On Friday, Naim Holdings Bhd (NAIM:KLS) closed at 0.64, 91.04% above the 52 week low of 0.335 set on Mar 23, 2020.

Please see the latest analysis of NAIM yield here:

https://malaysiainvestment88.blogspot.com/2021/01/latest-klse-best-dividend-stock-updated.html

Why is there a doubling of the stock price in Jul compared to June? The company has property development, construction and investments in oil & gas. If you look at the Bursa property companyies, they went through Covid-19 but seems to be turning around as per Will the Malaysian Property industry turn around by 2024?. The oil & gas sector has been experiecing good prices but the Bursa Malaysia oil & gas services companies have yet to benefit from this. So why did Naim stock doubled?

For the "tik-tok" generation who don't read much

We have been told that to minimize risk, we should have a portfolio of stocks. Does it mean that we can have any stocks (assuming that they are fundamentally sound and cheap)

Take the example of Bursa construction/property company Naim and Bursa oil and gas company Dayang. You can see from the revenue trend chart that there is not much correlation between them. Actually there was a negative 10% correlation.

But then Naim owns about 25% of Dayang and probably influened its decision making. So are they uncorrelated stocks?

From a statistics perspective, as long as 2 stocks are not 100% correlated, having them in a portfolio will result in a lower volatility compared to their individual volatility. If you looking for less volatility, then having them both is better than just investing in one.

Of course, the big picture question is if part of the performance of Naim is tied to the performance of Dayang, would it be better to look for another oil and gas stock?

Bursa Malaysia NAIM Holdings Bhd  is an integrated player focused on the property development, construction, and oil & gas sectors. Despite its diversification, NAIM's performance over the past 12 years has been poor with declining revenue and volatile, declining PAT.

I attributed its poor performance to the soft Malaysian property and construction sectors as well as the problems it faced with its investment in Dayang, an oilfield services company. I do not expect the property and construction sectors to be soft forever.

Despite this, NAIM maintains a strong financial position with significant cash reserves and low debt. The company's market valuation suggests a margin of safety.

So when the soft property and construction sector recovers, I would expect Naim’s performance to follow suit. Do you have the patience to wait for this?