ANCOMLB (0048) ANCOM LOGISTICS BHD TRANSPORTATION INDEX RISING STRONG !!! THIS STOCK SHALL BE A RISING STAR !!!
TRANSPORTATION INDEX RISING STRONG !!! THIS STOCK SHALL BE A RISING STAR !!!
Hello to all readers out there. The TRANSPORTATION sector has made a strong V-shape recovery in the past 3 months. Many transportation stocks have rallied strongly.
Having said the above, the stock which I'd like to talk about today is ANCOM LOGISTICS BERHAD (ANCOMLB - Stock Code 0048, ACE Market, Transportation & Logistics)
BASIC INFORMATION ABOUT ANCOMLB
ANCOMLB core business thru its 2 subsidiaries below:
i) ANCOM-CHEMQUEST TERMINALS SDN BHD - provides bulk storage facilities for liquid chemicals
ii) PENGANGKUTAN COGENT SDN BHD - owns and operates a fleet of 90 ISO tankers and road tankers to provide cross border bulk liquid chemicals land transportation
Both the above services are catering to dangerous goods management.
Market Capitalization : RM 40.23 million
Shares Float : 473.29 million
Website : http://www.ancomlogistics.com.my/
1. TRANSPORTATION & LOGISTICS INDEX - STRONG V-SHAPE RECOVERY
Refer below TRANSPORTATION & LOGISTICS index in KLCI. As we can see the index hit bottom of 464 in March 2020 and recently closed at 725 which is nearly a full recovery of the index before the country was hit by COVID19 pandemic.
Also, with all sectors (nearly all) opening for business again, the demand for ANCOMLB services will surely be on the rise.
2. REVENUE & NET PROFIT IMPROVEMENT INDICATING GOOD PROSPECTS AHEAD
Refer to QR summary of ANCOMLB, as we can see the revenued has improved the past 2 QR, from RM 7.8 mil to RM 7.9 mil to RM 8.3 mil.
Also, they turned profit the most recent quarter at RM 255k as compared to loss in previous quarter and also last year same quarter.
This shows that the company is starting to manage its costs well, and be consistent in making a quarterly profit for its shareholders.
3. MAJOR SHAREHOLDER IS ANCOM - UNDER DATO' SIEW KA WEI WITH 214.5 MILLION SHARES OR 45.3%
Refer latest substantial shareholder list which we can see Dato' Siew Ka Wei as major shareholder which also links to ANCOM.
Since January 2019, there has been no major disposal of ANCOMLB shares by ANCOM, indicating a longer term investment in this company.
Should we take out this portion of the float, then the public is only left with 54.7% total float shares of ANCOMLB.
Also, we should note that ANCOM has made a big rebound from its low of 38c in March 2020, to a latest closing price of 76c.
Based on the total float of ANCOM, this means that ANCOM had gained a total market capitalization of 100% since its lows or +RM 91.523 million market cap gain. This gain, should also be spilling over to ANCOMLB side.
4. TECHNICAL ANALYSIS - BREAKOUT OF RESISTANCE AT 9 CENTS, WITH SIGNIFICANT VOLUME INCREASE
Refer below the basic price and volume chart with key EMAs for ANCOMLB daily chart:
A few observations on the daily chart chart:
i. Refer Circle 1, where we see that the short term EMA14, had crossed above all the longer term EMAs, indicating that there is bullishness ahead
ii. Refer Circle 2 where significant volume trading is entering this counter for the first day since last few weeks, indicating renewed interest in this stock
iii. Refer Circle 3, priced had closed above the recent resistance of 9c, indicating a fresh breakout heading towards next resistance of 11c and 13c
Considering all the above, I opine that current price for ANCOMLB is attractive due to below:
i) Transportation index making a strong V-shape recovery
ii) Businesses reopening, causing surge in demand for ANCOMLB services
iii) Revenue and net profit improvement in the past 2 quarters
iv) Total effective float of 54.7% ONLY considering major shareholder Dato' Siew Ka Wei still holding on to his shares
v) Gain in ANCOM should also be reflected in ANCOMLB share price
vi) Chart showing breakout above 9c resistance, with significant volume increase
LET’S SEE HOW THE SHARE PRICE MOVEMENT IN THE NEAR FUTURE FORBEARING ANY GOOD CORPORATE NEWS.
Disclaimer : The above opinion is never intended to be a BUY CALL whatsoever. I am sharing my observations ONLY based on fundamental; past history; current trading pattern; charts etc. Please make your own informed decision before buying this share or whatever share for that matter.