Due to many requests from the audience, I will occasionally feature some good Malaysian stocks for long term investment. With Bursa trading at multi year highs, finding a company that is undervalued with growth potential is becoming increasingly difficult. But some gems do exist. I'll start with IGB REIT.
Q1 2015 Result
Revenue Growth 9.9%
Profit Growth 21.1%
EPS Growth 20.1%
Current Ratio 1.97
Gearing Ratio 0.28
SP/NAVPS 1.23x
Distribution Yield (2014) 5.8%
IGB REIT had a roaring start in Q1 2015. Should the trend continue, we could see a further increase in the Income Distribution. Last year, the Income Distribution increased by 10.8% vs 2013.
Looking at the Current Ratio and Gearing Ratio, IGB REIT seems to be managing its debts rather well too.
With the Bursa trading at multi year highs, investors should reduce their expectations for capital appreciation, but rather look at stocks with long term growth in its dividend.
I have a BUY recommendation for IGB REIT as long as it remains below RM1.40. Any price above RM1.40 will see its yield falling below 5.5%. which will render it less attractive to hold for long term investment. But because our risk tolerance differs, it is important that you do your own research as well.
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