Watch the video with Andrew Stotz or read Watching the Street: Malaysia below.
Consensus Recommendations: Malaysia
If we start with consensus recommendations, we can see that the bottom-up country relative consensus recommendations (the chart on the right below) show us that Malaysia has not been a “buy” in Asia for the past five years.
Analysts are now negative again after the Ringgit has continued to depreciate.
Among companies with the highest recommendations, AirAsia is a low-cost airline with about 200 destinations spanning 24 countries mainly in Asia.
Among those with the most negative recommendations, Felda Global Ventures focuses on soft commodities such as palm oil and sugar, and its share price has fallen about 25% in the past three months.
Consensus Earnings Estimates: Malaysia
Analysts have been conservative with EPS growth estimates, but earnings have fallen each year from 2013 to 2015. 2016 earnings-per-share, however, are expected to grow by 11%.
Among stocks with the highest consensus EPS growth estimates, MY EG Services develops electronic government services in Malaysia and private enterprise solutions. The stock has gained more than 10x over the past 4 years and 10% YTD.
WCT Holdings, S P Setia, Sime Darby and Genting are all diversified investment holding companies and are expected to see earnings fall in 2016.
Consensus Target Prices: Malaysia
Analysts now expect 6% upside over the next 12 months vs 3% in August. However, Bursa Malaysia has fallen since then and is down 3% YTD.
AirAsia and MY EG Services are also found among companies with the highest consensus target price expected returns and share prices have gained 90% and 10% YTD, respectively.
Hartalega Holdings produces latex and nitrile gloves, and analysts expect further downside even though the share price is already down 20% YTD.
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