Lamprell PLC
What is also supportive for the shares is the net tangible asset value of 75p. This doesn’t guarantee that the stock will not fall through this on any more bad news or issues over the debt covenant waiver, but it is noticeable that the shares twice found support (with heavy volume) just shy of here in the late 60’s. The company is a global leader within its industry, and the sector within which it operates is a growing one.
These are attractive business attributes to a potential acquisitor. The fact that there has been no mention of a dividend cut, as yet, although we wouldn’t rule this out. The current yield if the divi is maintained is slightly in excess of 10% — a nice cushion whilst management sorts out the operational and cost cutting issues.
Technical Overview
Lamprell Chart Looking at the chart, we can see that the stock recently plumbed the depths seen at the nadir of the 2008-09 bear market where it hit a low of 56p. The shares bounced twice off the 67p level during May and June of this year, and we can also see that the RSI measure is as oversold currently as in the March 2009 trough — hovering around the 30 level. A natural medium term target is the 200p level which would also coincide with around a 50% retracement of the fall from 360p.
September 2012 | www.financial-spread-betting.com | 19