Notion- the recovery is about to begin

Technical Outlook

Notion has broken above its intermediate downtrend line at RM1.85 in mid-January. After the upside breakout, the stock stayed around the breakout level for 2 weeks before it rallied to break above the RM1.85 level yesterday. This could be the start of its next upleg, which in the past has been very rewarding.


Chart 1: Notion's weekly chart as at Jan 30, 2012 (Source: Quickcharts)

Recent Financial Performance

Notion has recovered from its poor financial performance in second half of 2010. For QE30/9/2011, it reported a net profit of RM12.5 million on a turnover of RM62 million.


Table: Notion's last 8 quarterly results



Chart 2: Notion's last 20 quarterly results

Valuation

Based on its close of RM1.94, Notion is now trading at a PE of 6.5 times. At this multiple, Notion is deemed attractive.

Conclusion

Based on good financial performance, reasonable valuation and bullish technical outlook, Notion could be a good trading Buy or a medium-term investment stock.