| Sector |
Mining |
Last closing price
(19/10/2009) (p) |
299.5 |
| 52 week High/Low (p) |
323.9/76.49 |
| Market Cap (£bn) |
2.34 |
Sector weight age by
Market Cap (%) |
0.618 |
| Average Volume (mn) |
3.04 |
| P/E ratio (TTM) |
- |
Industry P/E
ration (TTM) |
60.2 |
TTM: Trailing Twelve Month
Daily chart (AQP.L)
Business background and investment rationale
Aquarius Platinum Limited is engaged in the exploration, development and acquisition of platinum group metals (PGM) including: platinum, palladium, rhodium and gold. It has PGM mining and exploration operations in South Africa and Zimbabwe, with administration functions in Australia and Bermuda.
Improvement in production
In a full year result announced in August 2009, total PGM mining production for the year increased by 1% to 847,283 PGM ounces despite the temporary suspension of Everest in December 2008. Revenue in the second half of 2009 was $32m higher than in the first half of the year despite lower production, reflecting a return to improved PGM prices. The group’s existing operations are expected to continue to increase production in FY2010 following the conclusion of the Ridge Mining acquisition. It is expected that Ridge Mining’s Blue Ridge mine will start contributing towards group production from Q1 in this current financial year. Blue Ridge is expected to deliver approximately 125,000 PGM ounces – of which Aquarius' share is 62,500 PGM ounces - once steady production is reached.
Reduction in debt and capital restructuring
Aquarius has responded decisively in turbulent markets and delivered an aggregate 13% production improvement across all its current operations. Consequently, it has managed to reduce the half year net loss of $70m announced in February 2009 to $45m by year-end. The group’s cash balance at 30 June 2009 was $153.6m. To restructure its capital base Aquarius raised $270m which came from a $118.5m equity placement, a $73.5m rights issue and a convertible bond issue worth £78m.
Technical outlook
On the daily chart, Aquarius is consolidating between 244.0p and 316.0p, with a higher low indicating strong uptrend. MACD (moving average convergence/divergence) is positive and 12 day EMA (exponential moving average) is above 26 day EMA, indicating upside trend is still intact. 14 day RSI (relative strength index) is above 50 showing strength in trend. ADX (average directional index) is below 20 indicating consolidation with 14 day positive DMI (directional moving index) above 14 day negative DMI indicating positive trend. Stock is also above 20 day and 50 day EMA which supports strength in trend. For a higher move stock has to move above 300.0p. The stock has resistance near 316.0p with support near 280.0p.
Trading strategy
The stock can be bought around 294.0p with a profit target 327.89p and stop loss of 279.26p (Hedge position: short position in spread betting with £4.24 bet per point).
| Sector |
Technology hardware & equipment |
Last closing price
(19/10/2009) (p) |
157.7 |
| 52 week High/Low (p) |
161.7/75.75 |
| Market Cap (£bn) |
1.94 |
Sector weight age by
Market Cap (%) |
36.29 |
| Average Volume (mn) |
6.18 |
| P/E ratio (TTM) |
43.7 |
Industry P/E
ration (TTM) |
70.2 |
TTM: Trailing Twelve Month
Daily chart (ARM.L)
Business background and investment rationale
ARM Holdings PLC designs microprocessors, physical library solutions (physical IP) and related technology and software. It also sells development tools.
Growth in mobile & non-mobile applications
In a first half result announced in July 2009, ARM technology-based chips continued to gain market share in both mobile and non-mobile applications. The average number of ARM technology-based chips per mobile handset increased to two from 1.8, driven by the increasing sophistication of mobile phones. ARM signed nine new processor licenses for mobile devices following continued demand for the latest ARM technology. ARM also signed eight new processor licenses for a broad range of markets such as digital TV, microcontrollers, toys, touch screen controllers and secure storage. ARM continued to gain share in non-mobile end-markets, such as microcontrollers. Despite industry shipments of microcontrollers being down 35% in Q1 2009, the number of ARM technology-based microcontrollers shipped only declined by approximately 25%.
Upbeat outlook
ARM expects trading performance in the second half of 2009 to improve as demand for its latest technology remains robust. This positive outlook is driven by customers’ high interest in licensing Cortex(TM)-A processors for smartphones and mobile computing, Cortex-M processors for microcontrollers and physical IP technology for advanced process nodes. ARM expects full-year 2009 dollar revenues to be at least in line with current market expectations.
Technical Outlook
On the daily chart, ARM has doubled from 2008’s October low and is trading above the trendline joining the October 2008 low, which indicates the long-term positive trend is intact. Momentum oscillator MACD is positive and 12 day EMA is above 26 day EMA indicating strength in trend. RSI is near 70 indicating strong positive trend. 14 day positive DMI is above 14 day negative DMI and ADX is near 47 indicating strong uptrend. Stock has to consolidate above 150.0p for an uptrend, with support near 140.0p.
Trading strategy
Stock can be bought near 154.0p with a profit target of 171.75p and stop loss of 146.27p (Hedge position: short position in spread betting with £8.11 bet per point).
WS Atkins PLC
On the daily chart, WS Atkins is still trading in a tight range of 600.0p and 670.0p with MACD still negative, while 12 day EMA has cross above 26 day EMA indicating uptrend is forming. 14 day RSI is above 50 showing some strength in trend. 14 day negative DMI is above 14 day positive but falling and ADX is near 20, both of which indicate consolidation. Looking at the lack of trend, stock should be a hold with a same profit target of 665.0p.
Imperial Tobacco Group PLC
Imperial’s close above 1800.0p last week indicates trend for the stock is positive as MACD is positive and 12 day EMA is above 26 day EMA. 14 day RSI is above 60 showing strength in trend. 50 day EMA is still above 200 day EMA supporting an uptrend. 14 day positive DMI is above 14 day negative DMI and ADX is near 20 indicating constant rise in the stock. Stock should be a hold with the same profit target of 1900.0p.
Babcock International Group PLC
On the daily chart, Babcock is rebounding towards its recent high of 598.0p indicating that an upside breakout is near. MACD is positive and 12 day EMA still below 26 day EMA with difference closing up, indicating uptrend forming. 14 day RSI is above 60 which indicates strength in trend. Positive DMI is above negative DMI which indicates a positive trend. Stock should be a hold with a profit target of 630.0p.
GlaxoSmithKline PLC
On the daily chart, GlaxoSmithKline has breakout from resistance 1250.0p indicating uptrend. MACD is positive and 12 day EMA has just crossed above 26 day EMA indicating a recent price rise.14 day RSI is above 60 indicating strength in trend.14 day positive DMI is above 14 day negative DMI and ADX is near 26 indicating uptrend. Stock should be a hold with the same profit target.
Logica PLC
On the daily chart, Logica hit stop loss of 132.3p indicating stock is moving in a positive direction. MACD is positive; and 12 day EMA is still below 26 day EMA, indicating weakness in uptrend. 14 day RSI is below 60 indicating strength in trend. Positive DMI is above negative DMI with ADX rising, indicating a positive trend. All positions should be closed for the stock.
Serco Group PLC
On the daily chart, Serco hit a new profit target of 545.0p with MACD positive, and 12 day EMA above 26 day EMA indicating uptrend. 14 day RSI is above 60 showing strength in trend. 14 day positive DMI is above 14 day negative DMI which indicates uptrend is intact. All positions should be closed for the stock.
Fidessa Group PLC
On the daily chart, Fidessa has breakout from its upside range of 1200.0p with MACD positive and 12 day EMA above 26 day EMA, indicating an uptrend. 14 day RSI is at 66 showing strength in trend. 14 day positive DMI is above 14 day negative and ADX is near 20 indicating consolidation. Stock is also above 20 day and 50 day EMA which supports strength in trend. Stock should be a hold with new profit target of 1310.0p
Bellway PLC
On the daily chart, Bellway is consolidating above 800.0p which is quite encouraging. Momentum oscillator MACD is negative and 12 day EMA is above 26 day EMA indicating uptrend forming. RSI is near 50 indicating strength in trend. 14 day negative DMI is above 14 day negative DMI but the difference is declining which indicates consolidation. Stock has resistance at 900.0p and support near 720.0p. Stock should be a hold with the same profit target.
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This report has been issued by CSS Partners LLP (“CSS Partners”). CSS Partners is an appointed representative of Charles Street Securities Europe LLP (“CSS”) which is authorised and regulated by the Financial Services Authority in the UK. It constitutes non-independent “investment research” as contemplated by the FSA Rules and is thus considered a marketing communication. This report was prepared by Kuldeep Bhati who is employed as an analyst at CSS Partners and as such does not conform with the FSA definition of independent investment research and as such is not subject to the rule of not dealing ahead of distribution of the marketing communication and was not prepared in line with the legal requirements for independent communication.
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Risk Factors
There is no certainty that the recommendations will be successful or that they will make money for investors.
There is no certainty that execution prices can be achieved, either in opening or in closing a position.
There is considerable risk operating in equity, futures, options and spread betting markets and investors need to be able to sustain a total loss of capital along with unlimited liability. Potential investors are recommended to consult a financial adviser before entering into such positions.
Regulatory disclosures
In accordance with the Conduct of Business Rules COBS12.4.7R (i) in the preparation of the report the analyst used price and volume charts provided by independent data suppliers and applied technical analysis tools of investment and trading evaluation in arriving at his recommendations, ii) all recommendations made by the analyst are followed up in subsequent reports until the closure of a position, iii) there is no certainty that any recommendation will be successful or that technical analysis should be used exclusively to arrive at investment decisions.
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CSS, CSS Partners and their respective officers, directors, shareholders and /or partners may have a shareholding in the companies reviewed in this report. They will not have access to this report until it is published, except those responsible for compliance issues concerning this report.
The research analyst responsible for the content of this research report certifies that: the views expressed and attributed to the research analyst or analysis in the research report accurately reflect his personal assessment about the subject securities and issuers and/or other subject matter as a appropriate and no part of his compensation was, is or will be, directly or indirectly related to the specific recommendations or views contained in this research report. On a general basis, the efficacy of recommendations is a factor in the performance appraisals of analysts.
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Distribution of recommendations for the period 1st July to 30th September 2009:
| |
% Distribution of recommendations |
No of recommendation |
| Buy |
81% |
21 |
| Hold |
0 |
0 |
| Sell |
19% |
5 |
The first column displays the % distribution of recommendations made by CSS Partners in this Technical Analysis Trading programme and the second column shows the numbers of such recommendation. Neither CSS nor CSS Partners has any investment banking relationships with any of the companies covered in the Technical Analysis Trading Programme, namely the companies in the FTSE 350 index.
Your attention is also directed to the terms of our client agreement with you that covers the provision of this service. To the extent that there is any conflict between the above and the client agreement, the provisions of the above disclaimer will take priority.
