Greenyield Bhd ('Greenyb') may have broken to the upside its 3.5-year trading range of RM0.18-0.28. It closed at RM0.30 yesterday. If this breakout can sustain - and this is a big IF- then the stock's upleg may begin. First target will be RM0.38-0.40.
Chart 1: Greenyb's weekly chart as at June 23, 2014 (Source: Tradesignum)
Greenyb is a profitable company. It develops, manufactures and markets agricultural systems, products and services based on agro-technology. It has a strong balance sheet. As at 31/1/2014, its current ratio at 4 times while it has negligible borrowing of RM382k as compared to Shareholders' Fund of RM54 million. At the same time, it has net cash in hand of RM14.1 million (or, 4.2 sen per share).
At RM0.30, Greenyb is trading at a PE of 18 times (based on annualized earning of 1.7 sen for FY14). At this multiple, Greenyb is deemed overvalued.
Chart 2: Greenyb's last 8 years' result (plus estimate for FY14) (Source: Equities Tracker & Nexttrade)
Based on technical breakout, Greenyb 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, Greenyb.
No comments:
Post a Comment