Stock With Momentum: Johore Tin

This article first appeared in The Edge Financial Daily, on December 14, 2018.
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Johore Tin Bhd (+ve)
TRADING of shares in Johore Tin Bhd (fundamental: 2.50/3, valuation 1.40/3), triggered our momentum algorithm yesterday for the second time this year.

The stock closed 4.5 sen or 4.52% higher at RM1.04, which valued the group at RM308.91 million. It saw 1.9 million shares done, versus its 200-day average volume of 348,209 shares. PublicInvest Research, in a Dec 7 note, wrote that the company’s outlook is encouraging, given the anticipated steady demand for condensed and evaporated milk, and its opportunity for growth in the dairy business through its 40%-owned joint venture, Able Dairies Mexico.

“We understand that the JV (joint venture) will break even immediately at 40% of capacity utilisation, with the initial production taken up by existing customers from Mexico, Central America and US. It expects better margins from the Mexican operation in the absence of import duties and freight costs. The free trade agreement between the US and Mexico will help the JV to penetrate further into the American continent,” the research added.