Empire Company Limited is a Canadian company whose key businesses include food retailing and related real estate. Since the privatization of Sobeys, Empire has focused on food retailing and related real estate as never before. Today, these businesses generate more than 98 percent of sales and 95 percent of operating earnings. Today, the company has a low valuation, suggesting a continuation of prices above the significant technical levels being tested.

According to Thomson Reuters consensus from the latest estimates of analysts, the share is trading 11.32 and 10.55 times expected EPS for the current year and the following year. In terms of enterprise value, that is to say the capitalization of the group plus net debt, for a price of CAD 56.95, the company is worth 0.25 time its sales. Except in case of strong downward revisions of earnings estimates, these low valuation levels theoretically limit the potential fallback.

In the short term, Empire is in an uptrend. The security crossed the CAD 56.6 resistance and all moving averages, which is in a strong bullish element. The 20-day moving average started a new increase. It may help the stock to reach soon the former CAD 59.6 resistance and hope a new test of the CAD 63 resistance.

Investors could take a long position at the current price in Empire and benefit from the bullish trend. A first objective may be fixed close to the CAD 59.6 resistance. A stop-loss order could be fixed below CAD 53.5.