Tuesday, July 13, 2010

CIMB Research: Eng Tek a low-risk buy

KUALA LUMPUR: CIMB Equities Research said Eng Teknologi Bhd's share price, which hit a new 52-week high of RM2.98 in March, it had since gone'' through a lengthy consolidation phase.

It said on Tuesday, July 13 the pullback was moderate and prices are now holding near the 38.2% FR. Looking at the chart, it seems that a temporary bottom have been formed at RM2.25.

Technical indicators also look conducive. MACD is poised for a positive crossover soon while its RSI has also bounced off its low.

'We believe this is a low-risk buy. Hence traders may want to take position now. However, always put a stop at below RM2.25. A breakout of its moving averages, at RM2.39-RM2.47, would likely lift prices towards RM2.56 and

RM2.70 next,' it said.

The stock is trading at FY11 P/E of 3.9 times and at price to book value of 1.1 times.

Eng Teknologi, manufactures hard disk drive peripherals components, industrial machinery, equipment, precision tools, electronic and computer parts, high precision mould, die, jigs, fixture, and automation system.

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