Dear Valued Readers and Community of Experienced Investors,
Kindly allow me to present my findings on this valued stock, KSSC BERHAD.
KSSC BERHAD is a company primarily involved in the manufacturing and processing of secondary stainless steel products, as well as trading of industrial hardware. Its manufactured secondary stainless steel products include stainless steel tubes and pipes, steel industrial fasteners, rigging accessories and components. Meanwhile, Its industrial hardware products include marine hardware and consumables, as well as bolts and nuts. This stock was listed on Bursa Malaysia in 2011 with an IPO price of RM 0.57.
Key things to note about this stock is that :
- This penny stock has been a profit making company for each and every single year since its IPO in 2011. Based on the historical quarterly earnings, This penny stock recorded a profit in 26/27 of its Quarterly Reports History - A Rare occasion for Penny Stocks at this price. Most penny stocks in our market do not achieve such consistency in earnings as seen in KSSC.
- What is more important at this rate is the ability of this stock to achieve strong growth. - As you can see in the previous financial year, this stock made a remarkable turnaround and doubled its earnings in FY 2016 as compared to FY 2015.
- Current EPS for this stock in the last 4 Quarters stands at 5.44 sens. Net Tangible Asset (NTA) for this stock is RM 0.81, of which is relatively higher compared to its current price of only RM 0.545. This stock also has recorded strong positive net cash flows from operations in the past two financial years. This stock is only valued with a Total Market Cap of RM 52.32 million and SPARK believes that it deserves better valuations based on its strong fundamentals.
- As seen in the future prospects of the previous quarterly report, the group plans to enhance its marketing strategy through expansion of the Engineering Works Segment and increase the Group products offering to increase revenue.
- On top of that, this stock also paid out dividends each year since listing. This stock recorded a 2.75% yield in FY 2016. Based on the 2016 Annual Report, this group has stated that it has adopted a dividend policy of 40% of the distributable profit since listing. If growth continues to fuel the earnings of this stock, shareholders would be the ones benefiting from their dividend policy.
Aside from its fundamentals, Let me present to you the Great Chart of KSSC.
Chartwise, this stock is forming a Strong Double Bottom Pattern of which took 6 years to consolidate. Breaking out from this pattern would be huge for this stock. With recent volume and interest slowly picking up, it is about time this stock tested the resistance of this great pattern. Therefore first target and resistance for this stock stands at RM 0.65. Should resistance levels be broken with strong volume, we believe that this stock has upside to climb to a second target of RM 0.83 price vicinity of which is close to its NTA of RM 0.81 in the long run. This stock is suitable for aggresive traders as well as long term investors.
Nevertheless, I strongly encourage investors to further study this stock on their own. I believe the historical fundamentals are in-tact and value beholds within this stock. Buying and selling this stock would be completely at your own risk. As the saying goes, "Caveat Emptor."
Kindly note that this stock has not moved since its IPO in 2011 of which the listing price was RM 0.57. This stock has been sleeping for 6 years and it is about time to wake up this sleeping bull.
Thank you for reading and have a great day ahead.
Best Regards,
Stanley Sim
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DISCLAIMER : Kindly ignore this article or sharing if you have strong conflicting views/disagreement with the author. All investment decisions, risks and liabilities are to be made and borne by the investor who invests themselves. This is not a buy or sell call, but rather, just a sharing of my views and analysis on this stock. I will not be held responsible or liable for any investment decisions made.
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