Fresnillo plc : Looking for a support
Entry price | Target | Stop-loss | Potential |
---|
GBX 821 |
GBX 0 |
GBX 876 |
+100% |
---|
From a fundamental viewpoint, the security price reflects an over-valuation with P/E ratio at 28.7x for 2013 and at 23.6x for 2014. EPS underlines a real difficulty to generate cash. Fresnillo has disappointed investors with a high level of depreciation on profits. During the last 12 months, EPS for 2013 and 2014 has been depreciated by 65%.
Technically, the GBp 737 support is still far and we don't see any durable rebound before the contact with this area. The recent breakout of the GBp 902 support offers a new decrease potential.
Active investors can initiate a short position around the current price to target a contact with the support at GBp 737. A stop loss must protect the position at around 50% a the anticipated performance.
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