There are stocks that are hitting a 52 week-high despite the pandemic.
The strange thing about this COVID-19 crisis is that it has not impacted all industries in the same way.
However, industries providing essential services have continued to operate uninterrupted.
Some companies within these industries have even thrived due to a higher demand for their services.
This difference in economic impact has resulted in a bifurcated stock market.
While some businesses are struggling to book revenue, others are seeing such high demand that their capacity is unable to cope.
It’s indeed an intriguing situation for investors.
Here are three stocks that have recently scaled a year-high. Investors need to figure out if the business can continue to flourish amid this pandemic.
iFAST Corporation Limited (SGX: AIY)
iFAST is a financial technology company that runs a platform for the buying and selling of securities such as unit trusts, equities and bonds.
The group is present in five countries: Singapore, Malaysia, Hong Kong, China and India.
iFAST’s share price recently hit a new 52-week high of S$3.76, up 261% year to date.
The group had just announced its third-quarter 2020 earnings and reported a healthy 35.7% year on year increase in net revenue.
Due to operating leverage, net profit after tax surged 150% year on year to S$6.2 million for the quarter.
Robust record net inflows of S$1.07 billion pushed iFAST’s assets under administration (AUA) to a new all-time high of S$12.59 billion as of 30 September 2020.
More investors are allocating money into iFAST’s equity offerings, bumping up the proportion of AUA contributed by this segment to 11.1%, up from 5.5% a year ago.
Because of its strong performance, the group bumped up its interim dividend by 6.7% from S$0.0075 to S$0.008.
The group has improved the range of depth of its products and services during the quarter, with iFAST Malaysia securing in-principle approval to carry out securities dealing on Bursa Malaysia.
Moving forward, the group is awaiting the results of its digital wholesale bank licence application in Singapore, due to be announced by end-2020.
If iFAST clinches this licence, it could act as a strong catalyst for the future growth of its business.
Venture Corporation Ltd (SGX: V03)
Venture is a global provider of technology solutions, products and services for a variety of industries that span life sciences, healthcare technology and network & communications.
The group manages a portfolio of more than 5,000 products and solutions and employs a total of 12,000 staff worldwide.
Venture reported improved performance for its second quarter of 2020 compared to its first quarter.
Revenue was up 2.9% quarter on quarter while net profit improved by 16.4% over the same period.
Its first-quarter performance was impacted by COVID-19-related lockdowns and temporary factory closures that restricted manufacturing activities.
Business rebounded sharply in May and June once operations were allowed to resume.
In a show of confidence in its prospects, the group upped its interim dividend by 25% from S$0.20 to S$0.25.
Venture’s share price has rebounded strongly from the trough seen in March and is up 22% year to date.
Management is confident that the recovery will extend into the second half of 2020, and its research and development labs plan to release a few newly developed products by early 2021.
Micro-Mechanics (Holdings) Ltd (SGX: 5DD)
Micro-Mechanics, or MMH, designs, manufactures and markets high-precision tools and parts for the semiconductor industry.
The group has five manufacturing facilities located in Asia and the US, and also engages in contract manufacturing for the wafer-fabrication industry.
MMH has posted a respectable set of earnings for its full fiscal year ended 30 June 2020.
Revenue inched up 6.4% year on year to S$64.2 million, while profit after tax climbed 13.1% year on year to S$14.7 million.
The group declared a final dividend of S$0.05 and a special dividend of S$0.02, bringing the full-year dividend to S$0.12, up 20% from the S$0.10 declared for the fiscal year 2019.
MMH’s share price has rebounded strongly since March and has doubled to S$2.68 from its low of S$1.33 back then. Its shares are also up around 37% year to date.
CEO Chris Borch believes the semiconductor industry is poised for a prolonged period of growth as chips become embedded in more and more electronic devices around us.
The World Semiconductor Trade Statistics (WSTS) projects that semiconductor sales will increase by 3.3% year on year for 2020 despite the crisis.
For 2021, WSTS estimates that global sales will rise by a further 6.2%.
MMH’s prospects appear sanguine as the group is well-positioned to capture opportunities offered by the growth in the industry and the increased proliferation of electronic devices as the pandemic accelerates digitalisation.
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Disclaimer: Royston Yang owns shares in iFAST Corporation Limited.