FUNDAMENTALLY APPEALING AND LEFT OUT Tyson Food is a consumer non-cyclical stock which has been left out of the "Trump" rally. Fundamentally appealing, defensive growth story (ROE 18.32%, 5yr rev growth 2.86%). The consensus has a BUY recommendation with 13% upside. Valuation is appealing, below market (P/E 13.9x).
TECHNICALLY INTERESTING FORMATION TO TRADE - Failed twice to break the historical high - Consolidated significantly on the back of disappointing earnings - Has formed a base off the 50% Fibonacci retracement of the major up-move initiated last year (see long term chart below) - Has broken out off a rounding top once - Is attempting to breakout again off another rounding top
MARKET TIMING COMPELLING FOR DEFENSIVE INVESTMENT The current market context provides uncertainty - Index up to historical high - At the same time, volatility is up from low levels - Rate rises knocking at the door - Speed of future rate rises yet unknown ==> Want to stay exposed to equities while managing risk ==> Buy defensive sectors/stocks with a clear fundamental and technical story
PLAIN VANILLA LONG INVESTMENT Buy at the current level TARGETS 64.37 / 72.00 / 77.00 STOP LOSSES 56.00 / 54.50 Main risk: Unfilled gap taking us to 54.00
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Excellent earnings published this morning. As per CNBC "The poultry, beef, and pork producer earned $1.59 per share for its latest quarter, above estimates of $1.26 a share. Revenue also beat Street forecasts. Tyson's earnings for the quarter were a record high, as was its operating margins. It also raised its full-year forecast above current consensus estimates." The news of a subpoena received by the company on Jan 20 regarding potential price collusion brought the shares closer to earth after they traded +8% pre-market. STAY LONG into this excellent report.
交易结束:到达止损
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This stock has done NOTHING in the past 2 months. There are better opportunities elsewhere. Suggest to exit now at the money (break-even) and move on.