Once one of the darlings listed on the JSE, Coronation has been on a slippery downward slope since December 2014. The reasons for this have been twofold. Firstly, valuations were extremely stretched (end of 2014), trading at a market capitalization (mkt cap) to Assets Under Management (AUM) percentage of close to 7%, while the average international ratio (for global Asset Managers) was trading at around 2%. Secondly, Coronation's growth prospects are questioned in a South African market, which has seen the entry of more competitors and the growth of a passive (ETF) market. At the current (mkt cap/AUM) ratio of 2.59%, Coronation is looking quite cheap compared to international counters:
ALV
4.6%
BK
2.6%
TROW
2.8%
Add into this mix a Forward PE (Source: Thomson Reuters) of 11 times and a Forward DY of 9%; then you get an opportunity in my view.
We can clearly see the Descending Triangle in the share price movement that developed since the April that could be very positive for CML, should we see a break and close above the resistance level at R44.25. A break a close above these levels could see the price seeking resistance at both the 50- and 200-day moving averages at R46, with next target then becoming R47.25.
The share price currently finds itself in extreme oversold according to its 14-day RSI. It has also massively underperformed the $JALSH over rolling 12 month period.
For short-term traders, I would recommend a stop-loss at R39.35.
Consensus target price (according to Thomson Reuters) for Coronation is R44.82 but only covered by one analyst (Avior Capital Markets).
ALV
4.6%
BK
2.6%
TROW
2.8% Add into this mix a Forward PE (Source: Thomson Reuters) of 11 times and a Forward DY of 9%; then you get an opportunity in my view.
We can clearly see the Descending Triangle in the share price movement that developed since the April that could be very positive for CML, should we see a break and close above the resistance level at R44.25. A break a close above these levels could see the price seeking resistance at both the 50- and 200-day moving averages at R46, with next target then becoming R47.25.
The share price currently finds itself in extreme oversold according to its 14-day RSI. It has also massively underperformed the $JALSH over rolling 12 month period.
For short-term traders, I would recommend a stop-loss at R39.35.
Consensus target price (according to Thomson Reuters) for Coronation is R44.82 but only covered by one analyst (Avior Capital Markets).