China Animal Health: Wait for Pull Back

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Technical Analysis

China Animal Healthcare’s is currently still trading on an uptrend but this stock is reaching 3 years high.  

  • Currently ChinaAniH is testing the resistance at about $0.36. If this stock can stay above this level, the next resistance is at $0.43. Rolling PE at this level is 18.2.
  • If ChinaAniH fails to break this resistance, base on the chart, it is better to wait for ChinaAniH to pull back to between $0.30 to $0.32 (close to the uptrend support and 78.6% Fibonacci Retracement Support) for a safe entry for long term investment.

Fundamental Analysis

  • Current Price = $0.365
  • Current PE = 16.53
  • Rolling PE = 15.46
  • FY08 PE = 21.33
  • FY07 PE = 50.2

Refer to the previous Fundamental Analysis on this China Animal Heatlhcare.

My Rule for timing Entry and Exit Point (for reference)

  • Buy Near Support, Sell Near Resistance.
  • Never Chase a Stock Price.
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China Animal Healthcare: Up Trend Still Intact

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China Animal Health is still riding on the Fibonacci Fans nicely and the uptrend is still intact. Current level looks attractive to enter in view of the company’s core business and financial fundamental. In addition, Blackstone has also invested in this company recently and there was an insider bought about 31 million shares at about $0.30 to $0.31 in July 2010.

Financial Fundamental at a snapshot (base on FY2009)

  • Net Profit Margin = 36%
  • ROA = 19%
  • ROE = 21%
  • Current Ratio = 13.9 
  • Debt to Equity Ratio = Net Cash
  • Current PE of 14.2 is not expensive for a biomedical company.

Risks: The company fakes the financial report but I think the probability is low because Blackstone should have done a detail audit of this company before investing.

A good stock to hold for long term investment.

Continue ReadingChina Animal Healthcare: Up Trend Still Intact