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Three Shares That Beat the Market Today

Singapore’s stock market, as represented by the Straits Times Index (SGX: ^STI), inched up 0.4% to 3,117 points for its third consecutive day of gains today.

Within the index, only 16 shares out of its 30 components managed to make some headway during the trading session while 11 others suffered losses. Let’s take a look at some shares outside the index that did better than it.

Novo Group (SGX: MR8) climbed 8% to S$0.163. Yesterday, the company released a profit warning and informed the market that it “expects to record an increase of loss for the nine months ended 31 January 2014 as compared to that for 2013.” In the nine months ended 31 Jan 2013, the steel products outfit had made a loss of US$4.3 million.

This time around, Novo Group cited increased costs stemming from its tinplate operations in China as a culprit. In addition, there was “unfavourable market conditions” for the company’s trading business, leading to a decrease in profits from that unit.

These factors all contributed to the larger losses expected by Novo Group and investors can have a better picture of what happened when the company releases its third quarter results on 10 March 2014.

In any case, despite the seemingly unwelcome news of potentially larger losses in the upcoming earning release, the market has reacted very favourably, judging from the share price increase.

Food Empire Holdings (SGX: F03) is up 3.7% to S$0.43. The food & beverage manufacturing company’s main markets are in Russia, Eastern Europe, and Central Asia. Russia alone accounted for 58% of the company’s revenue in 2013.

The company’s shares have declined sharply in recent times, falling by 15.8% from S$0.505 on 20 Feb 2014 to its current price. There’s likely to be two factors at play here regarding Food Empire’s share price drop.

The first involves the on-going political tension between Russia and the United States over the former’s perceived display of military aggression against Ukraine. It has generated quite a bit of fear in the Russian financial markets. For instance, Russian stock market indexes had fallen by as much as 12% on Monday. With that as a back drop, Food Empire might just be feeling some “spill-over effects” from all that fear.

The second factor is more company-specific. Food Empire had released its full-year results for 2013 on 1 March 2014, which saw profits tank by 43% to US$11.7 million despite revenue growing by 10.6% to US$263 million. There was a strong increase in a multitude of costs across the board (including staff costs and depreciation of properties, equipment, and plants) leading to the decline in profit.

Those aren’t strong results. Furthermore, the company warned in its earnings release that it’s seeing sharper volatility in the Russian ruble and other Eastern European currencies that could “”negatively affect [Food Empire]” if said currencies would undergo “prolonged and significant devaluation”.

Ezra Holdings (SGX: 5DN) moved up 2.9% to S$1.08 after it revealed this morning that it had recently won contracts with a collective value “exceeding US$125 million”. The contracts are awarded to the company for subsea construction works and offshore support in the Asia Pacific and West Africa regions.

Ezra’s chief executive and managing director Lionel Lee, commented on the contracts: “These are important wins for us as it strengthens our presence in West Africa and growing leadership in Asia. The subsea project in the South China Sea is also a clear recognition of the deepwater pipelay capabilities of our subsea team and our key assets here in Asia.”

Lee added, “The Asia Pacific region is an important market for us with offshore support, subsea construction and engineering activities expected to continue picking up as oilfield operators venture further offshore. With our strong roots here in Asia, we are well positioned to compete for the many upcoming profits in the region.”

Elsewhere, Ezra also revealed that its associated company, EOC Limited, had won a separate US$100 million contract for the hook up and maintenance barge, the Lewek Conqueror, for work to be done in South East Asia.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Chong Ser Jing doesn’t own shares in any companies mentioned.