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Monday, November 22, 2010

Oil and gas - KNM gets momentum

Would you buy a stock with a potential to go 5 fold ups? Taking a historical approach, KNM is trading at 40 sen. The all time high is over $2.40 during the 2007 oil grab.

KNM Group Berhad is engaged in investment holding and the provision of management services. The Company and its subsidiaries are engaged in the designing and manufacturing of process equipment for the oil and gas, petrochemicals, minerals processing, desalination, renewable energy, environmental and power industries. Its products and services include process gas waste heat recovery systems, membrane technology systems, sour gas and sulfur technology, compression systems, fired and heat recovery boilers, quench coolers, scraped surface exchangers, process and pressure vessels, heat transfer equipment, storage facilities and others. Its direct subsidiaries are KNM Process Systems Sdn. Bhd., KNM International Sdn. Bhd., KNM Capital Sdn. Bhd., KNM Management Services Sdn. Bhd., KNM Renewable Energy Sdn. Bhd., KNM Capital Labuan Limited and KNM Services (Singapore) Pte. Ltd. In July 2009, the Company, through its wholly owned subsidiary, acquired Compart Technology GmbH & Co.
  Wright Quality Rating: CBA2

Historical chart wise, the price is at the bottom of an upside down bell curve.

KNM has just signed a new contract with Lukoil Uzbekistan. Total job wins exceed RM2 billion YTD.
Buy suggestions because:
1) Fundamentally KNM has been improving.
2) Inexpensive price - this is one of the methods of risk management.
3) Oil and gas going upwards again.
4) Last few laggards that haven't pick up much after this years double rally. Most top market capitalised companies have gained on average 40-50%.

Will be exploring other choice picks that seems to have been left out by investors and speculators. Finding the gems is a lifelong quest.

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