Puncak- a safe stock for medium-term investment

Our market is so hot that if we are not careful, we could end up buying too many stocks that are trading at all-time high. On that count, I am also guilty for highlighting the bullish breakout of UEMLand which was trading at a new high.

Below I have appended the chart of a boring stock, Puncak which has the tendency to trade in a range between RM2.30 & RM3.00. There are many research reports that value this stock at prices between RM3.50 & RM4.00. One such report is a MIDF Research report dated August 27, 2010 which valued the company at RM3.55 [or at a discount of 30% to its Net Present Value]. While the report is a bit outdated, I believe the value of an on-going concession is fairly transparent & it won't change very much despite the tough political problem in the state of Selangor.


Chart: Puncak's weekly chart as at Jan 6, 2011_3.00pm (Source: Quickcharts)

Based on cheap valuation & good technical support, Puncak could be a good stock for medium-term investment.