Technicalspeculator.com’s July 20, 2019: Trade-of-the-Week: Gentex (GNTX)

By Tech_Spec
23-July-2019 5:35:38 PM
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This week’s trade comes from the consumer discretionary sector, the auto parts industry.  Highlights for this trade are the recent breakout of the stock, suggesting sentiment has turned more bullish.  We also like the P/E multiple and the profit margin.  The one negative is the quarterly earnings growth (-6.30%).  However, that doesn’t appear to be changing the market’s outlook on GNTX.  Enjoy.
Company profile: Gentex Corporation provides digital vision, connected car, dimmable glass, and fire protection products worldwide. It designs, develops, manufactures, and markets automotive products, including interior and exterior electrochromic automatic-dimming rearview mirrors, automotive electronics, and non-automatic-dimming rearview mirrors for automotive passenger cars, light trucks, pick-up trucks, sport utility vehicles, and vans for original equipment manufacturers, tier-one automotive mirror manufacturers, and various aftermarket and accessory customers. The company also manufactures and sells variable dimmable windows to aircraft manufacturers and airline operators. In addition, it provides photoelectric smoke detectors and alarms, electrochemical carbon monoxide detectors, and alarms, audible and visual signaling alarms, and bells and speakers for use in fire detection systems in office buildings, hotels, and other commercial and residential establishments. Gentex Corporation sells its fire protection products directly, as well as through sales managers and manufacturer representative organizations to fire protection and security product distributors, electrical wholesale houses, and original equipment manufacturers of fire protection systems. The company was founded in 1974 and is headquartered in Zeeland, Michigan.

Fundamentals:

Trailing P/E: 15.93, Forward P/E: 14.84

EPS: 1.62, Beta: 1.17

PEG: 0.96

P/S: 3.59, P/B: 3.55

Profit margin: 23.45%

Operating margin: 27.28%

ROA: 14.39%, ROE: 22.52%

Qrtly earnings growth: -6.30%

Current ratio: 4.80

Additional fundamental data: https://finance.yahoo.com/quote/GNTX/key-statistics?p=GNTX

 

Technicals:

Recently broke out of a 13-month consolidation

New 52-week high, New all-time high

Buying momentum (RSI) is positive and rising

Buying volume is neutral

1st support level is at $24.75

 

The target is $29.70

Suggested buying approach: Buy Gentex at the current price level.  If the stock pulls back, as long the price level is above the stop, wait for confirmation of support and then add to the position.  Always use a 3% trailing stop.

 

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Author: Tech_Spec

Canada’s only Master of Financial Technical Analysis (MFTA). This 4 – 5 year program offered by the International Federation of Technical Analysts (IFTA) in England is regarded as the global standard. • Instructor of Technical Analysis for the Canadian Securities Institute (CSI). My role is teaching market analysis to industry professionals. • Financial Technical Analyst offering 25 years experience in the financial and investment service industry. • Editor and owner of the Technicalspeculator.com, an on-line independent financial market research and newsletter website. • Registered Securities Advisor

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