Peyto Expl & Dev. : A downturn could form
Indicators argue for a technical correction after the last bullish movement recorded in past sessions.
Technically, the security could run out of steam close to the CAD 21 resistance. Indeed, the stock is moving in an upward trend in the short term but it could know a halt. In this context, the downward movement could improve and it should expect a return to CAD 18.8. Indicators that show an overbought situation confirm this scenario.
From a fundamental viewpoint, firstly, we note the high valuation of the company. PER for the current year is at 27.74x and expected at 21.32x for next year. With a valuation ratio of 8.53x, the group appears overvalued compared to its business activity. Regarding the financial situation, leverage is at 2.08x. Debts are estimated at 706.28 M CAD for the current year.
The graphical configuration argues to establish a short position at the current price. The end of the technical rebound, the consolidation phase and overbought situation: Peyto Exploration & Development Corp has all the characteristics for short selling. The first objective will be fixed near the CAD 18.84 short term support and by extension the CAD 17.77 area. This strategy should be protected by a stop loss above CAD 21.
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Valuation |
2013e |
2014e |
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PER (Price / EPS)
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25,7x |
19,4x |
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Capitalization / Revenue
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7,64x |
6,01x |
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EV / Revenue
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8,99x |
7,19x |
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EV / EBITDA
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11,4x |
9,42x |
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Yield (DPS / Price)
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2,70% |
2,93% |
| Profitability |
2013e |
2014e |
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Operating Margin (EBIT / Sales)
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41,1% |
41,6% |
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operating laverage (Delta EBIT / Delta Sales)
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1,27x |
1,06x |
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Net Margin (Net Profit / Revenue)
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30,5% |
32,3% |
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ROA (Net Profit / Asset)
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9,71% |
10,4% |
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ROE (Net Profit / Equities)
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14,0% |
17,7% |
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Rate of Dividend
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69,4% |
56,8% |
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