BT: INVESTMENT bank Merrill Lynch has picked plywood manufacturer Ta Ann Holdings Bhd, gaming operator Resorts World Bhd and banking group AMMB Holding Bhd as its most preferred stocks in Malaysia.The bank believes the three stocks will appeal to investors with an investment horizon of less than 12 months. Merrill, in a report yesterday listing its favourite and least preferred stocks for April, said it replaced MMC Corp with Ta Ann as it believes the latter will benefit from a cyclical recovery in plywood prices.It has a target of RM10.15 on the stock, implying a 50 per cent upside from its closing price of RM6.75 yesterday.
Ta Ann, whose shares have been rising since mid-February, is also deemed a "buy" by at least five of six other research houses that track the company. This includes Credit Suisse, which has a target of RM9.20 on it. Merrill likes AMMB for its plans to double earnings this year and raise return-on-equity to 20 per cent by 2011. "The market is completely ignoring improvements in AMMB's business, in our view," it remarked. Merrill has a RM5.70 target on AMMB, which suggests a 58 per cent upside from its last traded price of RM3.60. Fifteen of at least 20 other research houses also have a "buy" recommendation on the banking stock. Merrill put a RM4.50 target on Resorts World, saying potential catalysts include e-gaming and gaming capacity increases.
Ta Ann, whose shares have been rising since mid-February, is also deemed a "buy" by at least five of six other research houses that track the company. This includes Credit Suisse, which has a target of RM9.20 on it. Merrill likes AMMB for its plans to double earnings this year and raise return-on-equity to 20 per cent by 2011. "The market is completely ignoring improvements in AMMB's business, in our view," it remarked. Merrill has a RM5.70 target on AMMB, which suggests a 58 per cent upside from its last traded price of RM3.60. Fifteen of at least 20 other research houses also have a "buy" recommendation on the banking stock. Merrill put a RM4.50 target on Resorts World, saying potential catalysts include e-gaming and gaming capacity increases.
Meanwhile, Merrill listed Tenaga Nasional, Astro All Asia Networks and Bursa Malaysia as its least preferred stocks in the country. Astro replaced British American Tobacco on the list as the pay-television operator's valuation was deemed more expensive and lacked yield and potential catalysts.
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