Boart Longyear rises 1.5% on high volatility and expanding price...

Boart Longyear rises 1.5% on high volatility and expanding price range December 22, 2009

Boart Longyear (BLY.AU), Australia's 16th largest energy company by market capitalisation, traded between an intraday low of 33.50c and a high of 34.50c. The price range has expanded in the last two days (from 0.50c two days ago to 1.0c today) which, accompanied by a price rise, is a bullish signal. Since the start of trading its volatility (highest price minus lowest price/lowest price) of 3.0% was 4.2 times the average daily volatility of 0.7%, up from 1.5% on Monday and 1.5% on Friday. A price rise on high volatility is a bullish signal. The stock price rose 0.50c (or 1.5%) to close at 34.0c. Compared with the All Ordinaries index, which rose 57.2 points (or 1.2%) on the day, this was a relative price change of 0.3%.


PRICE VOLUME DYNAMICS
Moving average price (MAP): the price to 200-day MAP ratio is 1.41, a bullish indicator. In the past 200 days this ratio has exceeded 1.41 58 times suggesting further upside. The stock is trading above both its MAPs and the 50-day MAP of 31.0c is higher than the 200-day MAP of 24.0c, another bullish indicator.
Relativities: today its percentile rank in the Australian market was 72. In the Australian market of 1,345 stocks traded today, the stock has a 6-month relative strength of 49 which means it has underperformed 51.0% of the market.
Volume: there were 29,364,759 shares worth $10 million traded. The volume was 0.6 times average trading of 51,731,297 shares.
% Discount to high: the last price is at a discount of 24.4% to the 12-month high of 45.0c four months ago on 14 Aug, 2009.
Volume weighted price (VWP): the price is at a premium of 2.1% to the 1-month volume weighted average price (VWP) of 33.0c. Given that this premium has exceeded 2.1% fifty-six times and been under 2.1% twenty-two times in the last year, the upside:downside probability is estimated at 56:22 or 2.5:1.
Rises to Falls: In the last three months the number of rises outnumbered falls 28:25 or 1.1:1.

RELATIVE VALUATION INDICATORS [RVI] FUNDAMENTAL ANALYSIS
Bullish Signals:
- Price/Earnings of 2.9 versus sector average of 9.8 and market average of 9.6.
- The earnings yield of 34.64% exceeds 10-year bond yield of 5.41%.
- Price/Sales of 0.24 versus sector average of 9.6 and market average of 14.5.
- Return on Equity of 102.9% versus sector average of 24.4% and market average of 18.3%.
- Total Liabilities/EBITDA of 3.2 is less than 5, this compares favourably with Joseph Piotroski benchmark of 5.
Bearish Signals:
- Return on Assets of 12.1% versus sector average of 12.8% and market average of 6.7%.

RELATIVE VALUATION INDICATORS [RVI] TECHNICAL ANALYSIS
Bullish Signals:
- The price advanced 6.2% in the last month.
- This has been propped up by firm volume of 1.3 times average for the month.
- Compared with the All Ordinaries index which rose 0.4% for the month, this represented a relative price increase of 5.9% for the month.
- The stock is trading above both its MAPs and the 50-day MAP of 31.0c is higher than the 200-day MAP of 24.0c.
Bearish Signals:
- In the Australian market of 1,345 stocks traded today, the stock has a 6-month relative strength of 49 which means it has underperformed 51.0% of the market.

FUNDAMENTALS
Earnings: the earnings yield of 34.6% is 6.4 times the 10-year bond yield of 5.4%.
P/E: the trailing twelve months P/E is 2.9 times, giving it a percentile rank of 93.9 by P/E. It therefore represents better value than 93.9% of other Australian stocks with earnings (rank 42 out of 645).
P/S: the price/sales ratio is attractive at 0.2.