Hartalega Holdings Bhd leads on analyst revisions among eight companies in Malaysia’s healthcare sector tracked by at least three analysts, data from Thomson Reuters StarMine shows.
The glove manufacturer has an Analyst Revision Model (ARM) score of 98, the highest in the sector. This score has increased 40 points over the past 30 days.
It has high Smartholdings and Earnings Quality scores of 94 and 80 respectively. The former suggests a potential increase in institutional ownership while the latter implies good earnings sustainability over the next 12 months.
Hartalega’s forward 12-month EV/EBITDA and P/CF ratios beat industry averages by 2 percent and 9 percent respectively. Its quarterly net income grew 28 percent to 59 million ringgit between September 2011 and 2012 while its quarterly free cash flow rose 27 percent to 42 million ringgit during the same period.
Seven of 13 analysts tracking the stock have raised EPS estimates on the firm for 2013 by an average of 3.3 percent since Nov. 7. Eight of the 13 have also increased EPS estimates for 2014 by an average of 5.1 percent during the same period.
Of the 12 analysts rating the stock, seven give it a “strong buy” or “buy”, four have a “hold”, while one recommends a “sell” rating.
Hartalega currently trades at an all-time high of 5 ringgit, around 86 percent of its intrinsic value of 5.79 ringgit. The stock price has risen nearly 80 percent over the past 12 months, while the broader index gained over 10 percent during the same period, as of Thursday’s close.
On the other end of the spectrum, Adventa Bhd lags the sector with an ARM score of 22.
On Nov. 7, The company said second-quarter net profit rose 27 percent on year to 58.6 million ringgit, while revenues increased 11 percent to 763 million ringgit.
StarMine’s Analyst Revision Model ranks stocks based on analysts’ revision of earnings and revenue estimates and changes in their ratings, and usually gives additional weight to analysts who have been more accurate in the past.
The StarMine SmartHoldings model is a global stock selection model that ranks stocks based on the expected future increase, or decrease, in institutional ownership.
A high score on StarMine’s Earnings Quality model signals strong earnings sustainability over the next 12 months based on a company’s past operating performance. (Reporting By Reshma Apte; Editing by Sunil Nair)