Trading Buy: UTAC
UTAC has put in an extremely impressive performance for FY 06. They have achieved a profit growth of 81.9%, and EPS growth of 67.3%.
For Quarter on Quarter (4Q 06 vs 05), there was only a change of 11.7 % for its EPS. For the model i follow, not only am i looking at a good FY result, i'm also looking at QOQ Quarterly results.
Why is it so? Its possible that this profit growth can't be sustained for the next quarter, by virtue of the fact that QOQ growth isn't good. Indeed, if you were to look into what the management thinks, they only expect a growth of -6% to 0% on Q1 07. This makes UTAC not a stock to hold for the long run.
However, it is my belief that the stock is on its way to a rally. The stock should rally for the tomorrow and thru to wednesday. I'll make a high risk call for
Trading BUY, to Queue tomorrow morning, and a conservative sell target of $1.00.
2 comments:
While I agree that it is important to look at the QoQ figures, it cannot be denied that by virtue of the cyclical nature of its business, UTAC will always have fluctuations on its QoQ figures. And this has been bore out in the result presentation.
ITs interesting that mgmt think Q107 is a slower year, I would expect it to be strong given the demands for electronic goods like gaming console, handphones, MP3 players, iPhone etc.. all these need chips which requires testing that UTAC provides.
We shall see what happened. Vested for now.
Nice article discussing about the better performance of UTAC in the market.Also about their Best SGX stock picks and profit and EPS growth, as well...
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