Perstima's uptrend to continue

Results Update

Perstima has just announced its results for QE30/9/2010. Its net profit increased by 3.7% y-o-y to RM21.2 million on the back of a 6.0%-increase in turnover to RM217 million. When compared to the immediate preceding quarter (QE30/6/2010), net profit declined by 12.8% despite a 7.2%-increase in turnover.


Table: Perstima's last 8 quarterly results



Chart 1: Perstima's last 24 quarterly results

Valuation

Based on current price of RM5.20, Perstima is trading at a trailing PE of 5.6 times. At this multiple, Perstima is deemed attractive.

Technical Outlook

Perstima has just broken above its recent high of RM5.12 but on thin volume (see Chart 2 below). The stock is now entering into a heavily-congested area, with multiple resistance levels. However, if we use the line connecting its multi-year peaks, it is possible to see that this stock may retest this line at RM6.30-6.40.


Chart 2: Perstima's daily chart as at Nov 3, 2010_9.10am (Source: Quickcharts)



Chart 3: Perstima's monthly chart as at Oct 30, 2010 (Source: Tradesignum)

Conclusion

Based on attractive valuation & technical breakout, Perstima could be a good trading BUY. Nevertheless, you should take some precaution by placing protective stops since the stock has risen quite substantially in the past 18 months. A good cut loss level would be the 20-week SMA line at RM4.80.