Titan Europe (88p) puts the wheels back on!

Titan Europe Announced preliminary results, for the year ended 31st December 2010, today. TSW manufactures wheels and undercarriages for the global construction, agriculture and mining sectors and has operations in several countries.

The highlights of the results are:

• Turnover up £96.6m (+37.35%) from £258.6m to £355.2m
• Operating profit improved by £45.8m to +£12.3m (FY 2009, loss: £33.5m)
• Pretax profit £3.4m up by £44.8m from 2009 loss of £41.4m
• Net debt reduced by £15.2m, to £132.8m (31.12.2009: £148m)
• Diluted eps of 3.14p (2009: loss per share of 41.44p)

The rise of 9p to 88p today, reflects these excellent figures and there could be more upside to come, based on the look of the shareprice graph (see below):

The graph shows the nice move up today (+11.39%) on strengthening volume. The OBV has kicked up nicely in the past two days and the RSI and MACD are nowhere near overbought teritory. A quick look back at the longer term chart reveals an interesting angle...

The  "eagle eyed" DIY-Investors amongst you will have noted the huge gap (arrowed on the graph) to the downside that occured in September 2008, when TSW dropped from 122p to 64p in a day. This fall of 58p (47.5%) from the previous close, on volume of just over a million shares traded, was followed by more heavy selling over the next few days. This sets up TSW for the possibility of a significant move up over the next few days, as people digest the figures and start to buy back in. In my opinion, I believe that the 122p target may well be reached within the next few weeks. A positive change in sentiment is supported by the news, released with the results, that Q1 2011 turnover is 66% up on the first quarter last year. This sets us up nicely for another jump in turnover within the next twelve months.

Do you agree with my interpretation of the prospects for TSW? Do let us know what you think by leaving you comments below.