HOVID BHD (-ve)
HOVID (Fundamental: 2.1/3, Valuation: 0.5/3), an Ipoh-based manufacturer of generic pharmaceutical products, was first picked by our momentum algorithm on February 9 at 43 sen. Last Friday, the stock rose 2.9% to close at 53.5 sen on heavy volume. 

For 9MFYJune2015, revenue increased 7.5% to RM145.7 million while net profit surged 22.6% to RM16.4 million, boosted by forex gains of RM4.2 million and a gain of RM1.4 million from the disposal of its 51% stake in Biodeal Pharmaceuticals Private Limited. 

Hovid derives about 60% of its sales from export markets, mainly Asia. Future earnings for the company will be driven by capacity expansion. Phase 1 of its new manufacturing plant is expected to be up and running by mid-2015 and would increase tablet and capsule capacity by 30%. By early-2016, tablet and capsule capacity would double from current levels.

The stock trades at a trailing 12-month P/E of 19.95 times and 2.42 times book. 

This article first appeared in The Edge Financial Daily, on June 15, 2015.