This company is one of my personal favourites for consistent returns and sound business structure. Its main business is operating Toto betting under Section 5 of the Pool Betting Act, 1967, leasing of on-line lottery equipment and manufacture and distribution of computerised lottery systems. It's a cash rich company as their business involves mostly cash transactions as customers buy betting tickets over the counter. It also has a very dominant business as it is the sole national lotto operator in Malaysia. The demand for its 'products' is also generally consistent regardless of market cycles is. This makes it a rather resilient stock.
Resilient Stocks For Dummies
A few days back, SJ Securities, ING Funds and TA Securities each released a list of companies that they deemed resilient. SJ Securities' head of research defined a resilient company as one whose earnings are not cyclical in nature. In other words the company's products or services will still command a healthy demand during a down market scenario. These are companies that would be a good pick for those who want to invest but do not have the time or expertise to keep track of market movement on a daily basis. It is also for those interested in more long term investments.
SJ Securities - Genting, Resorts World, Berjaya Sports Toto, Magnum, Top Glove, Supermax, Maybank, Public Bank, Jobstreet, Sunrise, TMC Life, Hovid, Pantai Holdings, KPJ Healthcare, Petronas Gas.
ING Funds - Public Bank, IOI Corp, Berjaya Sports Toto, Genting, Tower REIT, Tanjong.
TA Securities - Uchi Technologies, KFC, British American Tabacco, Chemical Company of Malaysia, Maybank, YTL Power, Amway, Public Bank, Carlsberg, F&N Holdings.
Whilst I think it doesn't take a genius to make these lists, they are satisfactory in most aspects. However it is important to take heed to the share prices of these companies. Most of these companies are popular or have a strong brand presence and thus many investors know about them. This drives the share price up as many people are chasing the same stock. Simple principle of supply and demand at work. It's better to wait for a slight market down than to buy these shares at a high and hope that they go higher. You might also be interested in reading a previous post of mine entitled The Smart Investors Pick Of High Dividend Paying Stocks. (Click on the underlined title and you'll jump straight to that post)
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