AMWAY: Attractive Enough for Long Term Investing
Table: Amway's last 8 quarterly results
Graph: Amway's last 54 quarterly results
Financial Position
As
at 31/3/2021, Amway's financial position is deemed healthy with current
ratio at 1.4 times while total liabilities to total equity appeared
high at 1.2 times. However, it has cash balance of RM162 million or
about RM0.99 per share.
Valuation
Amway
(closed at RM5.19 yesterday) is trading at a trailing PER of 15 times
(based on last 4 quarters' EPS of 34.6 sen). At this PER, Amway is
deemed fairly attractive. In addition, investors may take comfort in
receiving a decent dividend yield of 5.3%.
Technical Outlook
Amway
has dropped from a high of RM12.50 in 2013 to a recent of RM4.50 in Mar
2020 (during the selldown at the start of the pandemic).
Chart 1: Amway's monthly chart as at May 25, 2021 (Source: Malaysiastock.biz)
From the daily chart below, Amway has been rising slowly in an uptrend line (in blue) with support at RM5.20.
Chart 2: Amway's daily chart as at May 25, 2021 (Source: Malaysiastock.biz)
Conclusion
Based
on decent financial performance, good financial position, attractive
valuation & a constructive technical outlook after a long decline,
Amway could be a good stock to consider for recovery play.
Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the
security or securities mentioned as some of my clients may have an
interest in the acquisition or disposal of the aforementioned security
or securities. As investor, you should fully research any security before making an investment decision.
http://nexttrade.blogspot.com/2021/05/amway-attractive-enough-for-long-term.html
