RECOMMENDATION - INVEST AGGRESSIVELY TARGET - 270, TIME HORIZON -6 MONTHS, STOP-160 Investors!! Just dont miss out this one.
RATIONALE :
Traditional Perspective : The stock had been trading in a wide band of 140-185 since Oct 2009. Interestingly, the earnings of the company have increased substantially during this consolidation. This earnings expansion is likely to provide virility to the breakout.
Off late, the rally from 140 odd was successful in breaking out of this range decisively. Since then the stock has been retracing, building steam for the next upmove. - A breakout with vigor and a pullback - Classical Buying Technique.
Elliott Perspective - The stock has is amidst wave 2 of wave 3 - refer diagram above. Once this wave 2 plays out, an explosive upmove in the form of wave 3 of 3 is on the cards.
Valuations are compelling - The stock is available at a trailing twelve month PE of 5.32 and a book value of less than 1 - Cheap by any stretch of imagination.
Proxy to the Auto Boom - Although the auto sector is doing well, the stock prices have run up considerably making valuations unattractive. But the same is not case with the tyre companies which are still trading below/around the highs seen in 08 at reasonable valuations.
Land Sale : The company intends to unlock value by selling 25 acres of land at Bhandup (approximate price of 500 crore). The sale proceeds are substantial considering the fact that CEAT has a market cap of about 600 crore. Hence, buying the stock means acquiring a tyre company with an annual turnover of approximately 3000 crore at just 100 crore.
A reasonably priced company with good prospects given the auto boom and excellent chart formation - What else can we ask for ??
Disclaimer : The recommendations mentioned herein are for educational purpose only. One should not take buy/sell decisions based on the above analysis which is prone to errors. The author does not undertake any liability whatsoever arising out of profits/losses accruing from using the above analysis.
Traditional Perspective : The stock had been trading in a wide band of 140-185 since Oct 2009. Interestingly, the earnings of the company have increased substantially during this consolidation. This earnings expansion is likely to provide virility to the breakout.
Off late, the rally from 140 odd was successful in breaking out of this range decisively. Since then the stock has been retracing, building steam for the next upmove. - A breakout with vigor and a pullback - Classical Buying Technique.
Elliott Perspective - The stock has is amidst wave 2 of wave 3 - refer diagram above. Once this wave 2 plays out, an explosive upmove in the form of wave 3 of 3 is on the cards.
Valuations are compelling - The stock is available at a trailing twelve month PE of 5.32 and a book value of less than 1 - Cheap by any stretch of imagination.
Proxy to the Auto Boom - Although the auto sector is doing well, the stock prices have run up considerably making valuations unattractive. But the same is not case with the tyre companies which are still trading below/around the highs seen in 08 at reasonable valuations.
Land Sale : The company intends to unlock value by selling 25 acres of land at Bhandup (approximate price of 500 crore). The sale proceeds are substantial considering the fact that CEAT has a market cap of about 600 crore. Hence, buying the stock means acquiring a tyre company with an annual turnover of approximately 3000 crore at just 100 crore.
A reasonably priced company with good prospects given the auto boom and excellent chart formation - What else can we ask for ??
Disclaimer : The recommendations mentioned herein are for educational purpose only. One should not take buy/sell decisions based on the above analysis which is prone to errors. The author does not undertake any liability whatsoever arising out of profits/losses accruing from using the above analysis.
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