MIDCAP-Faber most attractive on valuations in Malaysia's healthcare sector

Tue Oct 9, 2012 2:23am EDT

Faber Group looks the most attractive on valuations among eight stocks in Malaysia's healthcare sector tracked by at least three analysts, data from Thomson Reuters StarMine shows.

The facilities management company has a Relative Valuation (RV) score of 96, the highest in the sector, and an above average Value-Momentum (Val-Mo) score of 80. The higher the RV score the cheaper the stock compared to its peers.

Faber's Earnings Quality (EQ) score rose eight points to 98 after the company announced its second-quarter earnings on Aug. 30.

Its free cash flow (FCF) rose just under three times to 108 million ringgit for the quarter ending June from a year earlier, while net income rose only 3 million ringgit to 20 million ringgit during the same period.

Of the four analysts tracking the stock, two rate it a 'buy' while one each gives it a 'sell' and 'strong sell' rating.

The stock currently trades at 58 percent of its intrinsic value of 2.18 ringgit. It is down just over 29 percent so far this year, while the broader index is up nearly 8.5 percent in the same period, as of Monday's close.

CONTEXT:

Faber said on Aug. 9 that its second-quarter net profit increased 18.3 percent, or just over 3 million ringgit, to 19.5 million ringgit. Its revenue increased nearly 17 percent to 218 million ringgit during the same period. [ID: nKLS89101a]

StarMine's Relative Valuation model combines six different ratios that measure a company's valuation and then ranks it compared with all other stocks in the same region.

StarMine's Val-Mo model provides a 1-100 percentile ranking of stocks and rates stocks based on a combination of two value and momentum metrics.

The Earnings Quality model is a percentile (1-100) ranking of stocks based on sustainability of earnings, with 100 representing the highest rank. (Reporting By Reshma Apte; Editing by Jijo Jacob)

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