Fundamentally appealing, technically left out
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
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
Commentaire:
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.
Trade fermée: ordre d’arrêt atteint:
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.
