Stock With Momentum: London Biscuits Bhd

This article first appeared in The Edge Financial Daily, on December 14, 2018.
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London Biscuits Bhd (+ve)
TRADING of shares in London Biscuits Bhd (fundamental: 0.25/3, valuation 1.7/3), triggered our momentum algorithm yesterday for the eighth time this year.

The stock slid one sen or 1.56% to close at 63 sen, after 4.55 million shares were done, versus its 200-day average volume of 1.35 million shares.

On Nov 30, the confectionery maker reported a net profit of RM6.66 million for the fourth quarter ended Sept 30, 2018 (4QFY18) on a revenue of RM98.13 million.

PublicInvest Research, in upgrading its target price for London Biscuits to 71 sen in a note dated Dec 3, said the group’s latest quarterly result beats its expectation, primarily due to lower materials costs and better margins from its product mix.

It also raised its earnings estimate for the group’s FY19 and FY20 by an average of 23%, on expectations of steady revenue growth in tandem with higher utilisation and smoother operations from recent upgrading of production facilities.