Stock With Momentum: Gamuda

This article first appeared in The Edge Financial Daily, on June 25, 2019.
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Gamuda Bhd (-ve)

TRADING of shares in Gamuda Bhd (fundamental: 0.8/3, valuation: 1.4/3) triggered our momentum algorithm yesterday for the second time this year.

The stock closed 26 sen or 6.79% lower to RM3.57 yesterday, with 33.62 million shares done, compared with its average 8.82 million shares recorded in the past 200 days.

Last Friday, the group said the Minister of Finance Inc had offered to take over the four toll highways owned by Gamuda and Lingkaran Trans Kota Holdings Bhd (Litrak Holdings) for RM4.5 billion cash. The subsidiaries are 70%-owned unit Kesas Holdings Bhd, 52%-owned associate Sistem Penyuraian Trafik KL Barat Holdings Sdn Bhd, 44%-owned public-listed Litrak Holdings, and 50%-owned joint venture Projek SMART Holdings Sdn Bhd.

Based on Gamuda’s effective interest in these toll highways, the group expects its share to be RM2.36 billion, which is equivalent to 96 sen per share, from the divestments.