Stock With Momentum: Opcom Holdings Bhd

This article first appeared in The Edge Financial Daily, on July 23, 2018.
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Opcom Holdings Bhd(-ve)
TRADING of shares in Opcom Holdings Bhd (fundamental: 1.8/3, valuation: 0.8/3) triggered our momentum algorithm last Friday for the fifth time this year. The company saw 25.27 million shares traded, exceeding the counter’s 200-day average of 3,529,615.5.

The stock rose 3.5 sen or 3.87% to close at 94 sen, leaving it with a market capitalisation of RM153.19 million. Opcom Holdings was last traded at 1.72 times its book value.

The fibre optic company’s net profit soared to RM6.23 million in the fourth financial quarter ended March 31, 2018 (4QFY18) from RM1.6 million a year ago. Quarterly revenue also jumped to RM31.44 million from RM22.416 million in 4QFY17, mainly due to an increase in the supply of thixotropic gel and fibre optic cables.

Going forward, Opcom is cautiously optimistic as the group’s profit margin continues to be under pressure from increasing raw-material cost, and limitations in passing increased cost to its customers in the short term.