United Engineers Limited – What really matters in a Stock

Founded in 1912 | Property/Engineering/Manufacturing

Comparison will be done with Boustead (F9D)

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 0.873 (22.7 Below fair value) F9D – 1.553
  • Price to earning ratio : 65.12 ( Above industry standard – 35.86) F9D – 14.521

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity : 50.35% | 27.44%
  • Growth Performance : -42.99% | -10.33%
  • Dividend Yield : 2.09%[ 5 years] | 2.84% [ 5 years]
  • Current Ratio : 2.11 | 2.17 [Stable]
  • Book Value per share : 3.06| 0.6166
  • Cash Flow per share : 0.0583 | 0.1231
  • Average management ability ( dividend growth  | Weak net income/gross profit margin | overall Positive & Strong cashflow within its business )Screen Shot 2017-07-15 at 11.06.37 amScreen Shot 2017-07-15 at 11.06.21 amScreen Shot 2017-07-15 at 11.06.04 am

3)Technical Analysis

Screen Shot 2017-07-15 at 11.13.16 am.jpg

Price action on the weekly chart shows that market is in a bullish trend for the past few weeks before forming a Head and Shoulder pattern. The stock seems to be respecting the pattern as you can see the immediate retracement when price tries to break above (ignoring the trend). An entry in this trade would not be wise as market in the past few weeks has been forming bearish characteristics.

4) Would I be vested into it?

No for now (because of technical), but might in the future.

Fundamentally:

  • Good cashflow management and undervalue
  • zero dividend growth
  • Low profit margin might be due to the size of the company

Technically:

  • H&S pattern is respect
  • RR ratio is not worth the entry

 

” +1 Knowledge Point”

“+1 P.I”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s