New transport firm boss has his work cut out
Keep an eye on transport company Go-Ahead Group (GOG), after the stock recorded a dead-cross yesterday:
Go-Ahead is scheduled to release its interim results on 25 February, so this idea should be treated with caution given that it is in the interest of any board of directors' to surprise on the upside.
The company has already stated that its interims should be slightly ahead of previous expectations and that it sees growth in both its bus and rail operations.
Go-Ahead trades on a price to earnings ratio of 10.13 which is forecast to increase to 11.13 possibly due to an increase in capital expenditure and a challenging year for its services. Net debt at £88 million seems manageable for the £545 million company.
The market seems a bit shy about the recent appointment of Keith Downs as its new chief financial officer (CFO) after his predecessor Nick Swift handed in his notice to join British Airways.
Keith Downs did a good job as the CFO at JD Wetherspoons but may be perceived to have his work cut out in a completely different industry.
Primarily this idea was generated from the fact that the stock had recorded a dead cross, yet fundamentally it looks in pretty good shape, so this idea is high-risk given the conflicting schools of analysis.
A close above 1365p would signal that the idea hasn't worked, but if the charts turn out to be correct, I would be looking for an initial price objective of 1100p.
Update
Rank (RNK) – suggested as a sell at 126.5p – the stock closed at 130.9p yesterday keep the stop based on a close above 140p – the company is likely to release a preliminary report around 25 February.
Debenhams (DEB) – suggested as a sell at 67.15p, the stock closed yesterday at 66.3p. Keep the stop based on a close above 73p.
McBride (MCB) – suggested to sell at 160.6p, the shares closed yesterday at 139.6p. Probably the worst is over as the company reported its preliminary results yesterday. Continue to hold for now but lower the stop to 145p.
Aquarius Platinum (AQP) – suggested to sell at 338.5p, the shares closed last week above 370p and should have been closed.
Intertek (ITRK) – suggested to sell at 1799p, the shares closed at 1806p. The downtrend is just about intact so hold for now but keep the stop at 1900p.
Randgold Resources (RRS)– suggested to sell at 5770, the shares have drifted to 5125p: keep the stop at 5260p – the Ivory Coast situation coupled with the uneasy tensions in Egypt are not ideal for the Pan-African gold miner.
The writer does not hold any shares or derivatives in the above mentioned companies. The material for this report comes from Sharescope.
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