GADANG (9261) - Stock With Momentum: Gadang Holdings

This article first appeared in The Edge Financial Daily, on June 9, 2016.

Gadang Holdings Bhd(-ve)

SHARES in Gadang Holdings Bhd (fundamental: 1.9/3, valuation: 1.8/3) triggered our momentum algorithm for the second consecutive day yesterday. The counter gained one sen or 0.47% to close at RM2.16 yesterday.

Its trading volume swelled to 3.22 million shares traded, compared to its 200-day average volume of 1.68 million shares.

Gadang is mainly engaged in civil engineering works and property development.

The company saw its net profit jump 55.28% to RM25.11 million in the third financial quarter ended Feb 29, 2016 (3QFY16) from RM16.17 million a year ago, due to improved profit margins from construction activities and higher contributions from the property division. Revenue grew 3.67% to RM175.92 million from RM169.69 million.

For nine months of FY16, Gadang’s net profit surged 86% to RM63.69 million from RM34.22 million a year earlier. Revenue grew 2.31% to RM427.28 million from RM417.64 million.

Gadang is trading at a trailing price-earnings ratio of 6.3 times and is 1.11 times its book value.

GADANG (9261) - Stock With Momentum: Gadang Holdings