Tasco- still good for long-term investment

Results Update

Tasco's net profit increased by 9.8% q-o-q or 3.8% y-o-y to RM7.1 million while its turnover declined by 9.2% q-o-q or 6.8% y-o-y to RM107 million. The drop in turnover is attributable to the adverse effect of the supply disruption due to the earthquake & tsunami in Japan in March. The bottom-line still rose because of strong contribution from the warehousing & haulage division.


Table: Tasco's last 8 quarterly results



Chart 1: Tasco's last 18 quarterly results

Valuation

Tasco (closed at RM1.55 yesterday) is now trading at a PE of 5.7 times (based on last 4 quarters' EPS of 27.36 sen). At this PE, Tasco is deemed quite attractive.

Technical Outlook

Tasco has broken its intermediate uptrend line at RM1.60 (see Chart 2). However, its long-term uptrend line is still intact at RM1.40 (see Chart 3). As such, the stock is likely to trade between RM1.40 & RM1.60 in the near term.


Chart 2: Tasco's daily chart as at August 11, 2011 (Source: Quickcharts)



Chart 3: Tasco's weekly chart as at August 8, 2011_plotted on log scale (Source: Tradesignum)

Conclusion

Based on attractive valuation, Tasco could be a good stock for long-term investment. As the technical outlook is mixed, I would rate it a HOLD.