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Bucking the downward trend
It would be fair to say that equities as a whole haven't performed this year. Now with Brexit clouding all markets, it's unlikely that there will be much to talk about in the weeks ahead. However, even though weakness afflicts most stocks, there are a small number of outperformers which have proven handsomely rewarding in 2016. . Why the market has chosen to reward these stocks and not others which are arguably as attractive is anybody's guess; perhaps aggressive marketing plays a part. Whatever the case, here are some of the year's best performers.
The first is cleanroom specialists Acromec, which listed on 18 April and now trades at around 67 cents - triple its offer price in less that three months. RHB in a 24 June report initiated coverage of the company with a "buy'' and a discounted cash flow target price of 92 cents.
"With a sturdy FY16F-18F (Sep) NPAT CAGR of 54 per cent backed by robust concrete government plans for the healthcare and medical sector, we think that its prospects are bright. Coupled with its potential M&A plans to further boost earnings (especially recurring net profit), we think that the stock is currently trading at an undemanding valuation'' said RHB.
The second is exhibition and interior architecture firm Cityneon, which is a subsidiary of Malaysia's Star Media Group. Last week Cityneon's shares rose to an all-time high of 89 cents which given that it started 2016 at around 30 cents, means like Acromec it has also tripled so far this year. The Star newspaper in an 18 June article about the company gave details of the company's upcoming Marvel and Transformers exhibitions and quoted extensively from a DBS Vickers report that referred to Cityneon operating "a relatively low execution risk model as outside the US it will find partners in the target region to undertake the operating risks''. Bloomberg's financial service gives the stock's price-earnings as 382 though, but as we noted earlier - who knows how the market decides on which counters to favour?
Third is one which readers might be familiar with - skincare and beauty products firm Best World. The company was in the news not long ago when it was queried three times in three months by SGX, followed by yet another query on some of the items in its accounts after it released its latest results. The stock started the year at about 33 cents and earlier this month hit an all-time closing high of $1.39 - more than four times up in six months. Its results however, were pretty decent so there is some fundamental underpinning.
Fourth, electronics firm Valuetronics. Its gain from 40 cents at the start of 2016 to about 51 cents now may not be as spectacular as those mentioned earlier, but a rise of 25 per cent in a terrible year for stocks is not to be sniffed at. Interestingly, Bloomberg gives its PE as 9, which suggests the stock may still be "cheap''.
Fifth is well-known seafood operator Jumbo Group, which listed last November at 25 cents per share and sells for about 57 cents now. If you have been watching this stock, you'd know it ended 2015 at about 43 cents so its gain for 2016 is now about 32 per cent - not bad at all. Clearly even though the majority of the market is underwater, there are pockets of value which have held firm.