Mudajaya and KNM elevating silently others are in the limelight

Recently the ETP announcements helped propel stocks that are being directly awarded with contracts. Namely Gamuda, MMC Corp, Dialog, SapuraCrest.

At the same time some stocks are moving silently behind the scenes.

Mudajaya up from RM4.16 to RM5.10 today.
KNM up from RM1.80 (adjusted) to RM3.20 today.

KNM momentum - getting many projects year end 2010

Looking back at my previous write-up on KNM, 28th Sept, (see my previous writeup on KNM by click the KNM label on the right bar) it has thus gained a very powerful momentum almost right after.

19th Nov - KNM gets RM680mil job in Uzbekistan.
25th Nov - KNM profit up 75.7% for the 3 months ended 30th Sept.
13th Dec - KNM join venture with Petrosab Logistik to target oil and gas projects in Sabah.
22nd Dec - KNM secures RM2bil EPCC (engineering, procurement, construction, commissioning) biomass and waste recycling contract in UK with Peterborough Renewable Energy for 4 years.

Look at the chart below.

NOTE: KNM shares has since been consolidated 4 into 1. My previous article was based on the price of 40 sen when I was writing the article and when it was not consolidated. The chart shows consolidated prices and retrospectively adjusted as well. Meaning the chart shows as 40sen x 4 = RM 1.60

So from that low point of RM1.60, KNM has risen to over RM2.90. Hope you have bought during that period and made your year-end Christmas bonus!

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.

Buying in dips - AirAsia Genting Singapore Kossan Scomi KNM

Today's dips could be a chance to buy-and-accumulate before more funds are released and the imminent QE2 money coming into Malaysia and Singapore markets. Both these markets attained 20% gains this year compared to over 40% for Thailand and Indonesia. Therefore it is safe to suggest foreign funds will have a higher likelihood to invest in equities in Malaysia and Singapore.

Some choice picks:
Singapore - Genting Singapore (casino and integrated resort), China Oilfield, China Aviation Oil, (start to accumulate oil and gas related stocks), Golden Agri (palm oil), Ezra (oil and gas), SATS, SMRT (just given out dividend and prices pressed down).
Malaysia - AirAsia (low cost carrier), Kossan, Hartalega, Supermax (rubber industry, rubber gloves), Scomi, KNM (industrial engineering) both below 50 sens.

KNM rebounding to 0.60 target price

KNM is one of the most actively traded stock in Malaysia. The unfortunate circumstances surrounding the failed privatisation process pushed the price from 0.80 gradually to almost 0.38 for the past 6 months or so. That's a 50% down.
This week the price has been hovering higher at 0.44 to 0.46. With positive news stemming from a stronger ringgit, this well-traded stock has a higher possibility to rebound to fair value of 0.60 and possibly to trade northwards to 1.00 by year end.

Some basic information:
KNM Group Berhad (KNM Group) is an investment holding company based in Malaysia. The company designs, manufactures, assembles, and commissions processing units and processing equipment for the oil and gas, petrochemical, and mineral processing industries through its group companies. The group also offers industrial and power plant services including pressure vessel services, and ball valve and valve services, among others. KNM group operates through 27 operating units and engineering centers in 14 countries. KNM Group has its presence in Malaysia, China, India, Brunei Darussalam, Indonesia, Australia, the UK, the UAE, Canada, Brazil, and Italy. The group also exports its products to various overseas destinations. KNM Group is headquartered at Seri Kembangan in Malaysia.