Stock With Momentum: Opcom Holdings Bhd

This article first appeared in The Edge Financial Daily, on July 18, 2018.
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Opcom Holdings Bhd (+ve)
TRADING in the shares of Opcom Holdings Bhd (fundamental: 1.8/3, valuation: 0.8/3) triggered our proprietary momentum algorithm yesterday for the fourth time this year.

The stock closed four sen or 5.20% higher at 91 sen, with 27.29 million shares, exceeding its 200-day average volume of 3.33 million shares.

The fibre optic company’s net profit soared to RM6.23 million in the fourth financial quarter ended March 31, 2018 (4QFY18) from RM1.6 million a year ago.

Quarterly revenue also jumped to RM31.44 million from RM22.416 million in 4QFY17, mainly due to an increase in the supply of thixotropic gel and fibre optic cables.

Going forward, Opcom is cautiously optimistic as the group’s profit margin continues to be under pressure from increasing raw material cost, and limitations in passing increased cost to its customers in the short term.

At current share price, Opcom is trading at 1.66 times its book value, with a market capitalisation of RM145.93 million.