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Best Stock in CPO Sector, 2010

At the previous article, I mentioned that the biggest CPO company today based on its asset is UNSP with Rp12.4 trillion. But if we see from the market cap or the company’s price in the market, UNSP is not the biggest company. The biggest CPO company in IDX at the moment is AALI with market cap Rp34.3 trillion, then LSIP with Rp13.3 trillion, and SMAR with Rp12.5 trillion. Then where is UNSP position?

Well, you don’t need to surprise if I say UNSP is the second lowest selling of CPO companies in IDX after TBLA. How come? It is really possible because UNSP is the only CPO company in IDX who has many loss in the last few years. In other hand, TBLA becomes the lowest one because it is a small company whose asset is merely Rp2.8 trillion.

So, the next question is that which CPO’s share has the brightest prospect in the future?

You may notice that AALI has gone down continually in the last few weeks. Why? Is its performance at first quarter 2010 good, isn’t it? It is true that its performance is good, as yesterday AALI noted an increasing on its net profit at 24.9%. The problem is that its price is too expensive. AALI price at closing today is 21,800, AALI notes PER 31.6 times which is the biggest PER in CPO sector. (imagine when its price is still 25,350, how much its PER?). Its market cap at Rp34.3 trillion is also too high, comparing with the second rank (LSIP) which only Rp13.3 trillion. Honestly, I also don’t understand why AALI can go up till over 25,000 in the last few weeks. In fact, if we see from its fundamental, its fair price will be only in 15,000 - 17,000 range. Even if we see from its technical side, AALI can only stand in above 20,000.

Unfortunately, some of the CPO companies with the best performance are those companies whose stock prices are the most expensive. AALI, SGRO, and LSIP are the three CPO companies with the best financial performance at first quarter 2010. However, their price in this recent time, have been too high, with market cap in average are above thrice from its each equity value.

The other issuers which can be classified as expensive companies are GZCO and BWPT. Especially GZCO, its share has gone up 78.3% during 2010.

The CPO shares which still cheap are UNSP, SMAR, and TBLA. For UNSP, even its share is cheap but the possibility for its stocks advanced during recent time is little because UNSP is the member of Bakrie Seven Brothers (B7). As we know, the chef of the B7 has not yet entered the kitchen. However, the attainment of obtained net profit at first quarter 2010 makes UNSP has an opportunity to advance its stocks naturally; even the opportunity is of course small.

SMAR? This company’ stock is a little bit strange. SMAR is a big company, but its share is not liquid at all. On the other side, its volatility (the fluctuation of its share) is quite big. The movement of its share during this year does not follow its fundamental at all. The SMAR is the subsidiary of Sinarmas Group. Unfortunately, we cannot install our share here even though the SMAR’s performance is good.

So, it seems that TBLA becomes the last choice. Considering its PER value merely about 9.2 times, its market cap which only 1.7 times of its equity value, and the increase of net profit which equal to 96.7% at first quarter 2010, TBLA stock have potency to be going up in the recent time. Unfortunately, because TBLA is a small share, you should beware of the share price speculation game which could probably happened to it. However, as long as my research, TBLA is relatively safe from the cooking show of market makers.


Originally written on Monday, Mei 3, 2010

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