Jordan Dufee

The revival in interest should continue

Strategy published on 04/21/2017 | 10:00

long trade Live

Entry price : 559GBp | Target : 630GBp | Stop-loss : 525GBp | Potential : 12.7%

Shares in Redrow plc have recently benefitted from a regain of interest by market participants. The technical chart pattern suggests a continuation of the upward movement. Investors have an opportunity to buy the stock and target the GBp 630.

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Summary

• The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.
• In a short-term perspective, the company has interesting fundamentals.

Strengths

• The group's activity appears highly profitable thanks to its outperforming net margins.
• Predictions on business development from analysts polled by Thomson-Reuters are tight. This results from either a good visibility into core activities or accurate earnings releases.
• The group usually releases upbeat results with huge surprise rates.
• The equity is one of the most attractive in the market with regard to earnings multiple-based valuation.
• Upward revisions of sales forecast reflect a renewed optimism among the analysts covering the stock.
• Over the last twelve months, the sales forecast has been frequently revised upwards.
• For the last 4 months, the company has been enjoying highly positive EPS revisions, which were frequently and significantly raised.
• For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
• Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.
• The stock is in a well-established, long-term rising trend above the technical support level at 414.2 GBp

Weaknesses

• The share is close to its long-term resistance in weekly data. Therefore, the potential should be limited. However, a further bullish movement when crossing this resistance will be a positive signal.
• The company is not the most generous with respect to shareholders' compensation.

Ratings chart

Subsector Homebuilding - NEC

1st jan. Capitalisation (M$) Investor Rating REDROW PLC 27.51% 2 572 DAIWA HOUSE INDUSTRY CO LTD 20.38% 23 018 D.R. HORTON, INC. 23.97% 12 725 SEKISUI HOUSE LTD 1.75% 12 269 SEKISUI CHEMICAL CO LTD 9.51% 9 167 PERSIMMON 28.27% 8 939 PULTEGROUP, INC. 31.39% 7 619 TAYLOR WIMPEY 17.07% 7 476 BARRATT DEVELOPMENTS 22.19% 7 234 TOLL BROTHERS INC 26.03% 6 391 BERKELEY 18.09% 5 807

Autres valeurs du secteur

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