Calgro used to be the darling of the
From the high point in August 2015, Calgro’s sharemade what call a “ ” with tops on 12/8/2015, 21/12/2015 and finally 13th May 2016 – all at 2350c. It could not seem to penetrate that level despite all the great publicity it was getting at the time. For technical analysts, a triple top is a very sign. It normally comes before a major .
In our view, a triple top is caused by one or moreoff-loading their shares because of some bad news. The bad news is not known to the investing public but the major shareholders are privy to it because they are very close to the . Each time the share reaches that level they take the opportunity to off-load causing the share to fall back, but it rises again because all the news, in the financial media, is very positive. However it cannot penetrate that and falls back again. The third time this happens, give up and begin to abandon the share – resulting in a protracted downward trend. A very similar (a triple top) occurred in Steinhoff shares between March and August 2016 – and as we now know, the share has subsequently fallen from around R90 to a low of just 70c in September 2020.
For the next five years after the triple top, Calgro shares fell steadily in a long downward trend which came to an end on 17th February 2021 at a price of just 170c. Our advice to our customers through this time was to wait for a clearthrough that . That breakout finally came on 24th August 2021 at a price of 272c. Since then, the share has moved up to 340c – a gain of 25% in about six weeks.
This company has been through a tough 4 years but is now beginning to function effectively again. They have 4654 residences under construction compared to half that number a year ago and their memorial park business sawup 65.2%, albeit off a low base. They have managed to reduce their significantly and bought back 4,6% of their .
With their latestfor the six months to 31st August 2021, Calgro is expecting to return to with (HEPS) of over 40c – but as a you could have bought the share ahead of this news at 272c, when it broke up through its long-term downward trendline. We believe that its new upward trend has only just begun.
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