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Tuesday, June 17, 2014

BAT: What Are You Smoking?

BAT broke above its recent high of RM67-68 today. At the time of writing this post, it was trading at RM70.22. This bullish breakout (albeit on thin volume) signals the continuation of its prior uptrend.


Chart 1: BAt's weekly chart as at June 16, 2014 (Source: Tradesignum)

BAT's recent financial performance is shown in the table and chart below.


Table: BAT's last 8 quarter's result


Chart 2: BAT's last 29 quarter's result

BAT (at RM70.22 now) is trading at a trailing PE of 24 times. At this PE, its upside potential is limited.

Why is the share price rallying today? I believe it has to be something big, like a takeover or privatization exercise. We will have to wait & see.

Based on technical breakout, BAT could be a trading BUY.

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, BAT.

4 comments:

OS said...

Alex , what do u think of plenitude?
It's fundamental and technical perspective .
Thanks

Alex Lu said...

Hi OS,

Plenitu has an undemanding PE of 7.5x (based on closing price of RM2.76 & annualized earning of 37 sen/share).

Chartwise, it is in an uptrend after breaking above the horizontal line at RM2.50. Its potentoal target is RM3.20-3.30.

wong said...

Hi bro Alex. Please comment on ECOFIRS (3557). I heard ECOFIRS will hit 50sen. Can i buy at current level ?

Thx

Alex Lu said...

Hi wong,

Ecofirs is a speculative/turnaround stock. After losing money for many years, it is profitable in FY11-13. Notwithstanding the short profitable streak, Ecofirs's financial position is fairly weak. So, I won't put too much emphasis on the stock's fundamentals.

Chartwise, it is quite interesting as it has broken above a cup-with-handle formation at RM0.31. On that count, the stock may surprise on the upside.

So, the answer to your question is yes. This is a tradable stock but you shall exercise careful discretion in any trade, especially a stock with many unknowns, like Ecofirs.

Good luck!!