Stock With Momentum: VELESTO Energy

This article first appeared in The Edge Financial Daily, on July 18, 2019.
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VELESTO Energy Bhd (+ve)

VELESTO Energy Bhd (fundamental: 1.25/3, valuation: 0.9/3) made it into our Stocks with Momentum list yesterday for the fourth time this year.

The counter closed one sen or 3.03% lower at 32 sen yesterday, with 67.78 million shares traded, higher than its 200-day average volume of 18.55 million shares.

Velesto fell into a net loss of RM22.22 million in the first quarter ended March 31, 2019 (1QFY19), from a net profit of RM5.02 million in the same period last year, despite revenue climbing 4.32% to RM127.03 million from RM121.76 million. The company attributed the loss to a net foreign exchange gain of RM18.2 million recorded in 1QFY18, which was the result of an early settlement of a revolving credit. Going forward, the board expects an improved financial performance for 2019, based on the present outlook of higher utilisation and time charter rates for the group’s assets in the second half of the year.

At the current share price, Velesto is trading at 0.96 times its book value.