SSE plc : Running out of steam as opportunity
By Camille Chretien
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 1,564.75 | GBX 1,670 | GBX 1,510 | +6.73% |
The group is still undervalued and the “enterprise value to sales” ratio shows an attractive valuation of 0.67x for the current year. Further, after a sharp decrease in the 2013 fiscal year, the net margin is expected to improve from 1.5% last year to 3.3% in 2014.
Technically, the uptrend in the medium and long term should protect the stock of a major downtrend. In the short term, a decline could lead the share to the GBp 1550 support, corresponding to the 50-day moving average. Therefore, a technical rebound will fix an objective near to the GBp 1670 short-term resistance.
In this configuration, a decrease seems unavoidable in the GBp 1550 area. Investors could take a buy order on this level and get a good entry point with a stop-loss below the medium term support.