Fundamental Analysis – Multiples Approach
Let’s do the simple Multiples Approach to get a valuation for NOW Corporation.The valuation table below shows a mixed valuation. This is one reason why you should not rely on one valuation model.
On the other hand, NOW has a 5-year sales growth % of 24.39%, higher than the 12.46% of its sector. Furthermore, NOW has a beta of 0.95. By classical interpretation, that means NOW is less volatile compared to the market.
| Financial Ratio | Stock | Sector | Valuation |
| P/E Ratio TTM | 1,471.17 | 103.12 | Overvalued |
| Price to Sales TTM | 84.81 | 189.7 | Undervalued |
| Price to Cash Flow MRQ | – | 194.88 | N/A |
| Price to Free Cash Flow TTM | – | 17.28 | N/A |
| Price to Book MRQ | 9.94 | 31.54 | Undervalued |
| Price to Tangible Book MRQ | 9.34 | 1.67 | Overvalued |
Since many are speculating that NOW is going to be the third major telco player, I’d like to leave this video report of Warren De Guzman of ABS-CBN.
Technical Analysis
NOW Corp. is bullish on a long-term horizon as its 200-day SMA sits below the prevailing market price. On the daily chart below, you see that NOW respects, so far, the support at 8.48. As soon as NOW breaks out above the 50% Fibonacci retracement with a significant volume, it’ll be more likely to draw closer to the resistance at 12.00. Until then, monitor the 8.48-12.00 range.
Look closely on the daily chart I’ve pasted below. Zoom it if you must. The current price is already above the shorter-term SMAs and MACD seems posing for a divergence with the signal line. Are you used to trading “anticipation plays?”
If you choose to test-buy, buy in tranches.
Volume
As of June 26, 2018, at 03:30PM, the volume of NOW is 61.13% of the previous trading day.
Remember these two things:
- If the closing price is bullish and the volume is above its 30-day volume average, the bullish price might continue.
- If the closing price is bearish and the volume is below the 30-day volume average, the bearish price might continue.
Price-Volume Distribution
NOW might play above the 9.36 level by the next trading day since the biggest volume and the highest number of trades happened on the upper half of the Price-Volume Distribution chart.
It’s a lot easier to make a data-driven forecast of the stock’s next price movement with this Price-Volume Distribution chart than with an intraday chart, isn’t it?
We post this chart for every stock that we recommend to our customers in the Top Stock Picks.
Risk Level
NOW has a HIGH RISK level due to its risk percentage of 91.17%.
Foreign Fund Flow
NOW registered a Net Foreign Selling worth P2,639,055.00 as of June 26, 2018. On a 30-day trading period, NOW is on a Net Foreign Selling worth PHP2,799,184.00.
Top 10 Players’ Sentiment – June MTD (June 1 to 26)
Participants with a 100% Buying and Selling Activity from Jun-01-2018 to Jun-26-2018 at 03:30PM:
- 11 out of 98 participants or 11.22% of all participants registered a 100% BUYING activity
- 4 out of 98 participants or 4.08% of all participants registered a 100% SELLING activity
- Top 10 Players’ Buying Average: 9.6662
- Top 10 Players’ Selling Average: 9.6883
The psychological average price of the top 10 players from Jun-01-2018 to Jun-26-2018 is from 9.6662 to 9.6883.
Top 10 Players’ Sentiment – June 26, 2018
Participants with a 100% Buying and Selling Activity as of Jun-26-2018 at 03:30PM:
- 5 out of 57 participants or 8.77% of all participants registered a 100% BUYING activity
- 25 out of 57 participants or 43.86% of all participants registered a 100% SELLING activity
- Top 10 Players’ Buying Average: 9.1398
- Top 10 Players’ Selling Average: 9.1623
The psychological average price of the top 10 players as of Jun-26-2018 is from 9.1398 to 9.1623.
Why Did I Invent the Top 10 Players Chart and Sentiment Generator?
I needed to know the psychological average price of the top 10 brokers who have traded a specific stock within a specific time period.
I needed to know the buying average of the top 10 brokers who have traded a specific stock within a specific time period.
I needed to know the selling average of the top 10 brokers who have traded a specific stock within a specific time period.
I wanted to know how many brokers, out of all the brokers who have traded a specific stock within a specific time period, registered a 100% buying activity.
I wanted to know how many brokers, out of all the brokers who have traded a specific stock within a specific time period, registered a 100% selling activity.
The buying and selling averages of the top 10 brokers are a sneak preview of the range of their collective average price.
If I know the psychological average price of the top 10 brokers who have traded a stock, I can calculate in my mind how much more could a trader, with an X percentage of risk tolerance, afford to hold should the stock’s price go south.
This is how we mentor our clients who subscribe to our Top Stock Picks.
We do not tell our customers to buy this and sell that.
We show them our data-driven basis so they know what we know.
Our customers are not blind-followers but well-informed investors.
Our customers are better investors than most.
When you ask our customers why they buy the stocks that we recommend, you better get your pen and paper handy.
They will not answer, “Because I was told to buy it.”
They will narrate our data-driven basis like how I narrated the summary of my analysis in this article.
At Equilyst Analytics, our customers learn and earn.
Read this article if you want to become a better investor, too.
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