|Contributor / Partner
Strategy published on : 09/23/2020 | 04:42
short sellStop-loss triggered
Entry price : 1.15HKD
Target : 0.9HKD
Stop-loss : 1.19HKD
Potential : 21.74%
The pullback that could be observed for stocks in Grand Baoxin Auto Group Limited for several weeks should continue over the coming trading sessions.
Investors should open a short trade and target the HKD 0.9.
● The stock, which is currently worth 2020 to 0.31 times its sales, is clearly overvalued in comparison with peers.
● Its low valuation, with P/E ratio at 7.18 and 4.7 for the ongoing fiscal year and 2021 respectively, makes the stock pretty attractive with regard to earnings multiples.
● The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.
● The company has insufficient levels of profitability.
● Financial statements have repeatedly disappointed market stakeholders. Most often, they were below expectations.
● The company is not the most generous with respect to shareholders' compensation.
● The company's sales previsions for the coming years have been revised downwards, which foreshadows another slowdown in business.
● For the last twelve months, sales expectations have been significantly downgraded, which means that less important sales volumes are expected for the current fiscal year over the previous period.
● Analysts covering the stock have recently lowered their earnings forecast.
● For the last few months, analysts have been revising downwards their earnings forecast.