This is a personal weblog, reflecting my personal views and not the views of anyone or any organization, which I may be affiliated to. All information provided here, including recommendations (if any), should be treated for informational purposes only. The author should not be held liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein.
Wednesday, April 24, 2013
Spritzr- bottom-line slipped on higher raw materail & labor cost
Result Update
For QE28/2/2013, Spritzr's net profit dropped 2% q-o-q but rose 36% y-o-y to RM5.0 million while revenue rose 22% q-o-q or 26% y-o-y to RM57 million. Pre-tax profit dropped 10% q-o-q due to an increase in PET resin prices. The performance of the current quarter was also impacted by the higher employee benefit expenses as a result of the minimum wage implementation effective 1 January 2013. Revenue increased 22% q-o-q due to the increase in sales volume of bottled water.
Table: Spritzr's last 8 quarterly results
Chart 1: Spritzr's last 27 quarterly results
Valuation
Spritzr (at RM1.20 as at 11:00am) is now trading at a PE of 10.3 times (based on last 4 quarters' EPS of 11.7 sen). For a consumer staple, Spritzr is deemed very attractive.
Technical Outlook
Spritzr has broken above the 'handle' of the reliable technical formation known as the "Cup-with-handle". The only shortcoming is the lack of volume to confirm this breakout. Hopefully the stock will recruit sufficient buying support to launch into orbit.
Chart 2: Spritzr's daily chart as at April 23, 2013 (Source: quickcharts)
Conclusion
Based on good financial performance (albeit a small drop in bottom-line), attractive valuation & positive technical outlook (albeit a lack of volume), Sprritzr is a good stock for trading BUY as well as long-term investment.
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Sprtizr.
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