Friday, June 06, 2014
Orient: Poised to go higher?
For QE31/3/2014, Orient's NP dropped 6% q-o-q but rose 27% y-o-y to RM70 million while revenue was down 3% q-o-q but rose 16% y-o-y to RM733 million.
Table: Orient's last 8 quarterly results
Chart 1: Orient's last 34 quarterly results
Orient (closed at RM7.80 yesterday) is now trading at a PE of 24 times (based on last 4 quarters' EPS of 33 sen). At this PE, Orient is deemed overvalued.
Orient broke above its downtrend line at RM7.70 in April. With this breakout, Orient's downtrend is over and the stock may move either sideways or up. To start the next upleg, Orient needs to surpass the April high of RM8.02. Today, it made an intra-day high of RM8.05. At the time of writing, it is trading at RM8.00.
Chart 3: Orient's weekly chart as at June 5, 2014 (Source: Tradesignum)
Based on slightly better financial performance & mildly positive technical outlook, Orient could be a good stock for a recovery play. If it can break above the RM8.02 mark, the stock could be a trading BUY. Nevertheless, the stock's s upside potential may be limited as it is trading at demanding valuation.
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, Orient.