Tanjung Offshore Berhad looks the most attractive on valuations among 10 stocks in Malaysia’s energy sector tracked by at least three analysts, data from Thomson Reuters StarMine shows.
The firm has a Relative Valuation (RV) score of 95, the highest in the sector and an above average Value-Momentum (Val-Mo) score of 76. The higher the RV score the cheaper the stock compared to its peers.
Tanjung’s Earnings Quality (EQ) score has increased 14 points to 66 since the company’s second-quarter earnings were announced on Sept. 4.
The oil and gas services provider’s gross margin rose to 38 percent in the June quarter from 21 percent in the previous quarter.
Its free cash flow (FCF) rose nearly eight times to 53 million ringgit for the quarter ending June from a year earlier, while net income declined 13 million ringgit to a net loss of 6 million ringgit during the same period.
All four analysts tracking the stock give it a ‘sell’ or ‘strong sell’ rating.
The stock is up nearly 14 percent over the past 30 days, while the broader index gained 1.17 percent in the same period, as of Friday’s close.
On the other end of the spectrum, Sapura Kencana Petroleum and Bumi Armada Bhd are the most expensive stocks in the Malaysian energy sector with an RV score of 23 each.
Tanjung’s second-quarter net profit after taxation declined over 11 billion ringgit year-on-year to a net loss of 4.7 billion ringgit. Its revenues also declined over 50 percent to 64 billion ringgit during the same period.
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)