Mudajaya Group Bhd looks the most attractive among 26 stocks in Malaysia's industrials sector tracked by at least three analysts, data from Thomson Reuters StarMine shows.
The company has a Relative Valuation (RV) model score of 96, the highest in the sector. The higher the score, the cheaper the stock. It also has high Value-Momentum (Val-Mo) and Earnings Quality (EQ) scores of 92 and 99 respectively. A near-perfect Smartholdings (SH) score of 99 suggests a potential increase in institutional ownership.
Mudajaya's net margin and free cash flow (FCF) for 2011 exceed industry average by 12.3 percent and 8.8 percent respectively. Its FCF for the six months ending June 2012, at 229 million ringgit was an increase of over 20 times from a year earlier. Its net income stayed stable at 60 million ringgit during the same period.
Of the four analysts tracking the stock, three give it a "strong buy" or "buy" rating while one has a "hold".
The stock currently trades at 23 percent of its intrinsic value of 11.79 ringgit. It is up over 22 percent so far this year, while the broader index has gained 8.15 percent for the same period, as of Thursday's close.
On the other end of the spectrum, Malaysian Resources Corporation is the most expensive stock in the sector with an RV score of 8.
The builder and developer reported a 57 percent increase in second-quarter revenue at 559 million ringgit from a year ago while net income remained flat at 60 million ringgit.
StarMine's Relative Valuation model combines six different ratios that measure a company's valuation and then ranks it compared with all other stocks in the same region.
StarMine's Val-Mo model provides a 1-100 percentile ranking of stocks and rates companies based on a combination of value and momentum metrics.
The Earnings Quality model is a percentile (1-100) ranking of stocks based on sustainability of earnings, with 100 representing the highest rank.
The StarMine SmartHoldings model is a global stock selection model that ranks stocks based on the expected future increase, or decrease, in institutional ownership.
(Reporting By Reshma Apte; Editing by Gopakumar Warrier)
Keywords: MIDCAP MUDAJAYA/