SMDS - DS Smith - Buy

[Johnfmt]

So if we look back at my chart from the 11th April you will SMDS paid off nicely for us hitting both targets.

Since then the company has moved into the FTSE 100 and has shown good growth over the last year. We have seen a small pull back to the 520 area after profits came in slightly lower than expected.

Technically the RSI & STOCH are shown oversold. Volume is steady at over 4m.

Looking at an entry above todays high. Stop at 500, TP 600.

 

https://uk.tradingview.com/chart/SMDS/h897pUFZ-SMDS-LSE-DS-Smith-Buy-Again/

 

This is just my opinion of the company and not a trade recommendation 

 

 

 

[rimmy2000]

it is true it has had a great run since 2009, anyone buying back then would have seen a 10 fold increase in their investment. I don't know much about the company, but thanks for posting this chart.

 

I would note that its operating margin is steady at about 6% average over the last 10 years but in the last three years it has managed to increase this to around 7-8% which is encouraging as demonstrates some pricing power.

 

I personally would not be buying now, I note the broker consensus has downgraded (although only slightly) and if it met FY18 PrTP target of £429.5mn then I'd say the price now is about right, with mcap at £5.5bn. Definitely something I'd look to buy a bit of in any market correction.

 

Appreciate your post on this, and any other insight into the co. you may have.

 

Rgds

[Johnfmt]

Nice analysis Rimmy, always good to get another point of view.

 

Price dropped on the open so it's now an invalid trade for me as I have a strict set of rules I use to enter a trade. Mostly based on technicals with a pinch of fundamentals. Looking at todays volume I would say it has found support but really I need to see a few more days of price action to really see where it is going. 

 

I do find you fundamental analysis interesting. I do a very basic scan through financial reports but nothing as in depth as yourself. I notice you use Sharepad as well. Great bit of kit.

[rimmy2000]

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Johnfmt wrote:

Nice analysis Rimmy, always good to get another point of view.

 

Price dropped on the open so it's now an invalid trade for me as I have a strict set of rules I use to enter a trade.

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saw that too, and wondered how you handled it. 

I think you have identified here a good co, but price seems to be about right (unless there are other acquisitions or other earnings-beating news I am not aware of.

 

Maybe have a look at SBRY, I think there could be a short term trade there