Primary tabs

GEAR gets ‘buy’ call; UOL shows resilience

Trinity Chua Published on Fri, May 26, 2017 / 9:25 AM GMT+8

A-

A+

This past week saw the Straits Times Index slip five points and our Singapore Market Portfolio lose 0.6% of its value. Just three of the 12 stocks in our portfolio experienced a gain: Coal miner Golden Energy and Resources (GEAR) was up 2.3%, Singapore Exchange gained 1.7% and high-tech component and equipment manufacturer Venture Corp rose 1.1%. Two others — speciality oil distributor AP Oil International and gold miner CNMC Goldmine Holdings — ended flat week-on-week.

After several weeks of underperformance, GEAR has rallied in response to a positive initiation report by RHB Research Institute Singapore. The brokerage has a “buy” call and a price target of 71 cents, representing potential upside of 59.6% from the stock’s close at 44.5 cents on May 23. The stock has climbed 3% since the research report.

The new price target values the company at 14.7 times earnings for FY2017 and 12.4 times earnings for FY2018. “A key catalyst is the substantial earnings growth going forward, owing to a sizeable increase in coal production,” says the research house.