Taiwan a Heavy Sell: Analysts

Watch the video with Andrew Stotz or read Watching the Street: Taiwan below.



Consensus Recommendations: Taiwan

Analysts haven’t had very positive recommendations on Taiwan for the past few years, and Taiwan currently has the most negative recommendations in Asia.

This may be a product of the nation’s slow growth. The economy is expected to grow by just 1% in 2016.

Learn more: How to Benefit from Our Watching the Street Charts

Among companies with positive recommendations, Taiwan Paiho produces different kind of tapes and has seen a share price gain of 30% YTD.

Analysts haven’t been positive on #Taiwan for the past few years

Even though mobile devices producer HTC’s share price has lost more than 90% since its ATH in May 2011, analysts remain negative and don’t expect a turnaround.

Consensus Earnings Estimates: Taiwan

Consensus EPS growth estimates have decreased since 2012 and actual EPS growth has also fallen since 2013. The estimate is now at 7%, unchanged from August 2016.

Egis Technology produces fingerprint sensors used in mobile devices and has seen a share price gain of almost 70% YTD.

Consensus EPS growth estimates have decreased since 2012 for #Taiwan

Innolux is the third largest panel (LCD, OLED, etc.) manufacturer in the world. Analysts expect the company to post a loss in 2016 due to weak demand.

Consensus Target Prices: Taiwan

The target price expected return over the next 12 months is at 7% vs 4% in August. Analysts seem to have turned more positive soon after TAIEX’s 5% gain in the past three months.

Among companies with the highest estimated upside, PharmaEssentia’s drug P1101, used to treat a rare blood disorder called Polycythemia Vera, is expected to hit the market in 2017-2018 and drive earnings.

The target price expected return over the next 1yr for #Taiwan is at 7% vs 4% in Aug

The four companies with the lowest expected return are in the information technology sector. Keep in mind though that information technology accounts for 46% of the total market capitalization in Taiwan.


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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.

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About the Author

Dr. Andrew Stotz, CFA
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.