In this uncertain time, one has very little incentive to trade. However, there are some stocks that keep flashing a BUY call that's hard to resist. One such stock is DXN, which broke above the medium-term downtrend line at RM1.30 last Tuesday. After a short correction on Wednesday & Thursday, DXN continued its upleg on Friday. It nearly tested its horizontal resistance at RM1.50 today, when it made a high of RM1.49. The indicators have turned positive, in line with the upside breakout. If DXN can break above the RM1.50 level- the recent high- this stock may rally.
Chart 1: DXN's daily chart as at July 25, 2011_3.30pm (Source: Quickcharts)
Recent Financial results
I have attached the recent financial results of DXN for your perusal. All I can say is that the results is not spectacular.
Table: DXN's last 8 quarterly results
Chart 2: DXN's last 16 quarterly results
Valuation
Based on the last 4 quarters' EPS of 18 sen & current price of RM1.46, the stock is trading at a PE of 8 times. I think that is a fair value for a medium-size stock.
Conclusion
DXN could be a very interesting stock if it can break above the recent high of RM1.50. If that happened, it could be a trading BUY. However, given the state of the market, you should exercise careful discretion when entering into any trade.
3 comments:
hi ,alex, would you mind to blog on aeon? It seem that the major shareholder already accumulate more than 98% of total share if i am not mistaken. thanks
Hey alex. I wanna learn about trading. Do you have any resources you would recommend for now?
Hi Ethan
AEON's upside potential is very exciting, according to my technical study. It may potentially hit RM9.00-10.00.
Its annualized EPS is about 51 sen; thus giving it a PE of 14.5 times. Based on its steady growth of 20% per annum (it was 25% for FY2010), AEON is trading at a PEG ratio of 0.7 time, which is deemed reasonable. If it can maintain the 20%-growth rate, it could trade at a PE of 20 times; thus a fair price of RM10.00.
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