties.If you look at their portfolio,most of these properties are actually dumped by developers/owners since they cannot sell their buildings in the market to professional institutional investors.For example,SUNWAY REIT (which i wrote earlier) is one of them.Creating a REIT is the best way for developers/owners to either 'sell their building at higher valuation' or 'unload their poor quality properties to the market'.

Most of analysts would reasoned that the owners of the buildings which are pumped into REIT want to raise fund to capitalize other opportunities.But these crooks can actually refinance these buildings.So,why go through the hardship to create a MREIT?Because the bankers refuse to refinance these properties at crazy valuation.

So,these crooks will repackage their buildings by bringing in tenants through creative leasing contract to boost the rental income.Property manager will help to make up their properties so that the net operating income is marketable.There are a lot of ways to tweak the buildings to improve the performance for a few years. 

Some developers actually treat their own REIT as a dumping site.If they want to sell their buildings at higher valuation,they can pass it to their own REIT.Who cares if the total office space in KL has reached its oversupply condition.Just build them and sell to their own REIT!It's a fool proof business model for developers.

MREIT is very far away to be compared to the actual REITs in US,UK and Australia.In these countries,REITs can directly involve in property development and become a developer.They can leverage up to boost great return for their investors.

Which type of REIT is better for investment?
1) A REIT which buys land,construct the building at cost,sell some % and keep some for recurring income and manage & control the building management.OR
2) Just like MREIT,which have to buy properties at market value from some crooks and manage it for recurring income?

Generally,REIT is very liquid but that only applies to overseas REITs.Whoever said MREIT is liquid must be copying his work from some foreign article without using his brain.A quick check with the MREIT's daily volume will show you the reality.MREIT is so illiquid and you may have to sell at loss, below their NAV to get back your $$$.Compare to MREIT,you may find more liquidity investing in an actual condominium next door nowadays. 

My 2 cents-->If I want recurring dividend,i would rather buy BJTOTO.Low cost and simple business model which will still makes $$$ when you let an idiot run the company.

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