Boats and guns – what red-blooded trader could turn down Austal (ASB)? Despite reporting yesterday a (well-flagged) loss for 2016 its shares rose by almost 13%. Either traders took a “boys and their toys” approach, or investors are convinced that the US production misses were just a hiccough.
Indeed outside the US operations are ticking along. Given the missteps occurred on the first of a number of US combat ships, there may well be a return to profitability in 2017. Although Austal also deals with the private sector (ferries) its connection to Australian and US government spend mean it could be viewed as a more assured earner.
The chart is painting a more positive picture. After sliding to lows, then trading sideways, yesterday’s move looks like a break out, and possibly the start of a new uptrend. Traders may target the 2016 high at $1.66, although investors may look for a point nearer the 2015 high at $2.56.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.