WITH Christmas just around the corner, the spirit of giving is here. Whether it is a gift for a friend or for a family member, choosing the right gift is important.
So what do we buy? Retailers are only too eager with their suggestions.
Tech gizmos? Surely we couldn’t go wrong with the iPad mini Air, Apple Inc’s latest coolest offering. However, how about giving something more meaningful, something which appreciates over time.
Something like stocks.
Below are some “gift” stock ideas.
Let’s put aside tech toys for a while. How about buying Maxis shares instead?
Based on a consensus of 35 analysts, the non-believers are aplenty. There are 16 analysts with “hold” calls, while only six have “buy” calls. There are 13 “sell” calls. Over a one year period, Maxis has delivered 16.32% in returns at its current share price of RM7.20.
Maxis, once the unbeatable No. 1 cellular communications player in Malaysia, has lost a bit of lustre. That is set to change, though.
2014 will be all about Maxis’ transformation. New chief Morten Lundal is upbeat about the future. He concedes that 2014 will be the transition year for improving internal processes and reinforcing its base before reaping the benefits going forward.
Lundal expects its 2014 dividend per share to remain at 40 sen. Its 2014 capital expenditure will rise to RM1.1bil from RM850mil this year, while revenue growth will likely remain at the low single digits.
A research note from RHB says Maxis management will work on improving its distribution network and branding as part of its efforts to stem the erosion in prepaid market share.
“On its postpaid services, pricing data properly will be a priority. Meanwhile, the home segment still faces difficulties. We believe that protecting and then growing its prepaid business will be a key focus while the home segment will likely take a backseat,” RHB says.
So instead of buying a luxury handbag for the wife, how about Bonia shares instead?
At its current share price of RM3.51, Bonia has delivered year-to-date returns of 56% or a hefty RM1.26. It has a market capitalisation of RM707.5mil and is trading at about 14 times price earnings (PE) for its year ended June 30, 2014.
For the first quarter to Sept 30, Bonia’s net profit was down 8.32% to RM14.22mil while revenue improved 7.46% to RM168.4mil.
In August, Bonia saw the entrance of British Virgin Islands-based investor Milingtonia Ltd as a substantial shareholder. Milingtonia emerged with a 6.82% stake or 13.75 million shares.
Bonia has said that it wants to be a billion-dollar company. It aims to achieve revenues of RM1bil by the year 2015.
In its goal to achieving this, Bonia wants to conduct two more public listings around the region and be well-established in five other countries. Bonia is particularly targeting the Middle East and South-East Asia to build its branding.
Bonia’s website describes it as a manufacturer, marketeer, retailer of leatherwear, footwear, men’s apparel and accessories. It has 883 sales outlets and 103 boutiques around the world.
In its latest results note, Bonia says it will continue to invest by adding new brands to its portfolio and increasing its footprint primarily in the luxury segment which has proven to be relatively resilient. In the preceding financial year, Bonia has secured the rights to develop, distribute and market Enrico Coveri, a renowned Italian brand founded by Enrico Coveri.
Chocolates and biscuits are fattening and give only temporary pleasure. Nestle (M) Bhd’s shares, however, are a different story. With its steadily increasing dividend yield and slow but certain growth, this would also be equivalent to buying some security for loved ones.
For the nine months to Sept 30, net profit was up 13.64% to RM461.25mil while revenue was up 5.58% to RM3.65bil. The improvement in its recent results were due mainly to stable domestic demand and favourable raw material cost.
Last year, the stock delivered dividend yields of 3.1%, and this year, analysts estimate a yield closer to 3.5%.
Of the 11 analysts polled in Bloomberg, there is only one buy call, six hold calls and four sell calls.
With a share price of RM68.50, the stock appreciated by a decent 9.01% on a year-to-date basis. Its price point may be rather steep, but you don’t need to buy 1,000 shares of Nestle. You can buy 100 shares.
The stock is now trading at a 2013 PE ratio of 29 times, which is the typical PE it has been trading over the last three years. The stock also has a market capitalisation of RM16.06bil.
Based on its latest results, domestic sales are encouraging. Confectionery and food & beverage recorded robust growth.
Nestle is also investing RM150mil in the first phase of its new plant, which will double its production capacity of its ready-to-drink (RTD) segment in Malaysia.
The facility will produce the company’s RTD liquid beverages, such as Milo,Nescafe, Nestle Omega, Nestle Low Fat Milk and Nestle Full Cream. The factory, which is built adjacent to the company’s existing factory in Shah Alam, is expected to be fully operational by May 2014.
She will get bored with a new dress quickly. So why not buy apparel stock Padini Holdings Bhd instead? This is afterall one of the more successful Malaysian apparel brands.
Its share price, however, has been a different story. The stock is down 1.88% to RM1.80 on a year-to-date basis. It is also trading at a 2014 PE of 12.68 times. It does, however, have a very attractive dividend yield of about 6.1% and this is anticipated to increase.
It currently has nine labels in its family of brands and retail in 330 free standing stores, franchised outlets and consignment counters in Malaysia and worldwide. These labels, which carry the Made in Malaysia stamp, are sold in Bahrain, Brunei, Cambodia, Egypt, Indonesia, Kuwait, Morocco, Myanmar, Oman, Pakistan, the Philippines, Qatar, Saudi Arabia, Syria, Thailand and United Arab Emirates.
Its brands are Padini, Seed, Padini Authentics, PDI, P&Co, Vincci, Vincci Accessories, Tizio, Miki Kids and Brands Outlet.
For its first quarter to Sept 30, Padini’s net profit increased 9.58% to RM27.74mil on the back of a 8.04% increase in revenue to RM217.22mil. These improvements were backed by stronger sales in conjunction with the Hari Raya and National Day festive seasons.
The earnings were also boosted by an increase in exports and improved numbers from its Brands Outlet stores.
RHB Research says the Padini label is still the largest revenue generator, contributing 31.2% of total revenue while sales from Brands Outlet made up 28.6%.
The company has proposed a 2.5 sen interim dividend and 1.5 sen special dividend.
Padini is now on an outlet expansion drive and plans to open seven outlets. It has opened a Padini Concept Store (PCS) and Brands Outlet store (BO) in Gurney Paragon Mall, Penang in the first quarter. Three BO stores and two PCS outlets will open on Langkawi Island, in Seremban and Miri in the second quarter.
Source: Star Online
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