Asia Plus Securities (ASPS) recommends investing in 11 medium-or big-cap stocks with a P/E ratio of less than 15x, a high dividend yield, and solid fundamentals amid market volatility, lead by STA, STGT, AP, SPALI, NER, CPF, TVO, EGCO, RATCH, PTT, and LH.
The SET Index gained 7.28 points or 0.48% to 1,538.52 points on morning session closing on Tuesday, August 17, with a trading value of 42,801 million baht, despite a decline in regional markets.
Analysts highlight Domestic Plays in the expectation that lockdowns will be relaxed and also that the reopening procedure will be expanded to other tourist destinations. They forecast, however, that volatility will persist in the Thai market throughout the afternoon session, with the index expected to swing between 1,530 and 1,550 points.
As volatility remains, ASPS recommends investing less in stocks with high P/E ratio and switching to big-cap stocks with solid fundamentals and low P/E ratio. ASPS favors stocks meeting these criteria: 1) P/E ratio under 15x (inexpensive), 2) paying dividend (low fluctuation), 3) market capitalization over 10 billion baht (medium-or small-cap) and 4) “BUY” rating and upside (solid fundamentals).
The following 11 stocks meet these criteria including Sri Trang Agro-Industry (STA) (Mkt Cap.: 61.8 billion baht, P/E: 3.7x, Div Yield: 10.6%, TP: 47 baht), Sri Trang Gloves (Thailand) (STGT) (Mkt Cap.: 108 billion baht, P/E: 4.0x, Div Yield: 13.2%, TP: 50 baht), AP (Thailand) (AP) (Mkt Cap.: 25 billion baht, P/E: 5.7x, Div Yield: 6.1%, TP: 10.8 baht).
Supalai (SPALI) (Mkt Cap.: 44.7 billion baht, P/E: 7.4x, Div Yield: 5.4%, TP: 25.5 baht), North East Rubber (NER) (Mkt Cap.: 12.7 billion baht, P/E: 8.2x, Div Yield: 4.9%, TP: 9.5 baht), Charoen Pokphand Foods (CPF) (Mkt Cap.: 223 billion baht, P/E: 9.9x, Div Yield: 3.5%, TP: 35 baht), Thai Vegetable Oil (TVO) (Mkt Cap.: 25.8 billion baht, P/E: 9.9x, Div Yield: 7.8%, TP: 35 baht).
Electricity Generating (EGCO) (Mkt Cap.: 91.6 billion baht, P/E: 10.7x, Div Yield: 3.9%, TP: 230 baht), Ratch Group (RATCH) (Mkt Cap.: 63.4 billion baht, P/E: 11.2x, Div Yield: 5.5%, TP: 65 baht), PTT (Mkt Cap.: 999 billion baht, P/E: 12.3x, Div Yield: 3.4%, TP: 48.5 baht), and Land and Houses (LH) (Mkt Cap.: 95 billion baht, P/E: 12.5x, Div Yield: 6.7%, TP: 9.65 baht).