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Stock Story: Genting Bhd Malaysia

There are many ways to find if a stock is over valued or undervalued, today, I will share one of the ways - using the valuation of the companies holdings. By using this method, I manage to find an interesting stock listed on Malaysian Stock Exchange - Genting Berhad.  

Genting Berhad is a prominent company in this part of the world engaged directly and through its subsidiaries provides leisure and hospitality gaming and entertainment business. It is one of the biggest Casino player in South East Asia.

The current stock price of the company is 6.90 Malaysian Ringgit (MYR) giving a market capitalization of 25 billion Malaysian Ringgit or 7.38 bln USD. What is interesting to note is that Genting has stake in 7 other companies and if we add up its total stake it works out to around 25 billion MYR or 7.5 bln USD. This clearly indicate the stock is undervalued.

By paying the current market price, I get access to the 7.5 bln USD stake in different companies plus get access to its core business as well which generates an Estimated EPS of 0.30 cents (for 09) and going by the average Casino Gaming P/E of 14 the core company price should be valued at a price of 4.3. This indicate the market is under valuing either the Core company Earnings or the holdings itself, but either way it means only one thing, the stock looks under valued.  

Disclaimer: no position in the stock. 

The data source is Bloomberg.