Brammer plc : Little downside potential
By Maxime Nonglaton
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 260 | GBX 0 | GBX 234 | -100% |
From a fundamental viewpoint, the company is undervalued compared to its peers. It has strong growth prospects and it is currently trading 10.7x EPS FY2012. Moreover, it has a 0.5x EV/Sales ratio for the same period. Finally, Brammer takes care of its shareholders because the company has a 4.60% yield for FY2013.
Graphically, the security is in an accumulation phase. 20-day moving average becomes flat. The stock is close to its GBp 245 support which has already been tested. Furthermore, in this area, there is an increasing slant. So this is a significant support area and there is little downside potential. Brammer can benefit from this area to have a new uptrend toward GBp 273. A crossover of this level would lead to new bullish targets.
Investors can take a long position immediately. The target price will be GBp 273 and by extension GBp 300. A stop loss will be fixed under the support area.