Results Update

Jobst has just announced its results for QE31/3/2010. Its net profit increased by 39% q-o-q or 53% y-o-y to RM8.7 million while turnover increased by 19% q-o-q or 27% y-o-y to RM27.6 million.


Table 1: Jobst's last 8 quarterly results


Chart 1: Jobst's 27 quarterly results

Valuation

Jobst (closed at RM2.03 yesterday) is now trading at a PER of 21 times (based on last 4 quarters' EPS of 9.6 sen). At this multiple, Jobst is deemed fairly valued.

Technical Outlook

From the daily chart (Chart 2), Jobst appears to be trapped in a symmetrical triangle ('ABC'). While the share price broke to the upside of that triangle yesterday, the breakout was on thin volume. It must also be noted that a breakout at the apex of a triangle (denoted as 'C') is prone to fail- be it an upside breakout or a downside breakout. From the weekly chart (Chart 3), we can see that Jobst had a sharp jump from RM1.45 to above RM2.00 over the past 3 months. As such, the stock is likely to continue to consolidate its recent gain before the next price movement is revealed.


Chart 2: Jobst's daily chart as at May 18, 2010 (Source: Tradesignum)


Chart 3: Jobst's weekly chart as at May 18, 2010 (Source: Tradesignum)

Conclusion

Based on continued improvement in its top-line & bottom-line, Jobst is a good stock for long-term investment. However, the stock may consolidate at the RM2.00 level for a while longer after its recent sharp rise.