Materion Corp (MTRN; $2B market cap; $10M ADV)is a manufacturer of high-performance engineered materials for electrical and electronic applications. It is being driven by strong demand from several key end markets, including semiconductor, automotive, industrial, aerospace, and defense. The company continues to see strength in its organic pipeline and good underlying demand across all of its end markets. Materion has raised its revenue guidance from all segments except energy and raised its FY21 EPS guidance to $3.00, an increase of 55% y/y at the mid-point. The stock is breaking out of a stage-two cup-with-handle base on below-average volume. It is trading above its key moving averages and is close to an all-time high. The stock has a strong fundamental profile, with an EPS Rank of 85, Composite Rating of 90, and SMR Rating of C.
Author: Sambit Mohanty
Shimao Services Holdings
Key points from this report:
- The stock recently broke out from a stage-two flat base on constructive volume.
- Fundamental profile: Composite Rating 63, SMR Rating B. EPS is expected to grow 65% and 62% in 2021 and 2022, respectively.
- RS line is trending at all-time highs with RS Rating stable at 79.
Chailease Holding
Key points from this report:
- The stock is breaking out of a stage-one flat base.
- Strong fundamental ratings: SMR Rating A, Composite Rating 95, EPS Rank 85.
- Technical ratings: RS Rating 85, Up/Down Volume ratio 1.5, A/D Rating B-.
Banco BTG Pactual
Key points from this report:
- The stock is breaking out of a 14-week cup base.
- Fundamental ratings: SMR Rating A. Composite Rating 85. EPS Rank 72.
- Technical ratings: RS Rating 85. Up/Down Volume ratio 2.1. A/D Rating B+.
- Institutional sponsorship increased 79% y/y to 1,081 funds in March.
Balkrishna Industries
Key points from this report:
- Buy Balkrishna Industries on a low volume pullback to its 10-DMA. The stock broke out of a stage-two cup base ahead of results and is extended following a 10% gain on 7x volume today.
- Q4 FY21 revenue and EPS were ahead of estimates. For FY22, it guided for low-teens sales volume growth at the mid-point.
- Strong demand from agriculture and mining is driving volume growth for the company.
- It has further room for price increases. Its products are priced at a 20% discount compared with its peers. The company expects to reduce its price gap to 12-15% in the next few years.
- Vertical integration has helped it maintain a 20%+ pretax margin over the last five years. It expects to maintain 28-30% EBITDA margin in the long term.
- Good fundamental ratings: EPS Rank of 91 and SMR Rating of A.
- Technical ratings: RS Rating of 61 and A/D Rating of B. RS line is making a new high after moving sideways since July 2020.
Asian Paints
Key points from this report:
- Buy Asian Paints as it broke out of 17-week consolidation base on strong volume following blockbuster Q4 FY21 results.
- Asian Paints is India’s largest paint company, with strong brand equity due to its vast distribution network. The outlook for the Indian paint industry is very strong due to low per capita consumption, urbanization trends, and high awareness influencing customer preferences. The company’s value growth accelerated throughout FY21, led by strong pent-up demand. It has huge growth potential in the fragmented and unorganized home decor market through its kitchen and bath business.
- Fundamental ratings remain solid, with an EPS Rank of 85 and SMR Rating of A, aided by double-digit pretax margin and ROE.
- Technical ratings have remained stable, with an Up Down Volume ratio of 1.6 and positive A/D Rating indicating money inflow.
- RS line is approaching multi-year highs, with an RS Rating of 60 and A/D Rating of B+.
PI Industries
Key points from this report:
- We are reiterating our buy call on PI Industries as shares broke out to all-time highs from a 17-week consolidation base on strong volume.
- Fundamental ratings remain solid, with an EPS Rank of 93 and SMR Rating of A. Strong 20%+ EPS growth estimates for the next two years.
- Technical ratings: RS line has been in an uptrend since late 2018 and is now trending up toward new highs with an RS Rating of 59.
- Best-in-class A/D Rating of A+ indicates strong accumulation. Fund holdings increased 94% y/y as of March.
- PI is outperforming its peers in the Chemicals–Agricultural Industry Group and we see a significant gap in three-year price performance
Chongqing Zhifei Biological Prod
Key points from this report:
- Buy. We reiterate our buy recommendation on Zhifei after the stock broke out of a stage-four cup-with-handle base on strong volume. The company is a leading player in China’s vaccine industry and a core target in the supply of COVID-19 vaccines. Zhifei will continue to increase its sales volume of HPV vaccines with rising HPV vaccination in China. Its self-developed products are expected to be new growth drivers in the long term.
- Shares have strong technical ratings: RS line hit all-time highs with an RS Rating of 95 and A/D Rating of B+.
Bajaj Finserv
Key points from this report:
- The stock broke out from a flat base into new highs on heavy volume and is actionable.
- Strong fundamental profile: SMR Rating A, Composite Rating 95, EPS Rank 83. EPS is expected to grow 56% in FY22.
- Its technical profile remained strong and steady over the past two months. Its RS line is trending upward with an RS Rating of 80, up from 60 at the beginning of March. A/D Rating A-. Up Down Volume ratio 1.6.
