Table 1: NTPM's 8 quarterly results
From Chart 1 below, we can see NTPM's strong growth in both its top-line & bottom-line for the past 4 years.
Chart 1: NTPM's 16 quarterly results
NTPM (closed at RM0.605 yesterday) is now trading at a PE of 11.6 times (based on annualized 1Q2010 EPS of 1.3 sen). With growth averaging about 15% over the past 3 years, NTPM's Price/Earnings To Growth ('PEG') ratio is about 0.63 times. A PEG ratio of less than 1 means that the stock is attractive.
PEG ratio = PE / (Growth Estimate + Dividend Yield)
= 11.6 / (15 + 3.5)
= 0.63 times
Since the technical breakout in March 2009, NTPM has doubled (see Chart 2 & 3 below). Trend-follower may jump on board when NTPM's share price pulled back to its 20-day SMA (presently at RM0.56).
Chart 2: NTPM's daily chart as at Sept 3, 2009 (Source: Tradesignum)
Chart 3: NTPM's daily chart as at Sept 3, 2009 (Source: Tradesignum)
Based on continued strong performance, attractive valuation & positive technical outlook, NTPM is still a good stock for long-term investing.
Dear Mr. Alex,
ReplyDeleteIn your analysis of NTPM, 1Q2010 eps is 1.3 sen. How was this figure derived ? Why not use the EPS of the last 4 quarters? Also is the 15% growth based on EPS or P/E?
I would like to know how does a stock investor benchmark his portfolio against the index ? For example bought 1 lot of stock A at RM1 when index was 1000. A month later bought 1 lot of stock A at 1.10 when index was 1200. Now the index has reached 1400 and the price of stock A is 1.30. Has my portfolio underperform or beaten the index? Apperciate your comments.
Thanking you in advance.
Jonathan.
I guess this is a defensive stock that worth to look at now. But at the current level, I would think there is another 10% uprise on NTPM. Unless it penetrate to other regional market, its revenue will not be fantastic but fixed in the band.
ReplyDeleteJust asking your opinion on Dutaland. I am researching on this little stock. I felt that the plantation and properties in KL is making it attractive with high liquidity.
Another is Utusan, a low liquidity UMNO stock. Strip away the cash per share (RM0.60), investor is only paying for RM0.25 for this company.
Have luck.
Hi JR,
ReplyDeleteThe 1Q2010 eps of 1.3 sen was obtained from the announced results. If you look at the last 8 quarterly results, you can see a clear trend in NTPM's net profit & EPS. To use the last 4 quarters' EPS would be under-estimating the potential of the company. To factor in a continuous growth may over-estimate that potential too. At the very least, you should use the latest earning as the basis for valuation. In the past, I have used the last 4 quarters' EPS for valuation because I do not think the growth can sustain or for comparison purposes. Being a producer of a stable consumer product, I believe NTPM can maintain its current sale level or maybe even improve upon it. Regarding the 15% growth rate, I computed the growth rate of the last 4 quarters over the preceding 4 quarters; and repeat the process another 2 times; and then average them. It is not precise but it gives a rough number of NTPM's profit growth.
Regarding benchmarking one's performance against the index, I have to admit that my knowledge of that subject is no better than yours. In your example, the stock A having gained 30% seems to under-perform the index which gained 40%. The question that follows is whether you should switch to a better performer. That's a tough question. Generally, stocks can go through periods of poor performance before picking up strongly. A good example is Maybank which has done very well in the past 3 months as compared to the preceding 3 months. Similarly, RHBCap & HLBank have been poor performers in the past few months but are now showing of catching up. I believe that RHBCap & HLBank's uplegs have just started while Maybank may trade sideway for the next few months before rallying further. How do one move from one stock to another? By looking at the announced results & the charts.
Hi Solomon,
ReplyDeleteI agree with your take on NTPM. Have they expanded overseas? I think they have. Except for Singapore, the other markets are fairly small. There are two ways of looking at this; it's either a great opportunity for NTPM, with so much untapped markets out there or one may say that NTPM is still not making any significant headway overseas.
This is my thoughts on Dutaland & Utusan. Dutaland is still in the midst of sorting out their financial positions. It has benefited from high CPO prices last year & it may benefit from the recovery in property sector this year. Chartwise, it has broken above its downtrend line at RM0.30 in March. It is presently in a short-term uptrend with support at RM0.55.
Utusan's financial performance has been poor. With the present recovery, it will receive a boost but I doubt it will be very exciting. Chartwise, it has also broken above its downtrend line at RM0.60 in April. A tentative short-term uptrend may have formed. Good horizontal support is seen at RM0.70-80.
Dear Mr. Alex,
ReplyDeleteThanks for the feedback.
BR.