DBS Vickers Securities said valuations in small mid-cap firms were normalising after a recent rally in markets and it stayed upbeat on oil and gas stocks on persistently high oil prices and earnings upgrades.
The broker's stock picks include Ezion Holdings for high earnings visibility and strong execution. It highlighted CH Offshore and ASL Marine Holdings as turnaround plays, likely to benefit from the improving charter market and more orders for offshore support vessels.
“As we are no longer in a 'rising tide market’, the only stocks to see a further uplift will be those expecting a turn around in fortunes, sustained profit growth or upside to current forecasts,” it said.
“Our turnaround picks are Venture Corp for a continuation of the tech rebound, China Minzhong Food Corp for better harvest near term, and Tiger Airways Holdings for its stronger operational efficiencies,” DBS said.
It also sees potential earnings upside for Sound Global, Luye Pharma Group, ARA and Biosensors International Group.
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