Stock With Momentum: Dominant Enterprise

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Dominant Enterprise Bhd (-ve)

DOMINANT (Fundamental: 1/3, Valuation: 1.8/3), a manufacturer and distributor of engineered wood mouldings and laminated wood panel products, first triggered our momentum alert on March 16 at RM1.28. 

The stock has since risen by 43% to close at a 5-year high of RM1.83 yesterday. 

Part of this could be due to its latest 4QFYMar2015 earnings results. For FY2015, revenue rose 14.6% to RM547.6 million, thanks to market share expansion and penetration into new markets. Excluding one-off items, normalised net profit increased 11% to RM18.2 million. The company proposed a final dividend of 1 sen, bringing total dividend for FY2015 to 5 sen per share, up from 4 sen in FY2014.

Dominant also proposed a 1-for-5 bonus issue of new shares and 1-for-3 bonus issue of warrants. The proposals are expected to be completed by 3Q2015.  

The stock trades at a trailing 12-month P/E of 10.48 times and 1.06 times book.

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This article first appeared in The Edge Financial Daily, on June 10, 2015.