----- Original Message ----- From: Erwan Teguh Subject: Time to buy
The market correction is not much fundamentally driven as far as I can gather. It's Chinese contagion effect, but again nobody seems to figure out why so. Yes, results have not been great so far, but deviations are not significant. The JCI has been underperforming YTD, weak results aside, PGAS fiasco, bird flu, and flood among others the negative drivers. I would take today's sharp correction a bottom fishing opportunity. Some quality names such as Bank Rakyat (BBRI IJ), TLKM IJ, Astra (ASII IJ) should be profitable trades, so are some consumer stocks such as Indofood (INDF IJ) and Ramayana (RALS IJ). But of course, it's more exciting to look at who's the cheapest of all? A reminder our screen of 68 stocks, on EV/EBITDA, PER versus growth, and ROE, and it's Aneka Tambang (ANTM IJ) coming out on top, at FY07 EV/EBITDA of 2.8x, 5.7x PER and ROE in excess of 51%. Operating leverage from better volume and lower cost are potent combination, therefore our 50% EBITDA growth, 57.5% earnings growth estimate in FY07. Surging gold price is an icing. Talks of IRC, i.e. merger of mining SOEs another catalyst. These are reasons behind our recent upgrade to BUY and Rp12,500 TP. Rgds Erwan
