FLOWS;
BUYS: AFG, Armada, TNB
SELLS: UEMLand, Genting, MAS
Technical Stock Alert;
TopGlove (RM4.80) - Rich valuation no longer warranted as the company continues to face headwinds in terms of margin compression as raw material prices remain persistently high and industry excess supply. Recent sell down from RM5.32 could continue to see further price erosion to around RM4.40 as current levels of RM4.80 only represent a weak support.
Puncak (RM1.57) - Price has fallen 27% from its recent high of RM1.89 after denying involvement in bidding for marginal oilfields. Despite this setback, we think there could still be further development in this space as the company completed the acquisition of two O&G related companies, Global Offshore Msia and KGL Ltd. We expect support around the RM1.60 awaiting future newsflows. Buy on weakness
Stock of the Day;
Digistar (RM0.55)
- Specialist in broadcast services/telecommunications infrastructure and IPTV
- Main beneficiary from intiative to migrate all air to free TV and pay TV from analog to digital by 2015.
- Has fulfilled requirements for main board listing and is in the process of initiating the transfer
- Price has retraced from a recent high of RM0.635 and currently consolidating around the RM0.55 levels.
- Buy, undemanding valuation of 5.7x PE based on historical earnings.
