Advertisement

Thursday, October 15, 2015

Success: A sudden recovery

Last Tuesday (October 13), Success surged up on large volume. Is there more upside to this sudden rally or a mere flash in the pan?

Results Update

For Q30/6/2015, Success's net profit soared 317% q-o-q or 28% y-o-y to RM11.8 million despite lower revenue of RM93 million - dropped by 8% q-o-q or 9% y-o-y. The improved bottom-line was attributed to better performance for its 2 segments (transformers and industrial lighting & process equipment) from both domestic & export markets.


Table: Success's last 8 quarterly results


Chart 1: Success's last 33 quarterly results

Valuation

Success (closed at RM1.61 on Oct 13) is now trading at a PE of 8.4 times (based on past 4 quarters' EPS of 19 sen). At this PER, Success is deemed fairly valued.

Technical Outlook

Success broke above its intermediate downtrend line, RR at RM1.35 on October 13. The ensuing rally sent this quiet stock breaking through 3 horizontal lines at RM1.40, RM1.50 & RM1.60.


Chart 2: Success's weekly chart as at Oct 13, 2015 (Source: ShareInvestor.com)

Success tested its long-term uptrend support at RM1.30 in June & August.

Chart 3: Success's monthly chart as at Oct 13, 2015 (Source: ShareInvestor.com)

Conclusion

Based on satisfactory financial performance, reasonable valuation & positive technical outlook, Success could be a good stock for trading BUY or 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, Success.

1 comment:

ryan said...

At a trading volume which never seen before something is cooking.