Tullett Prebon Plc : An appropriate purchase level
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07/20/2012 | 03:19am
Opinion : Bullish above 262 GBp
Target price : 299.1 GBp
Stop loss: 260 GBp
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LONDON STOCK EXCHANGE
Investment Services |
Tullett Prebon operates as an intermediary in wholesale financial markets for trading activities of its clients, in particular commercial and investment banks. The business now covers seven major product groups: Volatility, Rates, Non Banking, Treasury, Energy and Commodities, Credit, and Equities. Tullett Prebon's electronic broking division offers electronic solutions to these products. In addition to its brokerage services, Tullett Prebon offers a variety of market information services through its IDB Market Data division, Tullett Prebon Information. The GBp 264.4 support, currently tested, should allow Tullett Prebon to rally again.
According to Surperformance rating, the company is an opportunity for a trading strategy. Indeed, it is a good compromise between its value and its visibility. Analysts estimate for the company a 6.44x PER ratio and a 3.06x EV/EBITDA ratio for 2012.
Technically, in daily data, even if moving averages are still in a downtrend, a positive reaction in the GBp 264.4 area should stop this trend and allow a technical rebound towards GBp 285.4. Moreover, technical indicators show a significant oversold condition which strengthens this bullish scenario. Finally, a double bottom pattern seems to be forming.
Considering technical and fundamental elements, it seems to be an appropriate timing to take immediately a long position in Tullett Prebon in order to benefit from the GBp 264.4 support area. A first target price will be the GBp 285.4 resistance. A stop loss order will be placed under the mid-term support currently tested. Only a crossing of GBp 262 would validate a bullish trend in order to aim a higher target price.
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Valuation |
2013e |
2014e |
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PER (Price / EPS)
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8,40x |
7,41x |
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Capitalization / Revenue
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0,73x |
0,72x |
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EV / Revenue
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0,49x |
0,44x |
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EV / EBITDA
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3,17x |
2,78x |
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Yield (DPS / Price)
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6,12% |
6,25% |
| Profitability |
2013e |
2014e |
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Operating Margin (EBIT / Sales)
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14,0% |
14,5% |
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operating laverage (Delta EBIT / Delta Sales)
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-5,96x |
3,06x |
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Net Margin (Net Profit / Revenue)
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9,23% |
10,2% |
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ROA (Net Profit / Asset)
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2,01% |
2,11% |
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ROE (Net Profit / Equities)
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17,5% |
19,8% |
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Rate of Dividend
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51,4% |
46,3% |
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