PRESTAR – THE UNDERVALUE LAGGARD CONSTRUCTION MATERIAL STOCK

With the Contraction in China, the Overvaluation of Export Stocks & The Overstretched Consumers  of Malaysia Impacted by 6% GST & High Imported inflation due to weak ringgit there are really few stocks left for the picking in Bursa.

There remains a Class of Underperforming Stocks that might go against the trend – “THE CONSTRUCTION  MATERIAL STOCKS LIKE KPSCB, KIMLUN, CEPCO & PRESTAR”. As KPSCB, KIMLUN & CEPCO Have Already Run Up 20% to 30% In Prices Our Focus Now Turn To  PRESTAR.

 

PRESTAR Or PRE-STAR

“PRE” As in “PREVIOUS” Or “Before”

Or In Other Words “Before IT TURNS INTO A STAR”

SO NOW IS THE TIME TO BUY PRESTAR “BEFORE IT TURNS INTO A STAR PERFORMING STOCK”

 

PRESTAR – THE RISING STAR AMONG CONSTRUCTION MATERIAL STOCKS!

ITS SALIENT FACTORS:

1)  At 50 cents with NTA at Rm1.23 PRESTAR IS SELLING AT A HUGE 60% DISCOUNT TO NTA. It Has A Big Margin of Safety.

2) Foreward P/E is a low 3.66. Beating many Export Furniture and E & E Stocks hands down.

3) Its Debt is Well Cushioned By Its High Tangible Assets Still Not Revalued Yet. Its Properties were purchased long ago in strategic locations. If Company wanted to It Can Revalue All Its Properties Like HapSeng, Seacera & Eg and book them as immense profits.

4) Unlike All Other Steel Companies Impacted by China Steel Dumping PRESTAR Like KPSCB, KIMLUN & CEPCO Are Into Niche Manufacturing of Specialty Construction Materials like High Way Guard Rails and Wheel Barrows. So It has avoided the carnage caused by Cheap China Steel.

5) 10 Highways Including Pasir Gudang Highway, West Coastal Highway, Bandar Penawar – Sungai Ringgit Highway, Pengerang Highway & the 1,600 km Pan Borneo Highway will spur Great Demand for Prestar’s Highway Guardrails.

6) Prestar also stand to reap higher profit due to the collapse of nickel and iron ore prices by 60% to 70% as its Guard Rails use a lot of nickel. This will boost Prestar’s profits further.

7) Prestar also has a factory in Vietnam like Pohuat. With TPP now signed Prestar will do very well as both Vietnam & Malaysia are expected to be top beneficiaries.

8) PRESTAR Also Invest In The Shares of POSCO, In Which the World’s Greatest Investor, Warren Buffet of Berkshire Hathaway,  has a Share also.  Partnership in prosperity!

9) SEEING ITS BRIGHT FUTURE INSIDERS AND DIRECTORS HAVE BOUGHT MILLIONS OF PRESTAR SHARES ON THE QUIET. A Check with these Directors and Insiders Show That They Have Bought PRESTAR Shares As High As Rm1.00 And Now Still Buying Even More at Depressed Prices.

10) A 2 Cents Dividend has been proposed. That means that Prestar is giving a 4% yield. Will there be another double digit dividend like those years when INSIDERS Bought As High As Rm1.00?  It remains to be seen.

PRESTAR IS A STOCK WITH LIMITED DOWNSIDE WHILE ITS UPSIDE IS BRIGHT WITH THE UNFOLDING OF 10MP & 11 MASTER PLAN PROJECTS STILL BEING AWARDED.

 

Calvin has a target price of Rm1.00 (The Price Reached When PM Badawi implemented 9MP).

From 50 cents we expect a modest 100% Upside.

 

CHEERS!

Regards,

Calvin

{This article posted while holidaying in Australia.)

Note: On May 9th, 2007 PRESTAR Declared a 22% Special Dividend which equals to 11 cents. Prestar price crossed Rm1.00 then. Instead of selling Directors & Insiders were buying . As of now PRESTAR is selling at half price & Directors/Insiders are still buying. So will there be ANOTHER SPECIAL DIVIDEND?