Unite Group plc : Bullish trend could be stopped
July 11, 2012 at 03:32 am
By
Entry price | Target | Stop-loss | Potential |
---|
GBX 202.5 |
GBX 0 |
GBX 212 |
+100% |
---|
UNITE is the UK’s leading operator of purpose built student accommodation with 40,000 beds in 131 properties across 24 of the UK’s strongest university cities. A bearish trend is likely to be in the short-term, after the technical rebound recorded in the past trading sessions.
From a fundamental viewpoint, the security is trading 20.5 times earnings per share estimates for this year. With a ratio enterprise value to sales of 8.94 the group seems overvalued. This is confirmed by Surperformance rating because UNITE has no stars. Moreover, analysts revised regularly downward EPS and revenues estimates and the company has a lot of debt with a leverage of 10.7 for 2012.
Technically, UNITE is trading in a bullish trend on the short-term, but this could be stopped by the GBp 211.5 mid-term resistance. In this context we could imagine a bearish trend towards GBp 191 and by extension GBp 181.6.
Both technical pattern and financial elements leave space for a bearish scenario in the short-term. The GBp 211.5 resistance should stop the upward trend and for this reason we suggest a short position in order to aim GBp 191. The second target price will be GBp 181.6. A stop loss will be placed above GBp 211.5, in order to cover the position.
The content herein constitutes a general investment recommendation, prepared in accordance with provisions aimed at preventing market abuse by Surperformance, the publisher of MarketScreener.com. More specifically, this recommendation is based on factual elements and expresses a sincere, complete, and balanced opinion. It relies on internal or external data, considered reliable as of the date of their release. Nevertheless, this information, and the resulting recommendation, may contain inaccuracies, errors, or omissions, for which Surperformance cannot be held responsible. This recommendation, which in no way constitutes investment advice, may not be suitable for all investor profiles. The reader acknowledges and accepts that any investment in a financial instrument involves risks, for which they assume full responsibility, without recourse against Surperformance. Surperformance commits to disclosing any conflict of interest that may affect the objectivity of its recommendations.