Pendragon (20.5p) - Start of a new upward move?

Fully listed Pendragon (PDG), closed today at 20.5p, up 2.5p or 13.89%. With the preliminary full year results due on 28th February 2011, is this the start of a new upward move?

On a fundamental basis, PDG is currently on an exceptionally low PSR of 0.04 (compared to the sector average of 0.87). Similarly, its PER is currently only 5.31 (sector average is 13.7). Analysts are expecting the eps for y/e 31.12.2010 to have grown 203% to 2.53p, with another 34% growth in earnings expected for 2011 (to 3.39p).

What of the technicals? Well have a look at the grapth for the past 9 months (below):

From this, you can see that the closing price (20.5p) has nudged through the resistance line, extended from the two previous highs (Aug 2009 & April 2010). Similarly, it has broken through the shorter term resistance line (September 2010 to present).

Of particular note is the strengthening OBV, giving a positive divergence with the falling shareprice. Also, we have buy signal on the Stochastic Indicator. Similarly, the RSI and OBV have kicked up nicely today.

All of this bodes well for the future, as it mirrors the breakout that took place early in January 2009 (see graph below).

What you think about the prospects for Pendragon?

DCD Media (SP=9.625p) - Buying Opportunity?

DCD Media (AIM: DCD) ticked up 0.75p (6.9%) today. The share price graph (below) shows a clear reversal signal ...

Note also that the on-balance-volume (OBV) is very strong. Couple this with oversold indictions from RSI and MACD and we seem to have a good opportunity to buy into a small company with improving prospects.

The longer term graph (below) shows the price history.

The decline from 2007 to 2010 indicates a classic depressed stock. However, after a period of "bottoming out", there now seems to be some indications of a resurrection in the share price. Our interest started when Taya Communications increased their holding to 12.145 million shares (19.87%) - clearly they had spotted some value here! DCD Media has nine operating companies producing and selling television programmes and licensing various rights to third parties. The accounts for the year ended 30th June 2010 showed an improving balance sheet, with £4.9m in cash - not bad for a company with a current capitalisation of £5.9million!

With a low PSR (0.17) and improving prospects, we believe that this is well worth adding to our DIY-Investors portfolio.


What do you think?

API - Breakout (after double bottom)

API Group closed at 19.5p today (up 3.5p or 21.88%). This comes following the recent news about the disposal of API's joint venture interests in China. Since the release of the much improved interim results, on 2nd December 2010, API has been hovering around the 15 - 16p level. The chart (below), shows the recent action...

The volume yesterday (6.73m shares) was quite decisive and was followed by todays rise, on lower volume (527 thousand shares). As you can see, with good technical indicators and now with the fundamentals seeming to be on an improving trend, this is one well worth watching for us DIY-Investors!

Luminar Group Holdings (LMR) - Breakout?

Luminar closed at 15.75p today, breaking through the short-term resistance line and showing the first signs of life since its last minor high on 20th October 2010. The sharescope graph (below) shows very clearly the gradual splutterings of life beginning to appear.

The on balance volume (OBV) has remained strong since October and, until today's announcement about recent trading, there really hadn't been any significant response to LMR having refinced its debt in December.

However, Luminar made it into the DIY-Investors.com picks for the year and so we are not too surprised to see signs of life. For the list of ten sharepicks for 2011 and details of last years market beating performance, check out the newsletter on the DIY-Investors.com website HERE.

Titan Europe (TSW) - Breaking out?

Titan Europe (TSW) closed today at 83p. This marks a quiet breakout, on low volume, above the resistance level (82.5p) that has been containing the price for about three months.

TSW - 6 month chart

Now you might think that nudging through by a mere 0.5p is insignificant but in our experience, these small moves often mark the start of a new uptrend. The OBV remains strong and the MACD indicator gave a buy signal a few days ago. Judging by the longer term chart, there doesn't seem much to stop the SP climbing to about 122p (see below). Do you agree?

Titan Europe - Longer term chart (approx 27 months)

Apart from Blackrock increasing their holding to above 5% (17th November) and the good trading update on 5th November (for the 3rd quarter to 30th September), we can't find any other obvious reason for the breakout. If you have any ideas, please share them with us here.

STV Group - Is this the perfect rounded bottom?

• Scottish TV Group (Epic: STVG) has been on the DIY-Investors.com radar screen for some while. The share price graph (below) indicates that it is in the process of forming an almost perfect textbook "rounded bottom" - generally considered one of the strongest of bullish bottoming patterns.

The OBV is also strong and the RSI is also looking good. The price seems to be hugging the 200 day SMA but this in turn is now curving upwards.

The fundamentals also look encouraging. Based on the concensus forecasts for Y/E 31.12.2010, valuations are as follows:

• PER (pr) = 2.92
• PSR = 0.41
• PEG (pr) = 0.14

Being a FTSE Fledgling member, you can also tuck this one away in your self-select Maxi-ISA. Take a look and let us know what you think!

Johnson Service Group (JSG) - Breakout from trading range

You can see that Johnson Service Group (JSG) has clearly broken out of the trading range that has been constraining it for some weeks, see Graph below.

The next likely resistance level is 36.5p, the closing price on 7th May 2008, when JSG hit a "minor high", before reversing to begin its final downtrend leg. Since hitting its low (5.25p on 17th February 2009), it has been gradually creeping upwards in a typical step/stutter fashion.

With earnings (eps) forecast to nearly double in the current year, ending 31st December 2010, and a PEG of 0.16, prospects look to be improving for this turnaround candidate.

We believe that this share, in a typical "boring" Company - unloved by the City, is likely to undergo a significant re-rating over the next twelve months. What do you think?