I first recommended Envestra (ENV) on the Ex Dividend date six months ago on 19 March 2012.
The stock is now up at 89 cents after having again gone Ex-Div today for 2.9 cents – representing a gain of 19.3% or 20.9% in six months, depending on when you bought after the recommendation.
Envestra has turned into a “Steady As She Goes Stock”.
The stock was trading at 80 cents on the Friday close 16 March when the buy recommendation was made and it fell back to 76 cents a few days later after going Ex-Div 2.9 cents. Readers could have easily accumulated the stock at 76c, 77c and 78c in the ensuing days and weeks that passed.
Envestra has since touched on support of 86 cents in intra-day trade and bounced. I have updated this in the chart below.
Target
I maintain my target of 96 cents, which is still another 7.8% higher, and a higher target of 98 cents, which is over 10% higher.
What is interesting, but not a target under my system yet, is a focus on $1.04, which is 16.8% more! Hopefully, as we see other global markets begin to stabilise – and Shanghai is now trading at 2,134 as I write, back up at my “danger levels” – we will see this “defensive stock” top out at the higher targets so we can rotate back into “risk on” asset selections.
Shanghai went up 3.8% on Friday from 2,052 the day before. This is HUGE and was very much needed.
Envestra Ltd (ENV) – 89 cents. (Stock went Ex Div 2.9c today)
Why do I like the chart?
The Stock has gone Ex-Div today for 2.9c, with no franking. Today – intraday at the time of writing, it has hit my support identified at 86 cents last week while on the Switzer program on Sky Business. It is good to accumulate on supports if I like the stock.
1) Support line at 86 cents – recommend to buy more.
2) After that pull back, expect it to go to 96 cents, or 7.8% higher.
3) Then to 98 cents or 10% higher.
4) An even higher target of $1.04 is almost a foreseeable possibility. This would be 16% higher. Not calling this yet, but nice the chart is so positive.
5) Price Action is still above the yellow line –ie, the 200-day moving average.
6) The stock yielded 3.4% dividend coming in October.
7) The 200-day moving average – the yellow line – is still pointing up.
8) The momentum is positive.
9) The company has a market Cap of $1.4 billion.
10) Lastly, an important consideration is not on the chart but on the company register. Cheung Kong Infrastructure Holdings, owns 19.5% of the company.
What I don’t like about the Chart?
1) The stock price is 14% above its 200-day moving average. This means it is susceptible to a pull-back in price as the stock has already run up quite strongly.
2) A stock that is regulated by a regulator as this one is, can be a bad thing. Shareholder interests and regulator interests are not aligned.
Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Anyone should consider the appropriateness of the information in regards to their circumstances.
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- Peter Switzer: ‘Cause two out of three ain’t bad
- Rudi Filapek-Vandyck: Special feature: How the GFC morphed into a GFZ
- Rudi Filapek-Vandyck: The broker wrap: BOQ, FMG and REX
- Tony Negline: Which death benefit option is best?