Wednesday, February 22, 2012

Granflo may have a bullish breakout

Grand-Flo Solution Bhd ('Granflo') is involved in the provision of Enterprise Data Collection and Collation System (EDCCS) Solutions. It is a reasonably profitable company which had recorded a net profit of RM7 million on a turnover of RM55 million for the 9-month ended 30/9/2011 (here). At RM0.52 now, Granflo is trading at a PE of 8.3 times (based on annualized EPS of 6.3 sen). At this PE multiple, Granflo is fairly priced.

Granflo has broken above its horizontal resistance at RM0.45 yesterday. This morning, it broke above the horizontal resistance at RM0.50. With these double upside breakout, Granflo could be set up for a strong rally. Since the stock has risen quite substantially in a short period, it may be due for some consolidation. If it can stay above the RM0.50 mark, Granflo may rally again.

Based on technical consoderation, Granflo could be a good trading BUY.

Chart 1: Granflo's weekly chart as at Feb 21, 2012 (Source: Tradesignum)

I have also appended below the chart for Granflo-WA, which has also risen nicely. This warrant has an exercise price of RM0.25 and expiring in April 2012. At RM0.27, it is trading at par.

Chart 2: Granflo-WA's weekly chart as at Feb 21, 2012 (Source: Tradesignum)

1 comment:

aastocks said...

Granflo-WA only expires in 2015 and not 2012 as mentioned!