HOMERIZ (5160) : Stocks With Momentum: Homeritz Corp
Homeritz, a manufacturer of upholstered home furniture, was previously highlighted as Insider Asia’s Stock of the Day on November 20 at 80 sen.
After a slight decline following the subsequent broad market sell-off, the stock has been on an uptrend again since mid-December, accompanied by rising volume, and closed at 86 sen on Wednesday.
A net exporter with products exported to over 40 countries including Asia, Australia, Europe and the US, Homeritz offers investors exposure to the strengthening US dollar (USD) with some 97% of its trade receivables denominated in USD.
Revenue for the company has grown from RM89.8 million in FY Aug 2011 to RM112.9 million in FY2013. In the same period, net profit increased an outsized 40% from RM10.8 million to RM15.1 million while EBITDA margins expanded from 15.9% to 20% due to economies of scale, increased productivity and efficiency.
For FY2014, the company posted revenue of RM127.2 million, boosted by recovery in demand from its key export markets and the strengthening USD. Net profit was RM20.2 million, a significant 33.9% increase from the previous year.
Homeritz’s valuations are fairly attractive. The stock trades at a price to book ratio of 1.85 times with a trailing 12-month P/E ratio of only 8.5 times. Return on equity (ROE) is high at 24.5%. It has a strong balance sheet with net cash of RM49.3 million, equivalent to 24.6 sen per share or 28.6% of its share price.
Last but not least, Homeritz offers good yields. The company has a minimum 40% dividend payout policy. For FY2014, Homeritz has proposed a final dividend of 3.1 sen. This brings total dividends for the financial year to 5.1 sen per share — up from 3.75 sen in FY2013 — or about 50% of net profit. This earns shareholders a substantially higher than market average net dividend yield of 5.9%.
http://www.theedgemarkets.com
Homeritz, a manufacturer of upholstered home furniture, was previously highlighted as Insider Asia’s Stock of the Day on November 20 at 80 sen.
After a slight decline following the subsequent broad market sell-off, the stock has been on an uptrend again since mid-December, accompanied by rising volume, and closed at 86 sen on Wednesday.
A net exporter with products exported to over 40 countries including Asia, Australia, Europe and the US, Homeritz offers investors exposure to the strengthening US dollar (USD) with some 97% of its trade receivables denominated in USD.
Revenue for the company has grown from RM89.8 million in FY Aug 2011 to RM112.9 million in FY2013. In the same period, net profit increased an outsized 40% from RM10.8 million to RM15.1 million while EBITDA margins expanded from 15.9% to 20% due to economies of scale, increased productivity and efficiency.
For FY2014, the company posted revenue of RM127.2 million, boosted by recovery in demand from its key export markets and the strengthening USD. Net profit was RM20.2 million, a significant 33.9% increase from the previous year.
Homeritz’s valuations are fairly attractive. The stock trades at a price to book ratio of 1.85 times with a trailing 12-month P/E ratio of only 8.5 times. Return on equity (ROE) is high at 24.5%. It has a strong balance sheet with net cash of RM49.3 million, equivalent to 24.6 sen per share or 28.6% of its share price.
Last but not least, Homeritz offers good yields. The company has a minimum 40% dividend payout policy. For FY2014, Homeritz has proposed a final dividend of 3.1 sen. This brings total dividends for the financial year to 5.1 sen per share — up from 3.75 sen in FY2013 — or about 50% of net profit. This earns shareholders a substantially higher than market average net dividend yield of 5.9%.
http://www.theedgemarkets.com