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Merko - midterm outlook looks bearish

OMXTSE:MRK1T   MERKO EHITUS
The Q3 results on 05 .11.20 will most likely deliver good results. However I think it wont help much to lift the price.
On the contrary, many investors will see this as a good chance to decrease position or get out with decent price near 9EUR.

Two main reasons:
  • The construction sector is expected to decline next year or two
  • As we have seen this spring , the conservative dividend policy is back (last time proposed 0.60EUR per share) and due recession may get tightened more or even skipped again on 2021

Without unprecedented good news I suspect we visit price near 8EUR again or even below in next few months.
Comment: The H&S pattern formation is invalidated due overwhelming optimism over vaccines and potential economic recovery.

This stock is trading already higher than 1 year ago and the potential slowdown of construction sector in near future is yet to come.

Although I'm not planning to sell out position yet, it's worth to be a very cautios. Market is currently wild and in the short-term anything can happen with the price. In the long-term it's one of the best stocks to own on Nasdaq Baltic.

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