Stock With Momentum: Comfort Gloves

This article first appeared in The Edge Financial Daily, on August 3, 2018.
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Comfort Gloves Bhd (-ve)

TRADING of shares in Comfort Gloves Bhd (fundamental: 2.1/3, valuation: 0.2/3) triggered our momentum algorithm yesterday as its share price rose two sen or 2.2% to 93 sen with about 5.27 million shares traded — higher than its 200-day average of 3.68 million.

The glove maker recently announced that it is buying 38.92 acres (15.75ha) of leasehold land in Daerah Kinta, Perak, from Nestle (M) Bhd for RM13.22 million cash. It noted that it will finance the acquisition via internally generated funds and that the proposed acquisition is in line with its future expansion plans.

Comfort Gloves also saw its earnings for its first quarter ended April 30, 2018 (1QFY19) drop by 27.6% to RM7.35 million from RM10.1 million in 1QFY18. This was despite revenue rising 13.7% to RM106.6 million from RM93.7 million during the same period.

At the current level, the counter is trading at a trailing price-earnings ratio of 15.6 times, with a dividend yield of about 1.08%.