CIMB Research Finds Bargains Galore on Bursa

(Source: New Straits Times)CIMB Research has highlighted Tan Chong Motor Holdings, LCL Corp and Wellcall Holdings as among the best bargains that investors can pick up on the stock market currently.

All three stocks offer robust earnings growth at very low price- to-earnings (PE) ratio, and two of them - Tan Chong and Wellcall - also boast of defensive qualities and generous dividend yields of 9- 10 per cent.

"For investors who have the patience to ride out the next 12 months or longer, these companies are good bets, potentially doubling their share price once market conditions stabilise," CIMB head of research Terrence Wong said in a report last week.

He noted that the time horizon for performance could be faster should there be privatisation or merger and acquisition moves.

Wellcall is a rubber-hose manufacturer, while Tan Chong assembles and distributes vehicles and LCL is an interior fit-out specialist.

Wong, in his report, said there was a bargains galore to be had in Malaysia.

"We are amazed at just how cheap some stocks have become after falling by as much as 75 per cent this year."

Some companies are at levels where they could be taken private or even be the target of takeovers, he said.

Neverthesless, despite the abundance of cheap stocks, CIMB is maintaining its "neutral" rating on Malaysia because of niggling political uncertainties and deteriorating corporate fundamentals.

Its year-end target for the Kuala Lumpur Composite Index remains at 1,140 points for this year and 1,240 points for next year.

Wong advised investors to stay defensive and overweight on high- yielding stocks.

Those with a higher risk appetite, however, may want to take a look at "bombed-out" stocks that could be privatisation or M&A candidates, he added.

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