Dear all,
This week, Sembcorp marine (“SMM”) caught my attention amid positive industry reports and its strengthening chart. I have started to accumulate SMM with my usual take profit target of a few bids, if any.
Let’s look at the basis, and importantly, the investment risks.
Basis
a) Analysts are turning positive
Based on Figure 1 below, average analyst target price for SMM is around $1.93, representing a potential capital appreciation of around 12% from the current price $1.72. It is noteworthy that JP Morgan has turned positive on SMM last month with a target price of $2.10, after six years of underweighting SMM.
Figure 1: Ave analyst target $1.93
Source: Bloomberg 26 Apr 19
b) Chart is supportive
Based on Chart 1 below, SMM breached its trading range $1.60 – 1.72 on 23 Apr 2019 and touched an intra-day high of $1.81 on 24 Apr 2019. With
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