Stock With Momentum: Straits Inter Logistics

This article first appeared in The Edge Financial Daily, on July 12, 2017.
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Straits Inter Logistics Bhd (-ve)
SHARES in Straits Inter Logistics Bhd (fundamental: 1.95/3, valuation: 0/3), formerly known as Raya International Bhd, which mainly manufactures and distributes air and water filters, triggered our proprietary momentum algorithm yesterday for the second time this month. The stock dropped 1.5 sen or 5.17% at 27.5 sen with 7.08 million shares traded, exceeding its 200-day average volume of 688,000 shares.

In the first quarter ended March 31, 2017 (1QFY17), Straits posted a net profit of RM548,000 from a net loss of RM1,000 a year earlier while earnings per share stood at 0.33 sen. The group attributed the increase in earnings mainly to the contribution by an unrealised foreign exchange gain of RM95,000 and there was no similar bad debt and inventory written off in 1QFY17. Revenue grew 134% to RM23.1 million from RM9.8 million in 1QFY16 mainly on increased contribution from the oil bunkering stream and trading in oil products. The group has managed to increase its oil bunkering revenue for 1QFY17 to RM23.1 million compared with RM9.83 million recorded in 1QFY16.

Going forward, the company expects to expand its asset base, strengthen its operational capabilities and broaden its geographical coverage to capture the growth opportunities in the oil bunkering industry in Malaysia.

At the current share price, Straits is trading at 3.82 times its book value.