Stock With Momentum: Can-One Bhd

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This article first appeared in The Edge Financial Daily, on October 20, 2015.

Can-One Bhd (-ve)


Can-One (Fundamental: 1.1/3, Valuation: 2.4/3) triggered our momentum algorithm for the second time this month. The stock rose 4.2% to close at RM2.72 yesterday, as trading volume surged more than 19-fold to 3.3 million shares.

Notably, major shareholder, Teh Khoy Gen, has been disposing his shares in the open market, cutting his stake to 20.27% from 20.69% on June 12. Teh became a substantial shareholder after Can-One acquired his 20% stake in F&B Nutrition Sdn Bhd for RM112.9 million. The acquisition was fully satisfied by the issuance of 39.75 million new shares in Can-One at RM2.84 per share. 

To recap, Can-One manufactures tin cans, plastic jerry cans, bag-in-box and dairy and non-dairy products. 

For 1H2015, net profit jumped 62.4% y-y to RM38.7 million, despite a 4.1% drop in revenue to RM407.8 million, attributed to stronger USD and higher contribution from Kian Joo. 

The stock trades at a low trailing 12-month P/E of 6.4 times and 0.85 times book.