Table: Petdag's last 8 quarterly results
Chart 1: Petdag's last 32 quarterly results
Petdag (closed at RM22.70 yesterday) is now trading at a trailing PE of 28 times (based on last 4 quarters' EPS of 80.9 sen). Based on this PER multiple, Petdag is fully valued.However, its earnings rose by 46% last 4 quarters (after a drop of 24% in the preceding 4 quarters). If it can grow at 30%, the stock is fairly valued. I doubt it can do so in the current global economic environment.
Petdag broke its intermediator uptrend line, SS at RM24 in March. It may trade sideways at either the immediate horizontal line at RM22 or the next one at RM19. However, it is still above its long-term uptrend line support at RM20. See Chart 3.
Chart 2: Petdag's weekly chart as at May 11, 2016 (Source: ShareInvestor.com)
Chart 3: Petdag's monthly chart as at May 11, 2016 (Source: ShareInvestor.com)
Based the improved financial performance and positive long-term technical outlook , I maintain my rating for Petdag as a HOLD. Investors will have to live with its high valuation & the mildly negative medium-term outlook for now.
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, Petdag.