Stock With Momentum: Elsoft Research

This article first appeared in The Edge Financial Daily, on August 16, 2018.
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Elsoft Research Bhd (+ve)

TRADING of the shares in Elsoft Research Bhd (fundamental: 3/3, valuation: 1.5/3) triggered our momentum algorithm yesterday for the second time this year. The counter saw 2.45 million shares traded compared to its 200-day average of 140,553.

For the group’s first quarter ended March 31, 2018 (1QFY18), Elsoft posted an increase in profit of 46.3% to RM8.09 million from RM5.53 million a year ago. Revenue increased 11.8% to RM16.49 million from RM14.75 million the previous year. Elsoft said the higher revenue recorded was due to strong demand from smart devices industry for current quarter under review. The increase of net profit was mainly due to increase in revenue, lower administrative expenses and positive contribution from associate companies in aggregate.

The stock rose 23 sen or 8.43% to close at RM2.96 yesterday, leaving it with a market capitalisation of RM817.69 million.

Elsoft was last traded at 7.05 times its book value.