Single-digit P/E mid-cap stock with high ROE and dividend yield; on the verge of a multi-year breakout!
On a year-to-date (YTD) basis, the stock has surged by over 100 percent, making it a true multibagger stock.
Six in Six! Whenever this term is used, it reminds us of Yuvraj Singh's heroic feat: hitting six sixes in six balls during the T20 World Cup against England. However, this time, it's the Nifty bulls who have managed to achieve a six-day winning streak on Friday, closing near its two-month high amidst buying across sectors, except for healthcare.
On the daily chart, Nifty has maintained a higher bottom formation and is comfortably trading above its 20 and 50-day moving averages (DMA), which is a positive sign. It has also formed a long bullish candle on the weekly chart, which bodes well for the bulls.
Amidst this bullish scenario, there is a Mid-Cap stock knocking on the door of a multi-year breakout. The stock name is Chennai Petroleum Corporation Ltd. In 2007, the stock reached a high of Rs 478. Then, in the following year, it managed to reach Rs 480.50, only to face selling pressure thereafter. This led to the formation of strong resistance in the Rs 478-480.5 zone. Subsequently, over the next five years, the stock tested the lower end of the range, which was around Rs 48. However, in 2023, on Friday, the stock managed to surpass the resistance of Rs 478-480.5 on an intraday basis and settled at Rs 478.55. Going forward, sustaining above the Rs 478-480.5 zone would confirm the multi-year breakout of the stock. On Friday, the stock witnessed a sharp up-move backed by higher volume, as the volume for the day was the highest in the last two months.
The daily Moving Average Convergence Divergence (MACD) indicator is pointing northward while staying above its nine-period average, which validates a positive bias in the stock. The daily 14-period Relative Strength Index (RSI) is in an uptrend and is seen rebounding, finding support at its nine-period average, thus further validating the positive bias.
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But that's not all. The stock boasts a Return on Equity (ROE) of 70.2 percent and is trading at a price-to-earnings (PE) ratio of 4.14. What's truly fascinating is the fact that the stock has a dividend yield of 5.64 percent. Isn't that amazing? It seems like all the factors are aligned in favor of this stock. Therefore, keep a close eye on it.
On a year-to-date (YTD) basis, the stock has surged by over 100 percent, making it a true multibagger stock.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.