Gokex analysis

As I was saying earlier i believe, this market can offer value if one looks around hard enough.
So Lets start with gokex: a stock pick with p.e.g of <1
( it seems common theme in my picks lately is $ worries, exporters)

How i analyze stocks...
If you can think in this fashion.
Then drop me a line. We can split up work and find good picks both on technicals and fundamentals.

News: Fy07 results are out
Valuations:
fy07 actual 20 rs
cmp = roughly 10x trailing
fy08e 9.4 x earnings
book value of stock fy06 was 200



growth rate 15% annual
last 2-3 years
sustainable trend
capacity expansions comissioned

india's largest garment exporter

valuations compelling
growth momentum intact

fy08e = 24.99
fy09e = 31.46
by icicidirect
tad high estimates

worst case looking at 15% returns in one year
fair value suggests a target p.e of 15, 15*20 fair value target of 300??
Icicidirect suggests 320 p.e/peer valuations
best case looking for 20-40%
if stock moves up to 10-15x 25 next year
in line with peers like bombay fashion and keval kiran

debt/equity is very very low
0.22
hence the higher p.e multiple vs other textile midcaps like vtl and alok
this company is mostly debt free
looks like a bargain to me considering its leadership position
margins are a bit on lower side only 7-10%

ronw is 20%
acceptable.

Technicals
has broken a downtrendline
is forming a pole and flag
GOKEX, Analysis Date:5/31/2007
Close/cmp:217.05
Swing : Up=Buy ( 3.900% sensitivity)
T1:238.962 T2:255.12
T3:281.482 1xR:255.4
ImpulseTargetZone:297.64-324.002
SwingHigh:234.0 CMP:217.1
SwingLow:195.0 SLPivot:212.6
2xAtr14Stop:20.9104
Narrowsl:212.60
WideSl:199.33
TrailingSL:213.40
Lower Chan:218.813 Upper Chan:248.371
ResLine:240.206

Look to buy around 212 possible flat correction lows
with sl 195 and target 238/255/281 if you are a technician
If you are an investor then just buy and play for the upper targets 255-281-300

all levels on weekly closing basis


Note icicidirect 1 year target is 312
my technical target zone coincides with the funda
target proposed by icicidirect
297-324 if we get a full 5 wave rally
w3/wc which is minimum anticipation after a sharp pole/flag
target is 255
within 2 months.

commit 5% of equity
risk involved is
17 pts, round up to complete 10% 20 pt risk
reward is
26/43 pts

Trading rules
buy @ 212
use 2x atr chandelier stop.