Market Update – February 2011
- JCI has dropped by 7.5% on YTD basis and 9.4%from its peak, mainly due to
- profit taking – strong performance,
- inflation fears,
- tension in middle east, and
- stretch valuation
- At JCI 3,447, the market is trading on 13.7x PER’11 on the back of +18% EPS growth, higher compared to average historical 5 years of 12.8x
Assuming current 8.9% bond yield, we estimate 12.5x 2011F PER as a Buy signal (spread narrows close to 1%) or equal to JCI at level 3137.
We would like to recommend stocks which trades at or below 12.5x PER’11 with strong management and balance sheet.
- Market Update Februari 2011 (330.2 KiB)