Fundamentally appealing, technically left out
FUNDAMENTALLY APPEALING AND LEFT OUT
Tyson Food is a consumer non-cyclical stock which has been left out of the "Trump" rally.
Fundamentally appealing, defensive growth story (ROE 18.32%, 5yr rev growth 2.86%).
The consensus has a BUY recommendation with 13% upside.
Valuation is appealing, below market (P/E 13.9x).
TECHNICALLY INTERESTING FORMATION TO TRADE
- Failed twice to break the historical high
- Consolidated significantly on the back of disappointing earnings
- Has formed a base off the 50% Fibonacci retracement of the major up-move initiated last year (see long term chart below)
- Has broken out off a rounding top once
- Is attempting to breakout again off another rounding top
MARKET TIMING COMPELLING FOR DEFENSIVE INVESTMENT
The current market context provides uncertainty
- Index up to historical high
- At the same time, volatility is up from low levels
- Rate rises knocking at the door
- Speed of future rate rises yet unknown
==> Want to stay exposed to equities while managing risk
==> Buy defensive sectors/stocks with a clear fundamental and technical story
PLAIN VANILLA LONG INVESTMENT
Buy at the current level
TARGETS 64.37 / 72.00 / 77.00
STOP LOSSES 56.00 / 54.50
Main risk: Unfilled gap taking us to 54.00
Tyson Food is a consumer non-cyclical stock which has been left out of the "Trump" rally.
Fundamentally appealing, defensive growth story (ROE 18.32%, 5yr rev growth 2.86%).
The consensus has a BUY recommendation with 13% upside.
Valuation is appealing, below market (P/E 13.9x).
TECHNICALLY INTERESTING FORMATION TO TRADE
- Failed twice to break the historical high
- Consolidated significantly on the back of disappointing earnings
- Has formed a base off the 50% Fibonacci retracement of the major up-move initiated last year (see long term chart below)
- Has broken out off a rounding top once
- Is attempting to breakout again off another rounding top
MARKET TIMING COMPELLING FOR DEFENSIVE INVESTMENT
The current market context provides uncertainty
- Index up to historical high
- At the same time, volatility is up from low levels
- Rate rises knocking at the door
- Speed of future rate rises yet unknown
==> Want to stay exposed to equities while managing risk
==> Buy defensive sectors/stocks with a clear fundamental and technical story
PLAIN VANILLA LONG INVESTMENT
Buy at the current level
TARGETS 64.37 / 72.00 / 77.00
STOP LOSSES 56.00 / 54.50
Main risk: Unfilled gap taking us to 54.00
Note
Excellent earnings published this morning. As per CNBC "The poultry, beef, and pork producer earned $1.59 per share for its latest quarter, above estimates of $1.26 a share. Revenue also beat Street forecasts. Tyson's earnings for the quarter were a record high, as was its operating margins. It also raised its full-year forecast above current consensus estimates." The news of a subpoena received by the company on Jan 20 regarding potential price collusion brought the shares closer to earth after they traded +8% pre-market. STAY LONG into this excellent report.Trade closed: stop reached
This stock has done NOTHING in the past 2 months. There are better opportunities elsewhere. Suggest to exit now at the money (break-even) and move on.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.