Review on Plastics. Technically weak sector. Bargain for long term?
Recently going through stocks in Plastic sector, i found 8 interesting stocks to review and i found them quite good for long term. Most of the stocks saw increase in stake by either promoters or Mutual funds or both in last quarter. With good growth seen in the future, Will the stocks be able to pullback and break resistance at higher prices?
|Stock||Price||Trailing PE||Price to Book||Rating||Target 1||Target 2||SL|
Supreme Industries: Share price 996; Target 1125.
Decent correction from 52 week high for the stock. We are not happy with the price to book at 6.6, but considering the growth prospective and good . We will valuate the stock to have a PE of 30. At 30x annualized recent quarter EPS, our target is close to 1080-1120 in 3 months. Technically the stock will face resistance at 1120-1150 in the upside.We see the stock at 1500 in less than 18 months. We have seen Mutual funds increasing stake in the company.
Wimplast: Share price 729; Target 1000.
Wimplast is another stock that has almost come down 50% from 52 week high. Recent quarterly results were not that good. Stock is technically weak on both daily and weekly charts, but has a good chance to pullback towards 950 and 1000. Stock is trading at trailing PE of 20 and Price to book is at 3. Mutual funds have seen increasing stake in the company. Any good results will help the stock move towards 1000. We expect this to happen in 6 months.
Nilkamal: Share price 1540; Target 1700.
Nilkamal with Trailing PE of 18 and Price to book of 2.88 looks good for long term accumulation. Stock is testing crucial support at 1500-1530. It can slip towards 1300-1330 technically below that. We like the stock for long term. We have a target of 1700 and 1950 in 6 months and 1 year respectively. We have seen Mutual funds increase stake in the company in last 3-6 months.
Mold-tek Packaging: Share price 270; Target 310.
Mold-tek Packaging is another fundamentally good stock. We like the stock at 270. Stock trades at 25x earnings and 4.3x book. Stock is finding good support on weekly charts at 250-270. You can accumulate here for a target of 310 and 360 in 3 months and 1 year respectively. Stock will find resistance at 310-325 due to 200 EMA on daily technical chart. Above 310-325, stock can rally to 360 easily. We have seen Mutual Funds increase the stake in last 3- 6 months.
Multibase: Share price 469; Hold.
You can hold or reduce Multibase for next 3 months. A fundamentally strong company as posted below par quarterly results. We would wait for a technical entry at oversold levels or wait for a good quarterly result to enter the stock. Stock trades at 31x trailing EPS and 7 times book.
Cosmos Films: Share price 225; Target 320.
Cosmos Films trades at 8x EPS and 0.7 x book. Stock is beaten down technically. We have seen Promoters increase the stake in last 3 months. Recent quarterly results has been good. The current ratio is less than 1 and is concern. It can cause the company to show irregular profits in quarterly results and also makes it difficult to evaluate a company on a smooth basis. We expect the stock has bottomed out and should pullback towards 260 and 320 in a year. Its a risky bet against the moving averages.
Mayur Uniquoters: Share Price 400; Hold; Target 440.
Mayur Uniquoters is a fundamentally strong stock quoting at 25x Trailing EPS and 4 times book. Recent quarterly result has been decent and we expect strong growth in the company. Since Mutual funds has reduced stake in the company while increasing stake in other stocks, we would like wait and watch for better results and technicals.
Plastiblends: Share price 210; Target 258.
Plastiblends is a good value stock compared to its peers. Stock is trading at 15x trailing EPS and 2.2 times book. Stock has good recent quarter. Promoters have increased stake and DSP Blackrock mutual funds are buying this stock for last 6 months. Technically stock is taking good support of 200 EMA in weekly charts and has resistance at 215-225 on daily charts. Above 225, stock will comfortably move towards 258 and 310 in 3 months and within 1 year respectively.
Most of the stocks seems to be technically weak. Considering the Fundamental strength and growth of the stocks, increasing stake of Supreme Ind, Nilkamal, Mold-teck packaging & Plastiblends would be considered wise. Cosmos Films will be our value and contra pick. Wimplast can be bought for a short term pullback.
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