OSIM, SC Global, HG Metal, Hyflux and Wee Hur Holdings

AmFraser identifies stocks have taken a hard knock since April 2012. Believe that some of these small to mid cap stocks may have been unfairly bashed down relative to their benchmarks FTSE Mid and Small cap indices. House shortlisted stocks based on three criteria: 1) YTD % change in price greater than relative benchmark’s % change in price, 2) Presence of corporate share buybacks YTD and in particular since the correction in early May this year; and 3) A positive change in % of insider ownership in the period of 1st May 2012 – 15June 2012.. In this regard, house picked 5 stocks, OSIM, (BUY), SC Global ($0.960, BUY), HG Metal (UNRATED), Hyflux (UNRATED) and Wee Hur Holdings (UNRATED). 1) OSIM (BUY, TP: S$1.600) Saw strong share buyback actvity YTD and particularly in the past 45 days, with 4.4m shares bought back at an average of $1.17, a price point at which investors can now still enter. Insider ownership also rose 0.26% in the same period. With OSIM’s strong earnings growth potential and a recent share price correction, house highly recommend that investors accumulate this stock now. 2) SC Global (BUY, TP: S$2.000) has repurchased 0.5m (0.12%) of its shares at an average price of $0.954. The group is in a better position to weather the crisis with net gearing pared down from a high of 3.3x in FY08 to 1.8x in 1QFY12. Believe that SC Global’s share price has reached a trough, trading at a hefty 53% discount to fair value. BUY. 3) HG Metal Manufacturing: Is back to its 2009 low price, and now at 0.6x P/B a loss of $53mil is implicit, which may be too pessimistic given that there was no steel‐price bubble last year unlike in 2007. 4) Hyflux (UNRATED) has repurchased 27.5mil (3.25%) of its own shares across a broad price range of $1.00 to $1.60. Consensus estimates indicate that earnings may have bottomed out last year. 5) Wee Hur Holdings (UNRATED) is trading at a forward 2.5x P/E based on 2012 consensus estimates, and 7.3x for 2013. Based on last year’s div, its yield is 7% with a potential bonus payout given this year’s expected outperformance.