Commodities are enjoying a good run thanks to the current macro economic climate. Palm oil is one of the most important commodities in the world, and palm oil futures have surged to new highs in recent months:
That said, as a commodity sector, palm oil stocks can be cyclical and you don’t want to be stuck holding onto these stocks when the cycle turns against them. My solution is to use a simple momentum trading framework to help us time our trades and pocket more profits.
Using my framework, I discovered 5 palm oil stocks listed on SGX with strong momentum (data was taken on 6 April 22):
5 Palm Oil SGX Stocks to watch in April 2022
1) Wilmar International (SGX:F34)
Wilmar International is Asia’s leading agribusiness and has a diverse range of business activities that include palm oil cultivation, sugar processing, consumer products manufacturing, flour and rice milling and many others. It is also one of the world’s largest oil palm plantation owner with plantations across Indonesia, Malaysia and Africa.
In FY2021, Wilmar’s revenue increased by 30% to US$65.8 billion while their net profit was up 23% at US$1.9 billion.
2) Golden Agri-Resources (SGX:E5H)
A vertically integrated palm oil plantation company and one of the world’s largest “seed-to-shelf” agribusiness, most Singapore investors should find Golden Agri a familiar name. They own palm oil plantations in Indonesia which drive their palm oil production and business.
In FY2021, Golden Agri reported a 44% jump in revenue to US$10.28 billion while their net profit surged 162% to US$603 million.
3) First Resources (SGX:EB5)
First Resources is another leading palm oil producer in the region with plantations located across Indonesia.
In FY2021, First Resources reported a 56% jump in revenue to US$1 billion while their net profit is also up 54% at US$149 million.
4) Kencana Agri (SGX:BNE)
Kencana Agri cultivates and processes palm oil and owns oil palm plantations in Indonesia. In FY2021, Kencana Agri reported a 23% jump in revenue to US$128 million while their net profit surged 317.8% to US$16.8 million.
They own a young palm profile with significant production growth potential and have also expanded into renewable biomass power plants, these plans would help them continue growing the business in the future.
You should note that as a small cap stock, Kencana’s share price is highly volatile. That said, at the point of writing, Kencana is still exhibiting good upward momentum.
5) Bumitama Agri (SGX:P8Z)
A leading producer of palm oil and palm kernel, Bumitama Agri is the holding company of Bumitama Genajaya Agro which owns a oil palm plantation located in Indonesia.
In FY21, Bumitama Agri reported a 33.0% increase in revenue to IDR 6.8 million while their net profit was up 79.8% at IDR 1.5 million.
Palm oil stocks still going strong
The Palm Oil SGX stocks mentioned above have all been on an upward momentum in recent months and could help improve your portfolio returns, if you know when to enter and exit the trade.
If palm oil stocks are not your thing, consider the Best Commodity ETFs.
Use momentum to catch more opportunities
Momentum is a phenomenon that has long been proven. Using the QMT framework, we ride on trends simply by measuring and ranking “momentum” in numbers.
If you want to spot more trends using this framework, I’ll be sharing how you can use the same framework at my upcoming webinar.
