Time for picking up stocks with potential at lower prices, say analysts

[rooster59]

Time for picking up stocks with potential at lower prices, say analysts

By The Nation

 

 

Declining share prices amid sell-off in the Stock Exchange of Thailand, triggered by the Covid-19 outbreak, offers a good opportunity for investors to pick up stocks with rise potential at cheaper prices, say market analysts.

 

 

Kuntra Ladavalya Na Ayudhya, executive director of Finansia Syrus Securities, said at the seminar hosted by Krungthepturakij newspaper on Thursday (February 27) that share sell-off by investors due to mounting concerns of the Covid-19 outbreak , had led to the SET index falling 13 to 14 per cent from early this year to about 1,366 on February 26 - its lowest level in five years ago. Investors should start buying stocks with potential to rise, he suggested. The government is expected to launch a new economic stimulus package after the censure debate.

 

“If we look at 10-year statistic, whenever the index fell more than 8 per cent in 10 days, it made a v-shape rebound," he said.  Kuntra advises buy of SISB share at Bt 12 per share. The SISB international school operator is expected to make a profit of B284 million this year, up from 220 million last year due to rising numbers of students and it is less impacted by the coronavirus epidemic. The expansion of school facility in Thonburi could accommodate another 4,000 students. He also suggested buy of RBF at Bt 5.50 a share which largely depends on domestic sales of food additives, and CHG at Bt3 a share as it will benefit from rising number of patients with Thais making up the majority.

 

MTC price at Bt65 a share is also recommended as it will benefit from lower financial cost after the central bank cut its policy rate while EA, a clean energy operator, is also a good buy at Bt 60 a share.

 

Padermpob Songkroh, authorised director at Yuanta Securities (Thailand), suggested share of BAM at a fair price of Bt30 as the asset management firm may buy assets at lower prices during the coronavirus outbreak. When the coronavirus outbreak is contained, investors should look at TOP with fair price at Bt62 and KCE at Bt26. STEC will benefit from government infrastructure projects and budget disbursement which is expected to start in April after several months of delay. TASCO will benefit from government projects, decreasing oil prices and its fair price should be Bt27, he added.

 

Kavee Chukitkasem, deputy managing director at Kasikorn Securities said he had not recommended any stocks to investors in the past two years, due to weak economic fundamentals,lower investment, weak consumption, ageing society and low competitiveness of Thai industries. But when the index is down 20 per cent from the previous high of 1,850, prices are cheap and present a good chance to buy. Investment is expected to yield positive returns in the next three years. Investors should look at firms with strong fundamentals. He suggested BDMS at Bt28 a share. BDMS' acquisition of BH hospital will increase the number its internal patients, given BH's client base. Next is MINT,a hotel chain at Bt45 a share as it is expected to rebound in the long term. He also likes AOT, the state airports operator, at a fair price of Bt 75 a share, due to expected growth in tourist arrivals . CPALL at Bt80/share is an attractive buy due to its network of convenient stores and large number of warehouses and well-managed logistics. The company has a large cash flow, and if it could win the bid for Tesco, its cash flow will rise but in short run, it will be under pressure from borrowing cost, he said. Next is ADVANCE with fair price at Bt226, because the mobile phone operator needs not to invest much in 5G network, it will have more cash for dividend payment , he added.

 

Pichai Lertsupongkit, senior vice president at Thanachart Securities, said short sell and forced sell had sent the market down sharply . He predicted that the Bank of Thailand will cut benchmark rate again on March 25 when the Monetary Policy Committee convenes and the government will implement more economic stimulus package.

 

If the Covid-19 outbreak persists, investors should look at SEAFCO with fair price at Bt8 a piece. It will benefit from government project, offer high dividend payment and low P/E at 10 times. He recommended COM7 at Bt32 a share as it will benefit from 5G projects and it has not yet impacted by the coronavirus. He also suggested PTTEP with fair price at Bt 152 a share, it will benefits from rising oil prices and its share had dropped sharply. AOT at Bt80 will benefit from tourism growth and MINT at Bt42 a share as lower interest rate will cut its financial cost, he added.

 

Source: https://www.nationthailand.com/business/30382995

 

-- © Copyright The Nation Thailand 2020-02-29

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[Bob12345]

The job of an analyst is generate fee income for his employer. So they will always advice you to buy, sell, sell, buy, buy, buy, sell.... 

[hugh2121]

Do they think the market has bottomed? If so, why do they think that? My advisers think that there will possibly another 10% fall globally.

 

[Hank Gunn]

Before the Covid-19 thing spooked the markets, stocks were already at all time highs, following a longer than usual (10 year) bull market. As such, most equities were relatively overpriced and at the current discount, are still (in my humble opinion) relatively overpriced.

 

I wouldn't sell (and won't be selling) anything right now, but I'd try to have some cash on hand to buy in, when the markets make a major drop from their current high levels. Remember, China's economy was already slowing down before this pandemic scare and most people will say that it will slow even further (even discounting the Covid-19 factor). I personally think the markets are due for a larger correction in the next 1-3 years.

 

Of course YMMV and everyone's situation is unique, but if you think buying now is buying a major dip, I think you should wait. Just my 2 cents.

[nobodysfriend]

Time to buy shares is when they have bottomed out and a clear UPWARD Trend is recognizable . If you buy now , it is way too early , as the consequences of what is happening now are not known yet .

Edited February 29, 2020 by nobodysfriend

[chilli42]

Agree if the virus gets no worse th n good time to buy.  If it does Get worse (and it will) then there is a downside is 10% or more.  Fools rush in and all that 

[chilli42]

2 hours ago, Hank Gunn said:

Before the Covid-19 thing spooked the markets, stocks were already at all time highs, following a longer than usual (10 year) bull market. As such, most equities were relatively overpriced and at the current discount, are still (in my humble opinion) relatively overpriced.

 

I wouldn't sell (and won't be selling) anything right now, but I'd try to have some cash on hand to buy in, when the markets make a major drop from their current high levels. Remember, China's economy was already slowing down before this pandemic scare and most people will say that it will slow even further (even discounting the Covid-19 factor). I personally think the markets are due for a larger correction in the next 1-3 years.

 

Of course YMMV and everyone's situation is unique, but if you think buying now is buying a major dip, I think you should wait. Just my 2 cents.

True.  The problem is there is nowhere to hide.  ETF’s with US long bonds are overbought, gold is on its way down, utilities no etc.  Sure cash is now king but the value of cash is that it is a safe not not productive use of an asset.  Maybe a good time to buy hard assets (like real estate) coming up.

[wolf81]

3 hours ago, hugh2121 said:

Do they think the market has bottomed? If so, why do they think that? My advisers think that there will possibly another 10% fall globally.

 

My estimate is that markets will be down for a big while and bottom isn't reached.

 

But I think I'll start spending a bit more on my ETFs in the coming months and make use of Dollar-Cost Averaging.

 

At some point the stocks are bound to go up again, but no one can be sure when that will be. 

 

Best time to buy is generally when blood is running in the streets.

[bkk6060]

Everyone has their tolerance and strategy.

I am buying some now.  

There was lots of positive things going on.

Trade deal with China, Taliban deal.  I do not believe it was overpriced at all.

Waiting for an upward trend is like timing the market.

When it turns the DOW could easily go up 2,000 points + in one day.

Watch and see.

Sit on the sidelines and you may miss those opportunities.

But it is a marathon anyway not a sprint.

And I still predict Dow 40,000 + after Trumps next 4 years.

 

Edited February 29, 2020 by bkk6060

[scubascuba3]

Investing is like a game of snakes and ladders, a couple of weeks ago things were at record highs

[1FinickyOne]

4 hours ago, hugh2121 said:

Do they think the market has bottomed? If so, why do they think that? My advisers think that there will possibly another 10% fall globally.

 

or another 30-40%... the effect of the virus on business is easily seen in CM as people are not out and around too much... oil prices are falling, and a contraction will mean falling prices for commodities and businesses... 

[kblaze]

On 2/28/2020 at 11:38 PM, Bob12345 said:

The job of an analyst is generate fee income for his employer. So they will always advice you to buy, sell, sell, buy, buy, buy, sell.... 

Yes, their job is to give recommendations based on fundamental analysis. That is what investors want from them. Don't see why this is a bad thing

[ThaiBrian]

Uh, No.

[1FinickyOne]

On 2/29/2020 at 7:03 PM, bkk6060 said:

When it turns the DOW could easily go up 2,000 points + in one day.

Watch and see.

when was the last time that happened? early futures show another 500 pt drop...

[Dumbastheycome]

A lot of market comment says many are holding. The biggest issue is a credit crunch coming up on many companies that over reached due to the previous big upswing in Stock values. With the prior economic slow down now being exacerbated  by the  Covid-19 impact a big crash is  possible. The Stock Markets are basically driven by short term expectations of gains in value rather than the dividends that value is supposedly attributed to.

"Potential" ? Manufacturing and service industries are now being impacted  by disruptions in supply.

Operational margins are being squeezed rapidly.

 

[Bob12345]

4 hours ago, kblaze said:

Yes, their job is to give recommendations based on fundamental analysis. That is what investors want from them. Don't see why this is a bad thing

No, their job is to generate income for their employer.

 

And I am not saying its a bad thing, as long as you know you are being played by banks to incur transaction fees to make them more profit. The only reason they hope you get a positive return is so you can do more trading.

[Bob12345]

On 2/29/2020 at 3:18 PM, nobodysfriend said:

Time to buy shares is when they have bottomed out and a clear UPWARD Trend is recognizable . If you buy now , it is way too early , as the consequences of what is happening now are not known yet .

And when things are known, there are no opportunities anymore.

 

The best time to buy shares is just before they go up, and sell them before they go down.

I am pretty sure that will give the best results.