| Sector |
Mining |
Last closing price
(11/01/2010) (p) |
1154 |
| 52 week High/Low (p) |
1343/345 |
| Market Cap (£bn) |
2.06 |
Sector weight age by
Market Cap (%) |
0.82 |
| Average Volume (k) |
632.43 |
| P/E ratio (TTM) |
68.06 |
Sector P/E
ration (TTM) |
8.34 |
TTM: Trailing Twelve Month
Daily chart (POG.L)
Business background and investment rationale
Petropavlovsk PLC is engaged in gold exploration and mining, and is currently involved in developing facilities at the Russian Pokrovskiy mine. The company operates in four divisions: gold mining, construction and other services, exploration and evaluation, and corporate.
Improvement in production
In an interim management statement announced in October 2009, the group’s total attributable gold production for the nine months ended 30 September 2009 increased by 29% compared to the same period in 2008, mainly due to the significant increase in production at the Pioneer mine. Pokrovskiy and Pioneer mines’ combined year-to-date gold production increased by 36% to 301,500oz compared to the same period in 2008. The second production line at Pioneer was successfully commissioned in September at 135,000 tonnes per month of ore (107% of design capacity). The group’s joint ventures and alluvial operations contributed a further 44,700oz year-to-date (compared to 47,300oz in the same period of 2008) in line with Petropavlovsk’s forecast. The company remains confident it will deliver its full-year overall target of 470,000oz of gold.
Increase in exploration & development activities
In October 2009 Petropavlovsk signed a binding cooperation agreement with Xuan Yuan Industrial Development Co. Ltd (XY-Group) for the joint development of the K&S iron ore project. The XY-Group will provide at least 70% of the project finance for the construction of the 3.2 million tonnes per annum (mtpa) stage 1 of the plant. This stage is expected to incur US$375m of capital expenditure. The group is also expected to commission Pioneer’s third line from August 2010 which will provide an additional capacity of 135,000 tonnes per month of ore.
Technical analysis
On the daily chart Petropavlovsk is trading above the positive trendline and is in a consolidation phase between 1000.0p and 1324.0p. It has broken its resistance level at 1200.0p indicating a positive trend is forming in the stock. This is supported by 20 day EMA (exponential moving average) crossing above 50 day EMA. MACD (moving average convergence/divergence) is negative but 12 day EMA has crossed above 26 day EMA on the daily chart, which indicates a positive trend is forming. 14 day RSI (relative strength index) is near 60.0 indicating a positive trend and the potential to move further upside. Positive DMI (directional moving index) is above negative DMI, while ADX (average directional index) is near 25 indicating uptrend. Stock has resistance near 1330.0p and support near 1000.0p.
Trading strategy
The stock can be bought around 1130.0p with a profit target 1260.29p and stop loss of 1073.3p.
| Sector |
Travel & Leisure |
Last closing price
(11/01/2010) (p) |
1403 |
| 52 week High/Low (p) |
1425/686.5 |
| Market Cap (£bn) |
2.47 |
Sector weight age by
Market Cap (%) |
4.51 |
| Average Volume (k) |
486.73 |
| P/E ratio (TTM) |
19.65 |
Sector P/E
ration (TTM) |
0.38 |
TTM: Trailing Twelve Month
Daily chart (WTB.L)
Business background and investment rationale
Whitbread PLC is a hotel and restaurant group managing several brands including; Premier Inn, Brewers Fayre, Table Table, Beefeater and Costa Coffee.
Expansion of Premier Inn and Costa Coffee
Premier Inn emerged as the UK’s largest and fastest growing hotel group after it opened 13 new hotels in 2009, incorporating 1,759 rooms plus five new pub restaurants on joint sites. In international expansion, Premier Inn opened its first hotel in Bangalore in India, while in 2009 Costa opened 154 stores in the UK and 22 internationally. Looking at the challenging macroeconomic conditions, Whitbread has decided to limit next year’s capital expenditure to around £170m for 2009/10 and intends to selectively deploy a limited amount of group property as an additional source of funding for expansion. Whitbread is on track to deliver the cumulative £25m in structural savings by the end of 2010/11 by outsourcing its logistics operation to Kuehne & Nagel.
Improvement in sales
For the 39 weeks to 26 November 2009, the Premier Inn budget hotel chain outperformed the wider hotel market, after the decline in like-for-like sales halved during the last three months. Regional revenue per available room (Revpar) at Premier Inn showed a reduction of 7.9% against the overall hotel market’s drop of 11.1%. The business account continues to attract customers with new users up 12% and many large national companies choosing to switch to Premier Inn driven by their search for value. Pub restaurants have achieved a robust performance with total full-year to date sales up by 6% and like-for-like sales up by 2% reflecting the strength of joint sites. Total sales achieved in Costa during the period are up 28.2%. Like-for-like sales are up 6.7% more than double the increase in the first half.
Technical outlook
On daily chart, Whitbread is trading near a 52 week high in a tight range of 1344.0p and 1417.0p after consolidating between 1200.0p and 1300.0p. MACD is positive and 12 day EMA has crossed below 26 day EMA, indicating consolidation. 14 day RSI is also consolidating above 60 supporting upward movement. Positive DMI is above negative DMI, while ADX is near 26 indicating uptrend Stock has strong support near 1344.0p and resistance can found near 1600.0p.
Trading strategy
The stock can be bought around 1390.0p with a profit target 1550.26p and stop loss of 1320.3p.
Fidessa Group PLC
Last week Fidessa hit the profit target of 1226.83p making a high of 1323.0p for the week and indicating a positive trend for the stock. MACD is positive and 12 day EMA is above 26 day EMA, indicating an uptrend is forming. 14 day RSI is above 60 and both the indicators are showing an uptrend. 14 day positive DMI is above 14 day negative indicating uptrend. All positions should be closed for the stock.
Kazakhmys PLC
Kazakhmys hit the profit target of 1516.8p after breaking out from a range of 1000.0p and 1300.0p. Stock is making a new 52 week high of 1558.0p which indicates a positive trend is forming. MACD is positive and 12 day EMA is above 26 day EMA which also indicates a positive trend. 14 day RSI is above 70.0 indicating an overbought signal. Positive DMI is above negative DMI, while ADX is near 23 indicating an uptrend. All positions should be closed for the stock.
Game Group PLC
On the daily chart, Game is in a consolidation phase near the 52 week low of 103.0p. Consolidation around this price from the last two weeks indicates that a bottom has formed in the stock, supported by MACD which is negative. However 12 day EMA has crossed above 26 day EMA indicating formation of an uptrend. 14 day RSI is above 30 and has rebounded from an oversold level, and 14 day negative DMI is above 14 day positive DMI indicating a negative trend. 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.
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Distribution of recommendations for the period 1st October to 31st December 2009:
| |
% Distribution of recommendations |
No of recommendation |
| Buy |
82% |
18 |
| Hold |
0 |
0 |
| Sell |
18% |
4 |
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.
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