Stock With Momentum: Elk-Desa Resources

This article first appeared in The Edge Financial Daily, on August 14, 2018.
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Elk-Desa Resources Bhd (-ve)

TRADING of shares in Elk-Desa Resources Bhd (fundamental: 2.3/3, valuation: 2.6/3) triggered our stocks with momentum algorithm yesterday for the first time this year.

The stock closed down two sen or 1.67% to RM1.18, with 626,600 shares done versus the counter’s 200-day average of 70,369 shares.

On Aug 9, the group in a statement said it is confident that it can continue to sustain its robust growth momentum in the small value financing segment which is underserved.

It intends to grow its hirer base in a sustainable manner without compromising on asset quality, noting over the last five years it had grown at a compounded annual growth rate of 15%.

It also noted its management has remained vigilant on risk management and asset recovery, and that it had lowered its non-performing loan ratio to 1% as at March 31 from 1.2% a year ago and 2.2% five years ago.

Elk-Desa is currently trading at 0.85 times its net book value.