Stock Watch (ALAM)

Company: Alam Maritim Resources Berhad

Industry: Oil & Gas

3yr Average ROE: 19.47%

5yr Average EPS Growth Rate: 33.26% 

4yr Average DY: 2.61% 

5yr Average P/E: 12.04

Dynaquest Rating: 3.5

Fair Value: RM 2.40

In the FY09, the Group's earning soared by 22.5% due to the higher operating profit from the charter hire of its vessels. For the next 5 years, this company is expected to deliver increased profit and better earnings due to the announcement of the 10th Malaysia Plan which the government stated that it will be concentrating on the development of the oil and gas sector as one of the national key economic area (NKEA).

With this, I expect that oil and gas stocks will continue to grow over these years. Furthermore, by the end of this year, Petronas will be listing its Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) and its petrochemical business in Bursa Malaysia. It is hoped that with these new listings, the PE ratio of the oil and gas stocks will be adjusted to really reflect their true value.