Stop and smell the flowers
Coronation has been on a slippery downward slope since December 2014. The reasons for this have been twofold. Firstly, valuations were extremely stretched (end of 2014), trading at a market capitalization (mkt cap) to Assets Under Management ( AUM ) percentage of close to 7%, while the average international ratio (for global Asset Managers) was trading at around 2%. Secondly, Coronation's growth prospects are questioned in a South African market, which has seen the entry of more competitors and the growth of a passive ( ETF ) market. At the current (mkt cap/AUM) ratio of 2.3%, Coronation is trading at it's cheapest levels in 5 years.
Add into this mix a Forward PE (Source: Thomson Reuters ) of 10.8 times and a Forward DY of 9.2%; then you get an opportunity in my view.
We can clearly see the Descending Triangle in the share price movement that developed since April, which was broken recently. Should we see a break and close above the R39 levels could see the share price seeking resistance only at the 50-day moving average at R41.50. My next target would be the top of the triangle (R44), with a break and close above these levels, being very bullish technivcally.
The share price currently finds itself in extreme oversold according to its 14-day RSI. It has also massively underperformed the JALSH over rolling 12 month period.
Consensus target price (according to Thomson Reuters ) for Coronation is R41.50 but only covered by one analyst (Avior Capital Markets).
Add into this mix a Forward PE (Source: Thomson Reuters ) of 10.8 times and a Forward DY of 9.2%; then you get an opportunity in my view.
We can clearly see the Descending Triangle in the share price movement that developed since April, which was broken recently. Should we see a break and close above the R39 levels could see the share price seeking resistance only at the 50-day moving average at R41.50. My next target would be the top of the triangle (R44), with a break and close above these levels, being very bullish technivcally.
The share price currently finds itself in extreme oversold according to its 14-day RSI. It has also massively underperformed the JALSH over rolling 12 month period.
Consensus target price (according to Thomson Reuters ) for Coronation is R41.50 but only covered by one analyst (Avior Capital Markets).
Trade active
Great break. First target reached (R41.50). Also traded at my R44 level. Still holding on to this position, with a R47 target for now.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.