Eagle Materials, Inc. : The 20-day moving average in support
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02/14/2013 | 10:15am
Opinion : Bullish above 66.6 USD
Target price : 74.3 USD Potential: 12.64%
Stop loss: 62.7 USD
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NYSE
Construction Materials |
Eagle Materials shows a strong performance for several months.
The fundamental qualities of the group are clearly attractive as evidenced by the upward revisions of earnings per share for 2013 (USD 1.62 today against USD 0.82 in January 2012). Also, sales are expected to skyrocket by almost 30% in 2013. The profitability of the company's business remains good. The high levels of valuation show the interest of investors for this security.
Technically, the share has a bullish configuration on all time scales. Prices are supported by increasing moving averages as shown by the 20-period, in weekly data, and enclose the stock in a dynamic upward trend. This configuration could help the security to go beyond the USD 66.6 resistance and to come back to the USD 74.4 highest level.
Exceeding the technical line at USD 66.6 would point to ambitious upward targets. In this case, market participants could buy this stock with an initial target of USD 74.3. If investors reduce long-side exposure for profit-taking, a bearish trend would happen below the 20-day moving average and so this strategy would be invalidated.
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Valuation |
2014e |
2015e |
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PER (Price / EPS)
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26,5x |
17,6x |
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Capitalization / Revenue
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3,92x |
3,19x |
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EV / Revenue
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4,35x |
3,38x |
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EV / EBITDA
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13,9x |
9,54x |
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Yield (DPS / Price)
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0,51% |
0,51% |
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