APM Automotive Holdings looks the most attractive on valuations among 18 companies in Malaysia's consumer discretionary sector tracked by at least three analysts, data from Thomson Reuters StarMine shows.
The firm has high Relative Valuation (RV) and Value-Momentum (Val-Mo) scores of 96 and 90 respectively. The higher the RV score the cheaper the stock compared to its peers. It also has a high SmartHoldings (SH) score of 97 indicating a potential increase in institutional ownership.
The automotive component manufacturer's Earnings Quality (EQ) score has increased 10 points to 85 since its second-quarter results were filed on Aug. 17.
APM's net margin and free cash flow as a percentage of sales for 2011 beat the industry average by 3.7 percent and 9.8 percent respectively.
Its free cash flow as of June 2012, at 38 million ringgit, is nearly three times that from a year ago, while its net income has stayed relatively stable, increasing only 2 million ringgit to 30 million ringgit during the same period.
Of the four analysts tracking the stock, three give it a 'strong buy' or 'buy' while one has a 'hold'.
The stock has risen nearly 12 percent year-to-date, while the broader index is up almost 6 percent for the same period, as of Tuesday's close.
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 StarMine SmartHoldings model is a global stock selection model that ranks stocks based on the expected future increase, or decrease, in institutional ownership.
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 Sunil Nair)