Dear all,

Riverstone has fallen 24% since 26 Jan 16 to trade around $0.950 due in part to the following factors:

a) Weakening of USD against MYR;

b) Specific sell off in the Malaysian glove makers;

c) Overall weak market sentiment;

At the time of writing this, Riverstone is trading +0.015 to 0.950. Day range is $0.935 – 0.955. According to Bloomberg, its valuations remain attractive around 15x FY16F PE vis-a-vis its Malaysian counterparts of around 18x FY16F PE. Based on historical performance, Riverstone’s past quarters have been typically beating analysts’ expectations. 4Q results should be out on 24 Feb, Wed evening, or 25 Feb Thurs before market opens.

Please see Figure 1 below for Riverstone’s average analyst target prices which ranges from $1.08 – 1.41.

Figure 1: Average analyst target prices

Source: Bloomberg as at 22 Feb 16

 

Chart analysis

Based on Chart 1 below, Riverstone’s has been falling for the past one month. Both 50D and 100D EMA are turning downwards. The medium trend seems to be down but there may be some small technical bounce in the near term, as it approaches its results period.

Near term supports: $0.940 (200D EMA) / 0.925 / 0.895 – 0.900

Near term resistances are at $0.970 / 1.00 / 1.04 – 1.06.

Chart 1: Riverstone closed at $0.960, above its 200D EMA $0.940

Source: Shareinvestor as at 22 Feb 16

 

One noteworthy point

Except for Chart 1, the above write-up was done this morning when Riverstone was trading around $0.945 / 0.950 and I have already sent that write-up to my clients this morning. FYI only.

 

Disclaimer

Please refer to the disclaimer here