There may often be good reasons why a stock has surged in price.
There could be a major turnaround for the business, or it could have reported a decent set of earnings amid tough economic conditions.
Yet, other times it could just be an indication of frothy sentiment with no fundamental justification whatsoever.
As often as investors like to search through the bargain bin for beaten-down stocks, there’s also a great reason to check out stocks that made significant upward moves.
Some of them could be a source of inspiration for rooting out strong businesses that have the wind on their backs.
Last week, many stocks enjoyed a breath of fresh air as US inflation came in lower than anticipated for October.
Here are four that surged 7% or more that you may wish to add to your buy watchlist.
iFAST Corporation Limited (SGX: AIY)
iFAST is a financial technology (fintech) company that operates a platform for the buying and selling of unit trusts, bonds, and equities.
Last week, the group’s share price surged by 11.5% to end the week at S$4.67.
It seemed strange that this should happen as iFAST just reported a sharp 72% year on year plunge in net profit for its fiscal 2022’s third quarter (3Q2022).
Despite the lower profit, the group still maintained its S$0.013 interim dividend.
Because of market volatility, iFAST’s assets under administration also fell by 7.6% year on year to S$16.98 billion as of 30 September 2022.
However, the fintech company does expect accelerated growth from the second half of next year as its Hong Kong e-Pension division starts to contribute more substantially.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, MIT, owns 85 properties in Singapore and 56 in the US with a total asset under management (AUM) of S$8.9 billion as of 30 September 2022.
The industrial REIT saw its share price rebound by 7% to S$2.30 after touching a 52-week low of S$2.12 recently.
To be fair, MIT did report a 3.2% year on year dip in its distribution per unit to S$0.0336.
The REIT’s cost of debt also climbed from 2.5% to 2.9% over the last three months, in line with the surge in interest rates resulting from sharp hikes by the US Federal Reserve.
To mitigate the pressures from rising costs and a weaker macroeconomic environment, the REIT manager plans to release S$6.6 million over the next three quarters.
Investors may also have been enticed by MIT’s trailing 12-month yield of 6.4% at a unit price of S$2.15.
The yield has since dipped to 6% with the surge in the REIT’s unit price.
Riverstone Holdings Ltd (SGX: AP4)
Riverstone is a manufacturer of nitrile and natural rubber gloves used in the high-tech manufacturing and healthcare industries.
The group has an annual production capacity of 10.5 billion gloves as of 31 December 2021.
Riverstone saw its share price surge 13.8% to S$0.66 last week.
The group released its 3Q2022 and first nine months (9M2022) earnings at the same time.
Revenue for 3Q2022 tumbled 58.6% year on year to RM 270 million as glove demand continues to normalise with the pandemic easing.
Operating profit fell by three-quarters year on year to RM 87.9 million while net profit plunged 76.2% year on year to RM 63.4 million.
Despite the poorer showing, CEO Wong Teek Son commented that Riverstone’s clean room glove segment continues to hold steady.
The business also generated a healthy free cash flow of RM 203 million for 3Q2022 and declared a second interim dividend of RM 0.06 per share.
Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6)
Yangzijiang Shipbuilding, or YZJ, is one of the largest shipbuilding companies in China with four shipyards in Jiangsu province.
The group produces a broad range of commercial vessels such as bulk carriers, containerships, and LNG carriers.
YZJ’s share price raced ahead by 9.5% last week to S$1.38, capping off an excellent run that has seen the blue-chip shipbuilder’s share price surge by 84% year to date.
This performance is perhaps not surprising in light of the group’s announcement last month that its order book has hit an all-time high of US$10 billion.
In the same announcement, YZJ also clinched its maiden contract win in the LNG carrier space, with its first two vessels scheduled to be delivered from 2025 to 2026.
Meanwhile, in its 3Q2022 business update, the group also disclosed that its year to date contract wins has topped US$4.2 billion, more than double its FY2022 target of US$2 billion.
Things are going swimmingly well for the shipbuilder and investors can look forward to better earnings and possibly a higher dividend when it reports its full-year results early next year.
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Disclaimer: Royston Yang owns shares of iFAST Corporation Limited and Mapletree Industrial Trust.