Technicalspeculator.com’s Trade-of-the-Week: Consolidated Water Co. (CWCO)

By Tech_Spec
27-September-2019 3:47:30 PM
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This week’s trade comes from the utility sector, water industry of Nasdaq.  The solid balance sheet of this company plus the breakout after 17-months of consolidation are the highlights of this trade.  We expect a gradual climb over the next few months to the target of $17.75.  Enjoy.

Company profile: Consolidated Water Co. Ltd., together with its subsidiaries, develops and operates seawater desalination plants and water distribution systems primarily in the Cayman Islands, the Bahamas, Indonesia, and the United States. The company operates through four segments: Retail, Bulk, Services, and Manufacturing. It uses reverse osmosis technology to produce potable water from seawater. The company produces and supplies water to end-users, including residential, commercial, and government customers, as well as government-owned distributors. It also provides design, engineering, construction, procurement, and management services for desalination projects and plants. In addition, the company manufactures and services a range of water-related products, including reverse osmosis desalination equipment, membrane separation equipment, filtration equipment, piping systems, vessels, and custom fabricated components; and provides design, engineering, consulting, management, inspection, training, and equipment maintenance services for commercial, municipal, and industrial water production, supply, and treatment, as well as wastewater treatment. Consolidated Water Co. Ltd. was founded in 1973 and is headquartered in Grand Cayman, the Cayman Islands.

Fundamentals:

Trailing P/E: 15.01, Forward P/E: 22.06

EPS: 1.04, Beta: 0.51, PEG: 3.05

P/S: 3.30, P/B: 1.45

Profit margin: 21.96%, Operating margin: 13.91%

ROA: 3.55%, ROE: 7.77%

Qty earnings growth: 13.20%, Current ratio: 12.83

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

Technicals:

The recent breakout of a 17-month consolidation

New 52-week high, New all-time high

Buying momentum (RSI) is positive and rising

Buying volume has risen over the last two weeks

1st support level is $14.50, The safety stop is at $13.95

The target is $17.75

Suggested trading approach: Buy the stock at the current price level.  Should there be a pullback, wait for confirmation of support and then add to the position if desired.  Always use a 3% trailing stop.

More trading ideas and market research are on www.technicalspeculator.com.  Sign up for a free account.  

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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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