Insights for May 2017

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After several years with no large eye-catching floats on the London Stock Exchange, finally we have a successful IPO for a tech firm in London, to rival the scale of floats found in the US. Shares in Alfa Financial Software Holdings Plc, which provides software used by firms to manage loans for the purchase of assets ranging from office equipment to cars, planes and satellites, were floated on Friday 26th May and the company achieved a first-day market valuation of 1.2 million pounds. This was up from the 975 million pounds the company was valued at before the IPO, reflecting the price per-share of 325p. Alfa shares soared by 32% and the share price was 429.75p at the close of market on Friday. (Read more)

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The Vodafone Group Plc. is a compelling buy at the current levels with a potential upside of up to 15% from the current levels. The stock finished trading on the London Stock exchange at 224p a share, down by 0.04% compared to the previous close.  The stock has had a spectacular rally in the past few days and we expect the upside or rally to continue. Currently, the stock has been trading above its 20 day moving average (DMA), 50 DMA and 100 DMA of 209p, 207p and 204p respectively. In terms of charting or technical analysis, the stock has been trading on the upward trend line and has even breached the upper side of the Bollinger band, confirming the bullish trend of the stock. On weekly charts also, the stock has been making green marubozu which indicates that upward movement will continue. The immediate resistance of the stock is at 225p. However, any breakout above 225p would mean an up move up to 239p within a month’s time. Therefore, we recommend buying Vodafone plc above 225p with a target of 240p.

The company announced its full year FY’17 results, a few days back on 16th May. Lets throw light on the latest results of the company. The company’s FY17 revenue was down by 4.4% to €47.6 billion The revenue declined primarily because of foreign exchange movements. The adjusted EBITDA was also up by 3.4% to €15.8 billion, within 3% to 6% guidance range. Hence, EBITDA was also in line with the management guidance. Adjusted EBIT grew by 5.3% to €4.0 billion, with organic adjusted EBIT increasing by 7.0%* as adjusted EBITDA growth outpaced the increase in depreciation and amortisation charges. Reported operating profit more than doubled to €3.7 billion, due to a €1.3 billion gain from the merger of Vodafone Netherlands and Ziggo and a €0.6 billion impairment charge recognised in the year ended 31 March 2016 in respect to Romania However, the company reported loss for FY’17 at  €6.1 billion, includes  a net of tax impairment of India of €3.7 billion. (Read more)

Topics: Analysis
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Posted by MaxMarioni on 21 May 2017, 9:00 PM

Middling Prospects for JD Wetherspoons

Earlier this month, British pubs group JD Wetherspoon (JDW.L), which owns and operates more than 900 pubs in Britain and Ireland, posted its earnings for the first quarter of 2016. These were received more than positively by investors: like-for-like sales increased by a surprising 4% in the three months ending in April, comparing favourably with market expectations. This was taken as a sign that the pubs group, led by pro-brexit campaigner Tim Martin, had nothing to fear from the consequences of leaving the EU. 'A number of individuals and organisations, which previously supported UK membership of the Euro and its disastrous predecessor the ERM, and who recently promoted the erroneous view of a severe economic downturn in the immediate aftermath of a leave vote in the referendum', the funambolic Mr Martin had said at the time 'are again offering the government advice'. In a veiled reference to the head of the CBI, Carolyn Fairbanks, he further added that 'it is doubtful if Ms Fairbairn has ever been involved in serious business negotiations herself', before comparing the complex EU exit negotiations ahead to buying a house. 'It is hard to believe that such foolhardy advice could emanate from a business organisation', he concluded. (Read more)

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Vedanta Resources plc. is a natural resources company, which is engaged in exploring, extracting and processing minerals, and oil and gas. The Company produces zinc, lead, silver, copper, aluminum, iron ore, oil and gas, and commercial power. Its operations are located in India, Zambia, Namibia, South Africa, Liberia, Ireland, Australia and the United Arab Emirates. Its segments include Zinc-India, Zinc-International, Oil & Gas, Iron Ore, Copper-India/Australia, Copper-Zambia, Aluminum and Power. Its geographical segments include India, China, Far East Asia, Middle East, Europe, and Africa, Asia Others, UK and Others. Its Copper business includes a copper smelter, over two refineries and over two copper rod plants in India; a copper mine in Australia, and an integrated operation in Zambia consisting of approximately three mines, a leaching plant and a smelter. The Company's oil and gas operations consist of the assets of Cairn India Limited in India, Sri Lanka and South Africa.

Vedanta Resources Plc. should be a ‘’Buy’’ at the current price levels. After the stock has had its good share of correction, it was one of the top risers on the London stock exchange on 5th May. The stock finished trading on the London Stock exchange at 598.5p a share on 8th May, down by 4.6% compared to the previous close. However, it seems that the stock should consolidate at 550p-580p and shouldn’t fall further and if the stock is able to sustain the support zone of 550p, fresh buying or long positions can be initiated. The stock has been trading below its 20 day moving average (DMA), 50 DMA and 100 DMA of 711p, 790p and 891p respectively. As we know, moving averages act as a crucial support and resistance for the stock. In terms of charting or technical analysis, the stock made a green marubozu on Friday which surely indicates the bullish trend of the stock. However, we couldn’t get the confirmation of the bull trend as the stock fell again on 8th May. Therefore, we need to wait for the confirmation of trend reversal, otherwise stock may continue to fall more and in case it goes below 550p, then it would be better to avoid the stock. All traders or investors would be advised to exercise caution while building fresh long positions in the stock. In case of confirmation of bullish trend, 719p would act as a potential resistance as well as the next target price of the stock.  (Read more)

Topics: Analysis
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Iofina plc. is a holding company. The Company is involved in the exploration and production of iodine, iodine specialty chemical derivatives, produced water and natural gas. Its segments are Iodine and Iodine Derivatives, and Montana. The activities of the Iodine and Iodine Derivatives segment include the production of raw iodine, and the production of iodine derivatives and other non-iodine based chemical derivatives. The Montana segment includes the Atlantis Field project for the exploration and production of natural gas, iodine and water for use in various applications, and the Montana Water Depot project, which includes volumes of water retrieved, stored and shipped to customers in close proximity to be used mainly for fracking. It is also engaged in recycling of iodine using iodinated side-streams from waste chemical processes in Europe, North America and Asia. It’s Wellhead Extraction Technology (WET) and WET IOsorb methods enable the co-production of iodine from brine.

Iofina Plc. is a compelling ‘Buy’ at the current price level as the stock is surely undervalued in terms of valuation. The stock finished trading on the London Stock exchange on 3nd May at 12.8p a share, up by 1.8% compared to previous close. It seems that the stock would continue to rally as it has had its share of correction. The stock has been trading above its 20 day moving average (DMA), 50 DMA and 100 DMA of 10.9p. 10.3p and 9.9 p respectively. This is also a bullish indicator that the stock has surpassed the moving averages as well. In terms of technical analysis or charting, the daily chart has been making green marubozu candles which also points out towards the continuing rally of the stock. The immediate resistance for the stock is at 13.0p, any breakout above 13.0p would surely means fresh highs of the stock. Therefore, traders or investors need to keep an eye on the respective levels of the stock and accordingly initiate fresh positions. The weekly chart points out the formation of rounding top pattern which would be completed at 20.0p. Therefore, we set a short term target of the stock at 20.0p and the time frame to achieve this target would be 0 to 2 months. (Read more)

Topics: Analysis
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Premier Oil plc. is an independent exploration and production company with oil and gas interests in the North Sea, South East Asia, Pakistan, the Falkland Islands and Latin America. The Company is engaged in the business of upstream oil and gas exploration and production. The Company's operations are located and managed in six business units: the Falkland Islands, Indonesia, Pakistan (including Mauritania), the United Kingdom, Vietnam and the Rest of the World. In total, the Company manages approximately 760 million barrels of oil equivalent (mmboe). The Company has production rates of over 90 thousand barrels of oil equivalent per day (kboepd). The Company focuses on producing 68 to 73 kboepd. The Company's four-well North Falklands Basin campaign targets multiple stacked fans in PL004 and PL032 using the Eirik Raude rig. The Company owns an interest in over two licenses, such as Natuna Sea Block A and Kakap.

Premier Oil Plc. is a compelling ‘Buy’ at the current levels. The stock finished trading on the London Stock exchange on 1st May at 62.25p a share, up by 2.89% compared to the previous close. Currently the stock has been trading below its 20 day moving average (DMA). 50 DMA and 100 DMA of 63.0p, 64.4p and 73.0p respectively. In terms of charting or technical analysis, the stock has completed rounded bottom pattern formation twice at 60p. Therefore, 60p would likely to be a very strong support for the stock. Any move below 60p would surely indicate the further fall of the stock, but if stock would be able to sustain the support of 60p, and then it might be ready for up move. We would suggest traders or investors to initiate fresh longs if the support of 60p would be sustained. We see the short term targets of the stock at 68.0p and 72 p respectively. The time frame to achieve these targets would be 0 to 3 months. (Read more)

Topics: Analysis
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