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CORONATION FUND MNGRS LDCORONATION FUND MNGRS LDCORONATION FUND MNGRS LD

CORONATION FUND MNGRS LD

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CML trade ideas

Coronation no Funeral FlowerOnce one of the darlings listed on the JSE, Coronation has been on a slippery downward slope since December 2014. The reasons for this have been twofold. Firstly, valuations were extremely stretched (end of 2014), trading at a market capitalization (mkt cap) to Assets Under Management (AUM) percentage of close to 7%, while the average international ratio (for global Asset Managers) was trading at around 2%. Secondly, Coronation's growth prospects are questioned in a South African market, which has seen the entry of more competitors and the growth of a passive (ETF) market. At the current (mkt cap/AUM) ratio of 2.59%, Coronation is looking quite cheap compared to international counters: XETR:ALV 4.6% NYSE:BK 2.6% NASDAQ:TROW 2.8% Add into this mix a Forward PE (Source: Thomson Reuters) of 11 times and a Forward DY of 9%; then you get an opportunity in my view. We can clearly see the Descending Triangle in the share price movement that developed since the April that could be very positive for CML, should we see a break and close above the resistance level at R44.25. A break a close above these levels could see the price seeking resistance at both the 50- and 200-day moving averages at R46, with next target then becoming R47.25. The share price currently finds itself in extreme oversold according to its 14-day RSI. It has also massively underperformed the $JALSH over rolling 12 month period. For short-term traders, I would recommend a stop-loss at R39.35. Consensus target price (according to Thomson Reuters) for Coronation is R44.82 but only covered by one analyst (Avior Capital Markets).
JSE:CMLLong
by SchalkLouw
$JSECML - from Zero to Hero!#Coronation YTD performance is currently 29.6% & remaining one of my favorites. It recently had a nice breakout, with moving averages looking friendlier. Both 5yr & 10yr Market Cap/Assets under Management % still indicate the company to be on cheaper side but getting close to fair value relative to International Asset Managers. Technically the trend is getting a lot stronger. The share price however is however trading extremely overbought according to its 14 day RSI. Should the share price take a bit of a breather, first support level could be both the 200-day moving average & the top parallel trendline at R49.03. Should we breakthrough those level, next supporting levels could be R46 and then the 50-day moving average R44.13 (stop loss). I’m however still positive about $JSECML over the longer term and still eyeing that 0.382 Fibonacci retracement level at R57.02. That correlates quite nicely with the current Thomson Reuters consensus target price of R56.80 on the company.
JSE:CML
by SchalkLouw
$JSECML...a recovery on steriods currentlyGreat recovery coming from Coronation, with another +/- 5% run again today, bringing the YTD performance now to double-figures. After the 20-day moving average broke above the 50-day on the 4th of March, the trend definitely became a bit stronger and now look a lot healthier. The 14-day RSI is closing in on the 70 mark, which does place the share now close to short-term “oversold” territory. I’m however already long, with a longer view on the company. I’m therefore not going to be too phased about any short-term noise for now. My target for now is both the 200-day moving average at R50.25, which is also the 0.236 Fibonacci retracement resistance level. A break above this level, could see us test R57 again. Should we see a reversal in the trend, my first alarmbell will ring at R41.50 (50-day moving average), with huge horizontal support at R39.15. A break below this level does spell serious trouble, with the diagonal trend line at R36.25 then coming into play. I’m still happy with the Thomson Reuters consensus target of R54 and with a historic Dividend Yield of 9.7% currently, I’m still very happy with this position.
JSE:CMLLong
by SchalkLouw