Are We Seeing A Double Top?

Charoen Pokphand Foods Plc (CPF) was established in 1978 with operations in animal feed production, livestock breeding, further processing and trade. Currently, CPF invests overseas in nine countries, has subsidiaries in 17 countries and exports to over 40 countries. Furthermore, CPF is today the leading producer of feed and one of the largest producers of poultry in the world. Charoen Pokphand Foods is listed in the Stock Exchange of Thailand under the code: CPF.

Recently, we may be a seeing a possible “double-top” emerging for CPF, as shown in the graph below:

CPF.BK.jpeg

A double-top is confirmed if CPF’s share price breaks past key support point at $26.5. There is a significant support point at $17.4 (where a double-bottom was previously formed).

Fundamentally, at assumed required rate of return of 12.0%, our simple desktop analysis assigns an indicative equity value of $21.92 per share to CPF (which is  approximately: 30% discount to current market price of $28.50 per share):

FA_CPF_Feb17.png

Research houses have pegged a target price of between of $31.00-$42.00 per share for CPF:

Consensus.png

The above is a simple desktop analysis, without dwelling further into the company fundamentals. There may be potential trading opportunity for entry, should CPF trade between $21 – $26 per share.

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES MENTIONED IN THE ARTICLES.

Author: Ken Utau

Data Scientist, Markets Analyst and Food Lover

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