If you didn't know which company this was, would you buy?Would you buy purely on the technicals not knowing what stock this is? It's tempting!
Looking at a long-term monthly chart over a 30+ year time frame you can see each time RSI reached the 32.6 level this stock has bottomed. The large time frame over which this has been observed strengthens my confidence that this could be yet another bottoming for this stock.
The last four instances dividend yield has peaked above the current 7.88% annual dividend yield, this has also corresponded with a major bottom for this stock.
On a weekly frequency, the MACD MAs have been establishing a series of higher lows further confirming a long-term bottom is forming.
Lastly, the 200 Monthly EMA has been a strong support line over this 30+ year time frame. It looks as if the 200 EMA has held once again and price is now working it's way up of this support area.
From a purely technical perspective, I would buy this stock. Even if this stocks hovers sideways along its 200 Monthly EMA there is a nearly 8% dividend to collect.
With all that said, I do think this is a controversial stock but I think there's a compelling fundamental story too. Gross margin % and operating margin % have been steadily increasing over this long time period. There are also new frontiers (such as cannabis $CRON) which have the potential to be profitable investments in the long-run. However, Juul is an example that hasn't worked out well and resulted in losses for the company. The company currently trades at 9.41 full-year forecasted earnings and price-to-sales ratio of 3.85.
I still think this is an opportune time to get in at cheap valuations supported by technicals meanwhile collecting a large and sustainable dividend.
