Stock With Momentum: Turbo-Mech

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BASED in Singapore, Turbo-Mech (Fundamental: 1.95/3, Valuation: 2.4/0) is a regional distributor of rotating equipment such as pumps, compressor and turbines for the oil, gas and petrochemical industry. 

Its share price has risen by 44.6% since reaching a low of 92 sen on January 9, tracking the recovery of crude oil prices. The stock ended 8.1% higher at RM1.33 yesterday. 

On March 25, 2015, Turbo exercised an option to purchase a property in Joo Koon Circle, Singapore. 

The acquisition, at RM21.35 million, is to expand its workshop capacity.

For 2014, net profit surged 45.3% y-o-y to RM14.3 million on the back of a 23% increase in revenue to RM47.2 million, mainly due to higher contribution from Singapore operation. 

The stock trades at a trailing 12-month P/E of 9.3 times and 1.54 times book. Dividends totalled 5 sen per share for 2014 (ex-entitlement on June 5), giving a net yield of 4.1%.


This article first appeared in The Edge Financial Daily, on May 19, 2015.