PENTA (7160) - Stock With Momentum: Pentamaster Corp Bhd

This article first appeared in The Edge Financial Daily, on June 17, 2016.

Pentamaster Corp Bhd (+ve)

SHARES in Pentamaster Corp Bhd (fundamental: 3/3, valuation: 1.5/3) surged by roughly 15% this month alone, with yesterday’s closing price of 80 sen its highest since November last year. Even so, its trailing 12-month price-earnings ratio stood at just 8.6 times, which was lower than Elsoft Research Bhd’s 12.59 times.

Both technology companies, which provide automated testing solutions for light-emitting diodes, have been embroiled in a legal tussle since March this year. Pentamaster subsidiary Pentamaster Instrumentation Sdn Bhd’s patent infringement suit against QAV Technologies Sdn Bhd had Elsoft and the latter’s subsidiary AGS Automation (M) Sdn Bhd added as second and third defendants.

Pentamaster’s net profit for its first quarter ended March 31, 2016 (1QFY16) jumped by 81% to RM3.17 million, thanks to higher sales from its automated equipment operating and automated manufacturing solution segments.

This is the first time Pentamaster triggered our algorithm momentum this year, and the sixth time overall. Yesterday’s trading volume of 6.5 million shares was over four times the 200-day average.
PENTA (7160) - Stock With Momentum: Pentamaster Corp Bhd