One of the most undervalued stocks - Kluang Rubber Co (M) Bhd (Rm 3.24)

This is a greatly undervalued stock but owning this stock can be very frustrating. Its very very thinly traded and very often not a single lot traded for days. To buy is difficult and to sell is equally difficult because everyday there are very few buyers and sellers and the offered price between buyer and seller is usually very wide.

For the whole of 2016, the stock price stayed around Rm 3.20.

Technically, it has reached a possible turning point, a major wave 1-2 and wave (i)-(ii) situation. Next up is likely to be the wave (iii).

But if the coming wave (iii) stop at the upper trendline, it can continue to move sideways to form another X-abc.    

From its 17-year chart, I noticed an 'inverted head and shoulder' pattern with its wave A touching the neckline before moving sideways for the next 24 months.

Its first 3 quarters earning per share were 7.05 sens, 0.45 sens and zero respectively. Its latest reported net assets per share is Rm 10.14. It has a strong balance sheet.

Share capital is Rm 63 millions consists of 63 millions share of Rm 1.00. There is no borrowing.

It has Rm 415 million of 'Available for sale investments' and cash of Rm 257 million. Cash alone is Rm257/63 = Rm4.07 a share.

To check its 'Available for sale investment', I have to refer to its 2016 annual report.

It is the value for quoted share outside Malaysia Rm 333 million and precious metal (must be gold) Rm 21 million.

From its annual report I have spotted the following.

It has 43.4% of Sg. Bagan and 45.3% of Kuchai. 

For quoted share inside Malaysia, the value at cost and is only Rm8.8 million but at Friday's closing price of Rm3.02 for Sg. Bagan and Rm1.17 for Kuchai, the total market value for its 43.4% of Sg. Bagan and 45.3% of Kuchai is Rm 151 million. The fair value stated in the report is Rm 124 million.

I just wonder what can be the current actual value for its quoted share outside Malaysia that was stated at Rm 333 million and its precious metal stated at Rm 21 million.

Kluang at Rm 3.24 is definitely greatly undervalued but if its share price refused to move higher day in, day out, holding the stock can be very frustrating for a small investor.

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