Reuters Code: SGRO.JK
I would like to discuss Sampoerna Agro (SGRO). I like this stock and I believe it would grow at least 20% this year. I would show you the fundamental data and I also would show you some technical perspective.
Fundamental Data
(click to enlarge)
I made a projection for full year 2009 which is shown on the above table. I noticed that the revenue growth on 3Q-2009 and 2Q-2009 mostly due to the substantial increased in CPO prices. I believe this price trend would be appropriate to be included in the full year 2010 projection.
I also believe that the 2010 net margin would be similar to the current margin, with tendency to increased.
Based on my assumption and projection, I derived the ideal price for full year 2010 with appropriate PE multiplier of 11x-12x.
| Expected Price | FY 2010F |
| PE 11 x | 3005.92 |
| PE 12 x | 3279.19 |
This price target I believe would be reached by the end 2010.
Technical Point of View
I also like SGRO because it has retraced about 38.20% since its long rally which is started in September 2009 with initial level 1950 and has reached the highest level at 3075. The 38.20% Fibonacci retracement should be at 2645. This stock has reached 2675 today and closed at 2700. If in the next few days the stock could maintain its support around 2650-2675, I believe this stock would bounce back and might continue the long rally to reach a new high.
Based on my short analysis, I would recommend a "BUY" for SGRO with TP 3250
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