Will Tanjong PLC split its power and gaming division? Maybank Investment Bank mentioned about splitting the power and gaming will bring more value to Tanjong on 5 November 2009. Tanjong stock price up 44 cents from RM15.38 to RM15.82 that day. Up another 58 cents to RM16.40 the next day (Highest intraday ~ RM16.72).

Tanjong intraday performance on 06 November 2009

Based on the technical research from Maybank Investment Bank on 6 November 2009, Tanjong has 2 upside targets of RM16.70 and RM17.78. Well, Tanjong hit the first upside target easily that day. How about the next one? When can it achieve that? And come to another question, why there are 2 research reports from Maybank Investment Bank about Tanjong in these 2 days. And it brought good news too. Some investors did fall into buying flow. Does it have anything to do with Maxis re-listing? Will Ananda Krishnan split Tanjong into 2 divisions? If Tanjong split, it will not be in FBM KLCI (top 30 stocks) anymore. Will it?

So many questions but no answers…

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Tanjong Plc is one of the 30 FBM KLCI stocks. It is independent power producer and Malaysian number forecasting operator (lottery). It is a good defensive stock because of its attractive 6.28% dividend yield (based on RM14.30 market price). With current fixed deposit rate of 2.5% per annual, Tanjong Plc is good to invest due to its good track of historical dividend payout.

Tanjong Plc performance since June 2009

I started to study the research done by OSK Research, Standard & Poor’s (S&P) Equity Research by Public Bank and Maybank Investment Bank. The 12-month target prices given by these research firms are about the same RM18.60, RM17.00 and RM17.60. I checked back the previous recommended target price. OSK Research gave a very aggressive price that cannot be reached. S&P is still okay to follow but failed to reach too. Why? It is all because of other factors like economy, politics. Therefore, we should only use it as guidance. Study and make your own decision.

What price should we sell? Nope. I don’t sell attractive dividend yield stock. We should keep it unless the company is not performing anymore. The question we should ask… What price should I buy? Buy at the discounted price during economy downturn. Normally, people stay away from stock market. But that’s the best time to buy these high dividend yield stocks actually.

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