NEWS BITES ASIAN MARKETS
Lenovo Group Ltd. (HK:00992), Hong Kong's 2nd largest information technology company by market capitalisation, extended its slide Friday, shedding an additional 22.0c (or 2.8%) to close at HKD7.73. The shares have plummeted 99.0c (or 11.4%) over the past five trading days. Compared with the Hang Seng Index, which fell 134.5 points (or 0.6%) on the day, this was a relative price change of -2.2%.
Bearish Signals
Significant Downtrend
- The stock dropped on average volume falling for a fifth consecutive day.
- The stock's relative price strength percentile is slipping at 58 for 6 months, 50 for 3 months and 21 for 1 month.
- Falls to Rises: in the past month the number of falls outnumbered rises 13:7 or 1.9:1.
- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 8.27 minus the 26-day EMA of 8.32 is negative 0.05 suggesting a bearish signal. Both EMA prices are falling, another bearish signal.
- The price plummeted 11.4% in the last month.
Fundamental measures by comparison with the sector average [in brackets] indicate Overvaluation:
- Return on Assets 3% [6.2%].
Description | Value | Rank In Market |
Earnings Yield % | 4.6 | In Bottom Quartile |
Price Change % | -2.8 | In Bottom Quartile |
Price Earnings | 21.9 | In Bottom Quartile |
Net Profit Margin % | 1.6 | In Bottom 6% |
Bullish Signals
- The present value of HKD1,000 (PV$1000) invested one year ago is HKD1,175, including a capital gain of HKD149 and dividend reinvested of HKD26.
PV$1000 | 1-week | 1-month | 1-year |
00992.HK | 886 | 886 | 1,175 |
Hang Seng Index | 975 | 960 | 1,095 |
Fundamental measures by comparison with the sector average [in brackets] indicate Undervaluation:
- Price/Earnings of 21.9 [30.3]. We estimate the shares are trading at a current year P/E of 11.4 and a forward year P/E of 5.9.
- Price/Sales of 0.4 [1.8]. We estimate the shares are trading at a current year Price/Sales of 0.3 and a forward year Price/Sales of 0.2.
- Return on Equity 20.1% [16.5%].
- Return on Capital Employed 15.5% [11.4%].
- Dividend yield of 1.9% [0.8%].
Other Bullish Signals:
- The company is cash rich with Cash to Market Capitalisation at 36.2%.
- Interest cover defined by EBIT/I is 14.4 times. This indicates it is less leveraged.
- Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.7. Compared with the rest of the market the stock is undervalued.
Description | Value | Rank In Market |
MCap | US$10.4 billion | In Top 5% |
Cash to MCap % | 36.2 | In Top Quartile |
Price to Sales | 0.4 | In Top Quartile |
Return on Equity [ROE] % | 20.1 | In Top Quartile |
EPS Growth % | 66.7 | In Top Quartile |
Note
Beta: the Beta of this stock is 0.6. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.
- It is at a discount of 14.8% to the 12-month high of HKD9.07 on 01 Mar, 2013. It is also at a premium of 44.5% to the 12-month low of HKD5.35 on 01 Aug, 2012.
AGGREGATE VOLUMES, PRICES AND TURNOVER PERIOD [Volume Index or VI in brackets; 1 is average]
