A STOCK picker’s goal is to beat the market.
Seems straightforward enough for professional fund managers, but throw in a heady mix of subdued global economic conditions, weak corporate earnings, a volatile currency and a continued outflow of foreign money from the local bourse and the whole exercise becomes a mission impossible, or almost.
Most investors would be happy to see their savings intact after a horrid year such as 2015.
But the majority of the stocks picked by a panel of fund managers surveyed by StarBizWeek in the early part of the year not only survived but thrived in this harsh market condition.
One such pick, namely Prestariang Bhd, doubled its share price over the past 12 months.
The stock, chosen by MIDF Amanah Asset Management chief executive officer and chief investment officer (CIO) Azlan Hussain, closed at a record high of RM2.97 on the last trading day of 2015.
Azlan stuck his neck out in January to say the selloff on Prestariang in late 2014 was excessive and a re-rating on the stock was on the cards.
Prestariang, according to Azlan, has no comparable peer on Bursa Malaysia as it is in its own niche of software licensing and ICT training.
Meanwhile, the emergence of Majlis Amanah Rakyat (Mara) last year as a substantial shareholder, guaranteed a steady flow of Mara sponsored students to Prestariang’s training facilities.
While Prestariang continues to sizzle, the mood had turned cautious on IFCA (MSC) Bhd.
The stock, which was Kenanga Investors Bhd’s CIO Lee Sook Yee’s top pick in January at 82 sen, had surged to an all-time high of RM1.84 in May.
But investors’ sentiment on the software maker turned cautious in recent months, amid worries that the stock run-up may have been too far and too quick.
Shares in IFCA were last traded at 93.5 sen on Thursday, holding to a 14% gain for the year.
It is worth noting that all the six stock picks – Prestariang, IFCA, Barakah Offshore Petroleum Bhd, OCK Group Bhd, Berjaya Auto Bhd and Aeon Co (M) Bhd were in the money during the first half of the year.
But as the market condition deteriorated in the second half of 2015, three stocks – Berjaya Auto, OCK and Aeon – ended the year below their January entry price.
The worst hit was Aeon, down 10% for the year. The FBM KLCI fell 3.9% in 2015.
During a mid-year review in June, we asked two other fund managers for their pick to ride out the volatility. The one recommended by Kumpulan Sentiasa Cemerlang Sdn Bhd’s senior fund manager Yeoh Keat Seng, turned out to be an inspired choice.
Over the past six months, Evergreen Fibreboard Bhd had gained 90% at its closing price of RM2.36 on Thursday.
In June, Yeoh saw Evergreen as a recovery play with its quarterly profits rising steadily since September 2014 as the medium density fibreboard maker benefited from lower material and production costs, improving selling prices and a weaker ringgit.