The recent plunge of Q&M Dental Group is expected as the stock has been climbing up very fast for the past two months from $0.39 to $0.60, a whooping 54% increase in two months! Whatever goes up fast, it come down as fast!
In addition, Q&M is over value at current price ($0.51) where the PE is still at 36.6. It is expected Q&M stock price will go down further base on TA and current PE. Q&M has punched through 20D MA support and the next immediate support is at $0.49 (61.8% Fibonacci Retracement Level). If Q&M cannot hold at $0.49, the stock may go down to as low as $0.369 (23.6% Fibonacci Retracement Level) as there are no obvious supports between $0.369 to $0.49 base on the past history.
Fundamentally Q&M Dental Group is a good stock for long term investing base on the core business in dental services. In addition, the JV to China dentist medical field is a very good strategic move for future business expansion as Chinese government wants to improve the medical services in China. The financial looks good to me too:
- Net Profit = 13%
- ROA = 13%
- ROE = 15.7%
- Current Ratio = 5
- Debt to Equity Ratio = Net Cash
Basically I am waiting for a right entry level when the stock reaches the bottom and starts reversing.