| Sector |
Mining |
Last closing price
(08/03/2010) (p) |
1529 |
| 52 week High/Low (p) |
1558/247.7 |
| Market Cap (£bn) |
8.2 |
Sector weight age by
Market Cap (%) |
3.2 |
| Average Volume (mn) |
3.5 |
| P/E ratio (TTM) |
15.19 |
Sector P/E
ration (TTM) |
3.15 |
TTM: Trailing Twelve Month
Daily chart (KAZ.L)
Business background and investment rationale
Kazakhmys PLC is an international natural resources company with its main operations in Kazakhstan and the surrounding countries of Central Asia. The company’s principal engagement is copper mining but it also has interests in zinc; silver, gold, petroleum and power generation.
Improvement in production
2009 full year trading update published on 4 March this year, Kazakhmys’ copper cathode production was 320 kilo tonnes (kt) against a target of 300kt. Increased production at several mines, the use of stockpiled material, reductions of inventory, improvements in recovery rates and other efficiencies all contributed to the firm’s strong performance. Net copper production costs for the full year remain low at 72 US cents per pound compared to the 116 US cents per pound reported in 2008. In by-products, zinc concentrate production for the full year was 9% above the corresponding period in 2008, having benefited from processing stockpiled material and an improved zinc recovery rate from 63.8% to 66%.
Repayment of debt and loan facility
The group’s net debt position - which consists of cash, current deposits and borrowings - amounted to $689m in December compared to $1.398bn at 30 September 2009. Kazakhmys generated cash from operations including $1.084bn in dividends from ENRC PLC, before taxation and capital expenditure. In December 2009 Kazakhmys secured up to $2.7bn in loans from the China Development Bank Corporation to develop the Boschekul copper project. The project’s feasibility study will be completed by the end of 2010, allowing the development phase to commence in 2011 with the first production of copper in concentrate expected in early 2014.
Technical analysis
On the daily chart Kazakhmys completed a ‘V’ Pattern between 1160.0p and 1550.0p making a new 52 week high of 1558.0p, indicating a positive trend is forming in the stock. MACD (moving average convergence/divergence) is positive and 12 day EMA (exponential moving average) is above 26 day EMA, which indicates a positive trend for the stock. 14 day RSI (relative strength index) is above 60 indicating a positive trend supported by positive slope in MACD and RSI. Positive DMI (directional moving index) is above negative DMI, while ADX (average directional index) is near 18 indicating a rebound in stock prices. The stock is also above 20 day and 50 day EMA indicating a bullish signal for the stock. Stock has resistance near 1800.0p and support near 1350.0p.
Trading strategy
The stock can be bought around 1500.0p with a profit target 1673.0p and stop loss of 1424.8p
| Sector |
Oil equipment services and distribution |
Last closing price
(08/03/2010) (p) |
382.5 |
| 52 week High/Low (p) |
388.3/198.25 |
| Market Cap (£bn) |
2.03 |
Sector weight age by
Market Cap (%) |
18.05 |
| Average Volume (mn) |
1.91 |
| P/E ratio (TTM) |
18.52 |
Sector P/E
ration (TTM) |
62.49 |
TTM: Trailing Twelve Month
Daily chart (WG.L)
Business background and investment rationale
John Wood Group PLC is an energy services company operating in 46 countries, split across three business divisions: Engineering & Production Facilities, Well Support and Gas Turbine Services. The company provides a range of engineering, production support, maintenance management, industrial gas turbine overhaul and repair services to the oil & gas and power generation industries worldwide.
Resilient performance in Engineering & Production Facilities
In a full year result for 2009 announced last week, Wood Group performed in line with expectations for the year to date thanks to a continuing focus on production support, longer term capital projects, wide international spread and a high quality customer base. The group generated a $546m cash flow from operations, representing a 54% increase on 2008. The company also declared a second interim dividend of 6.9 cents, making a full year dividend of 10 cents, up by 11% on last year. The performance in Engineering & Production Facilities was driven by increased activity across all engineering sectors and continued strong demand for production facilities in the North Sea and international markets. Last month John Wood Group was awarded a long-term service and maintenance program to maximise machine availability of the gas turbines, compressors and generators for Peru LNG at its Pampa Melchorita site south of Lima. The deal is worth $150m over an 18-year term.
Growth through acquisition
Wood Group made three acquisitions to increase its presence in the Middle East, Africa and Asia-Pacific. The acquisition of Baker Energy Production Facilities established a market leadership position in the US Gulf of Mexico, expanding the group’s deepwater presence. It has significantly enhanced Wood Group’s capability and market position in Australia and Africa, which has resulted in an important contract win with Statoil in Brazil. In Power Solutions, Wood Group strengthened its Eastern hemisphere execution capability with the acquisition of Shanahan Engineering, a company providing power plant installation and commissioning and maintenance services to the power and industrial sectors. To further strengthen its proposition in the Middle East, Wood Group acquired Al-Hejailan Consulting, a Saudi Arabian engineering company, which has delivered an engineering and project management services presence in the oil, gas, chemical and power industries in the region.
Technical outlook
On the daily chart, stock has broken out from a tight range of 332.0p and 354.0p indicating a positive trend. Momentum oscillator MACD is positive and 12 day EMA is above 26 day EMA indicating strength in uptrend. RSI is also above 60 indicating uptrend supported with a positive trend in both the indicators. 14 day positive DMI is above 14 day negative DMI, while ADX is near 20 indicating rebound in prices. Stock has resistance at 400.0p, and support near 350.0p.
Trading strategy
Stock can be bought near 375.0p with a profit target of 418.2p and stop loss of 356.2p
Stocks Update
Chemring Group PLC
On the daily chart, Chemring continues in a positive trend after making a new 52 week high of 3450.0p just missing the profit target of 3457.0p. It is still above 20 day and 50 day EMA which suggests the short-term uptrend is still intact. MACD is positive and 12 day EMA is above 26 day EMA, indicating an uptrend in the stock. 14 day RSI is above 60 showing strength in trend. 14 day positive DMI is above 14 day negative, while ADX is near 29 indicating an uptrend. Stock should be a hold with the same profit target.
Imperial Tobacco Group PLC
Imperial is continuously in an uptrend with a new 52 week high of 2159.0p indicating it has broken out from a small channel of 1990.0p and 2090.0p. Trend for the stock looks positive as MACD is positive and 12 day EMA is above 26 day EMA, which indicates an uptrend. 14 day RSI is above 60 showing strength in trend. 14 day positive DMI is above 14 day negative DMI and ADX is near 27 indicating an uptrend in the stock. Stock should be a hold with the same profit target.
Fidessa Group PLC
On the daily chart, Fidessa hit the profit target of 1450.0p indicating an uptrend for the stock. MACD is positive and 12 day EMA is above 26 day EMA indicating an uptrend in the stock. 14 day RSI is above 70 and both the indicators are making an uptrend. 14 day positive DMI is above 14 day negative and ADX is above 35 indicating a strong uptrend. All positions should be closed for the stock.
Party Gaming PLC
On the daily chart, Party Gaming hit the profit target of 323.4p indicating a positive trend for the stock. Momentum oscillator MACD is positive and 12 day EMA is above 26 day EMA indicating a strong positive trend in the stock. RSI is above 60 indicating a positive trend. 14 day positive DMI is above 14 day negative DMI supporting the uptrend, while ADX is at 36 indicating a strong uptrend. All positions should be closed for the stock.
Aveva Group PLC
On the daily chart, Aveva is rebounding from its low of 1000.0p towards its 52 week high of 1112.0p, indicating the formation of an upward trend for the stock supported by trading above 20 day and 50 day EMA. MACD is positive and 12 day EMA is above 26 day EMA, also indicating an uptrend in the stock. 14 day RSI is above 60 supporting strength in trend. 14 day positive DMI is above 14 day negative DMI which indicates stock is in an uptrend. Stock has resistance at 1112.0p and support at 1000.0p level. Stock should be a hold with the same profit target.
Whitbread PLC
On the daily chart, Whitbread has broken out from the channel upside between 1344.0p and 1457.0p making a new 52 week high of 1496.0p. MACD is positive and 12 day EMA is above 26 day EMA, indicating an uptrend for the stock. 14 day RSI is also above 60 supporting upward movement. Positive DMI is above negative DMI, while ADX is near 16 indicating some consolidation. Stock is also trading above 20 day and 50 day EMA indicating uptrend for the stock. 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.
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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 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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