Stock With Momentum: Dancomech Holdings

This article first appeared in The Edge Financial Daily, on March 13, 2019.
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Dancomech Holdings Bhd (-ve)

TRADING of shares in Dancomech Holdings Bhd (fundamental: 2.55/3, valuation: 1.4/3) triggered our momentum algorithm for the second time this year; it was on Jan 8 previously. The stock went up six sen or 9.84% yesterday to close at 67 sen, its highest level since June 2017.

At the closing bell, Dancomech — now valued at RM199.66 million — recorded a total trading volume of 10.96 million shares, sharply higher compared with its 200-day average of 940,370 shares.

The family-run business recently reported an annual net profit of RM14.99 million for the financial year ended Dec 31, 2018 (FY18), up nearly 40% from RM10.74 million for FY17, in tandem with stronger revenue.

Annual revenue grew 25.4% to RM79.92 million, from RM63.75 million before, due to higher demand from the palm oil industry in both domestic and overseas markets. Dancomech is seeking potential opportunities for acquisitions and collaborations to enhance future sales and profits.