Engineering contractor impacted by unrest
The current unrest in the Middle East and North Africa will not do any favours to ground engineering contractor Keller Group (KLR):
Revenues from Continental Europe, Middle East and Asia account for about 37 per cent of Keller's £1.067 billion of group turnover.
Of course the Middle East will have a limited impact on the overall scheme of things but given the company's plans for projects such as in Saudi Arabia and UAE, any further delays will frustrate shareholder's patience.
The last set of results shows Keller trading at 37 times current earnings falling to 11 if profit target are met.
This is not bad at all if Keller can perform against the tide, not just economically but against sentiment which is seemingly against companies with exposure to the Middle East and North Africa.
As can be seen in the chart above, the 20 day exponential moving average has just intersected the 50 day exponential moving average to the downside and more significantly it is now trading beneath the 200 week exponential moving average.
Expect resistance at 680p, but otherwise initial support should come in at 580p, through here at 550p and ultimately at 500p.
Update
Tui Travel (TT.) suggested to sell at 237.1p, the shares closed at 239.4p following a investor support for its fuel surcharge to assuage extra costs thanks to the higher oil price. Cut the position if it closes above 260p but otherwise look for 200p.
Kazakhmys (KAZ) suggested to sell at 1448p. The stock closed yesterday at 1406p, under pressure from falling base metal prices and higher oil costs. Keep the stop based on a close above 1530p.
Mitchells & Butler (MAB)- 330.8p – the stock closed at 308.8p. Lower the stop to 330p: otherwise aim for a price objective of 290p.
Rank (RNK) – suggested as a sell at 126.5p – the stock closed at 129.9p yesterday after excellent results two weeks ago. Use the market's weakness as a way of exiting the stock with loss limitation in mind.
Debenhams (DEB) – suggested as a sell at 67.15p, the stock closed yesterday at 59.9p. Lower the stop to 64.5p as the stock is struggling to break through the 20 day exponential moving average or if the stock hits 56p, take profits.
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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