Volatility should make a big comeback

10/06/2017 | 03:53pm

The price of SUPERVALU INC. shares is range-bound. This phase will end sooner or later when volatility comes back.

Summary

● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.

● The company has solid fundamentals for a short-term investment strategy.


Strengths

● 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 company is one of the most undervalued, with an "enterprise value to sales" ratio at 0.47 for the 2018 fiscal year.

● The equity is one of the most attractive in the market with regard to earnings multiple-based valuation.

● Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.

● Over the past year, analysts have regularly revised upwards their sales forecast for the company.

● For the last few months, EPS revisions have remained quite promising. Analysts now anticipate higher profitability levels than before.

● The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.


Weaknesses

● The company sustains low margins.

● The technical configuration over the long term remains negative on the weekly chart below the resistance level at 24.78 USD

Copyright 2017 4-traders.com

Stock market news