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Thursday, June 12, 2014

Kamdar: Poised for Breakout?


Kamdar (closed at RM0.66 yesterday) has proposed a 4-sen first & final dividend wuth the entitlement date fixed on July 7, 2014. It paid out dividend of 3 sen in 2013and 4 sen in 2012. This gives Kamdar, a cloth trader, an attractive dividend yield of 6%.

Kamdar's EPS for the last 4 quarters amounted to 8.05 sen. It has a NTA of RM1.12. This means the stock has a trailing PE of 8.2 times and a PB of 0.6 time.

Kamdar's financial position is deemed satisfactory as at 31/3/2014 with current ratio at 2.6 times and gearing ratio at 0.44 time.

A quick look at Chart 1 shows that Kamdar has a good profit track record. Its profit margin has also been rising steadily.


Chart 1: Kamdar's last 13 years P&L, Cashflow & Profit Margin (Source: Nexttrade, EquitiesTracker)

What is interesting is that the stock has just broken above its strong horizontal resistance at RM0.65, albeit on very thin volume. Its next resistance is at RM0.90.


Chart 2: Kamdar's monthly chart as at June 11, 2014 (Source: Chartnexus.com)


Chart 3: Kamdar's weekly chart as at June 11, 2014 (Source: Chartnexus.com)


Based on technical breakout, satisfactory financial performance & position and reasonably attractive valuation, Kamdar could be a good medium-term investment.



Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Kamdar.

7 comments:

lai said...

well done alex!

a lot stock has went up. hard to find any value. maybe JCY??

btw, wht do you think of this stock call OCNCASH??

Thanks!

clearwater said...

I like JCY at current levels 71.5 sen with improving profits and another quarterly dividend pending. Fairly strong balance sheet. Selling at a discount to other HDD manufacturers. Investors probably still wary of its volatile profitability and share performance.

Alex Lu said...

Hi lai & clearwater,

JCY's fundamentals are improving. Technically speaking, it should find support at RM0.70. If it breaks that support, it may drop to RM0.60. That will be a very strong support and an ideal entry level if anyone who wants to get into the stock.

Alex Lu said...

Hi lai

Oceancash looks interesting. Financial performance has improved in the past 2-3 years. This is due to increased op. profit from felts and hygiene division.

Chartwise, the stock broke above the upward channel at RM0.20 in early 2014. However, it is now consolidating in a head-and-shoulder formation with neckline at RM0.25-0.26. It tested & rebounded off the neckline 3 days ago. It has just broken above the medium-term downtrend line at RM0.28-0285, setting the stage for a revisit to the recent high of RM0.34.

Andres Kwan said...

Alex, hw ur thought for Sealink. Could it get any beneficial from new oil well at east malaysia?

Alex Lu said...

Hi Andres Kwan

Sealink may benefit from a pick-up in activities in O&G sector. I am not sure how much of benefit it would derive from increased activities in that sector.

Its trailing PE is high at 22 times while its PB is moderate at 0.6 time.

However, the stock's technical outlook is looking bullish. It has just broken above its long-term downtrend line at RM0.53-0.55. If it can sustain above this breakout level, it may continue to rise.

lai said...

Thanks Alex for your feedback. Will be watching more Capital TV now.