I have been meaning to analyse this baby for some time now because it has been the favourite of a lot of analysts and I get quite a lot of emails about this one. As you can see from the scorecard, this only achieves a middle score of 5. Reason? I penalised it for its low profit to liability ratio and it also scores a low ROA ration, which means that this company has a big balance sheet. Well, what do you expect from an energy company? As I have said before, my company scorecard favours cash cows and punishes giants and YTL is a bit of both…
Many other sources have published the story behind its prospects as a good candidate for an energy play so I won’t repeat those comments here except to say that it wins a place on my watchlist because it is one of the best ways to play power in Malaysia (I myself played this back in Sept when it got whacked down). However, lately, the charts have not been looking so good, given the negative divergence on the RSIs and PE heading up to 13-15. I think I will let this one go for now and look for a better opportunity.
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