Tuesday, January 26, 2010

Comments on Jupiter 2010 stock picks

Faber Group was one of the worst run businesses of all time. They wanted to do 'everything' and ended up achieved almost 'nothing'. Its one of those stories who involved in property development and didn't quite make it. The whole restructuring exercise took more than 5 years before they finally turned it around. What is interesting however is its consistent up trend in their EPS earning, despite that it started from a negative (84.2) in 1998. Looking forward, if the person who is managing finance in Faber continues to stay in power, this is worth looking into more. It could become one of the best long term keeper. Key to success is if they can repeat 2005-2006 growth now. This can be determined by reading their latest annual report. Challenges are varies of their continuous law suits.

SAPCRES, Oil and Gas, looks pretty good now. It seems like anything under RM 2.49 is a good buy ( and keep for the next 10 years). The problem is technically it is at its all time high now and corrections are bound to occur. Another problem is it has been relying too much on the oil market and fluctuated too much in the past. Internally they should really improve their hedging strategies to smoothen out their track records.

Paramount is properly most well known when they bought Kota Kemuning with cash 7 years ago. Perhaps they should buy another big piece of land now to stimulate next 3 years of growth !? Basically this is also a very good keeper, it wouldn't go too low anyhow so it has a strong safety net but technical correction pressure is quite high at the moment. Its employee share option scheme also make it a less attractive stocks. Potentially a keeper but lack of stimulants now.

While some think Zhulian is a great MLM company, I personally think they should adopt newer concepts etc. They are still employing 20th century MLM aka. repeat Amway's story but landed on a wrong product to start with. But even with the wrong product, they are in the right market and hence still manage to make it a success in their own scales. My target buy price for Zhulian is only RM 0.66

The rest of the Kurnia, KurAsia, Atrium, TSM and WellCall do not meet volume requirment. So whatever reasons Jupiter recommends them are not based on proven strength analysis - which in turn I consider as speculations. Among all, TSM may be the one what is most speculatable.

My actions ?

I have chosen KNM over SAPCRES in the past before. There is no urgency to change yet although its tempting. Faber and Paramount on the other hands were NOT in my radar before. Can Paramount regains its debut ? Is Faber really undervalued and have their internal issues really addressed ? I may check out Faber's management team first ...