Diodes Incorporated, a Standard and Poor's SmallCap 600 and Russell 3000 Index company, delivers high-quality semiconductor products to the world's leading companies in the consumer electronics, computing, communications, industrial, and automotive markets. The company leverages its expanded product portfolio of discrete, analogue, and mixed-signal products and leading-edge packaging technology to meet consumer needs. The broad range of application-specific solutions and solutions-focused sales, coupled with worldwide operations of 32 sites, including engineering, testing, manufacturing, and customer service, enables the company to be a premier provider for high-volume, high-growth markets. Technically, a price in an inclining channel pattern makes for an attractive investment opportunity (see the black parallel trendlines on the main chart). The pattern is formed when the price trends upward, forming a channel between two parallel upward sloping lines. The upper trendline represents the stock's resistance level, while the lower trendline represents the support level. An inclining channel pattern also suggests that the price might continue to rise in the short to medium term, thereby suggesting a potential entry point. We expect the price to reach the upper boundary of the inclining channel pattern. According to the Relative Strength Index (RSI), the stock will be in overbought territory at ~$120. This classifies our profit target of $98 as realistic. We suggest a low at-risk allocation for this trade.
Share Information
| Share code | DIOD |
|---|---|
| Industry | Semiconductors |
| Market Capital (ZAR) | 3.78 billion |
| One year total return | 12.02% |
| Return year-to-date | 8.48% |
| Current price(ZAR) | 82.60 |
| 52 weeek high(ZAR) | 97.45 |
| 52 week low(ZAR) | 58.52 |
| Financial year end | December |
| Closing paragraph | The current price provides a decent entry point. The share is trading at a beta of 1.42, indicating that the share is more volatile than the overall market. We expect medium fluctuations in the share price. |
Consensus Expectations (Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (GBP) | 7.36 | 6.19 | 6.83 | 7.39 |
| Growth (%) | -15.86 | 10.25 | 8.23 | |
| Dividend Per Share (GBP) | 0 | 0 | 0 | 0 |
| Growth (%) | - | - | - | |
| Forward PE (times) | 13.34 | 12.10 | 11.18 | |
| Forward Dividend Yield (%) | - | - | - | |
| Closing paragraph | Earnings in FY23 are anticipated to be softer, but a decent rebound in growth is expected thereafter. Several technical indicators point to upside potential in the price. | |||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position |
KO - BUY (Continue to hold) |
HLMN - BUY (Continue to hold) |
COST - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 61.85 | 8.01 | 501.27 |
| Current | 63.39 | 8.14 | 500.79 |
| Movement | 2.5% | 1.6% | -0.1% |
| Summary text |
A symmetric triangle pattern is of interest. Remains above its 200-day simple moving average.
Our profit target remains at $67, with a trailing stop-loss at $61.50. Time exit: 16 June 2023. |
A price that exhibits repetitive cycles in sequences remains of interest. Testing its 200-day simple moving average
Our profit target remains at $10, with a trailing stop-loss at $7.50. Time exit: 10 October 2023 |
Technical indicators are supportive of a bullish trend. Testing its 200-day simple moving average.
Our take profit target remains at $560 with a a stop-loss at $480. Time exit: 7 July 2023. |
| Share Name and position |
CEIX - Buy (Continue to Hold) |
BDRY - Buy (Continue to Hold) |
STZ - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 63.90 | 9.05 | 228.16 |
| Current | 63.76 | 8.99 | 225.46 |
| Movement | -0.7% | -1.2% | -0.2% |
| Summary text |
The stock's falling wedge pattern, which occurred during a prior uptrend, continues to be noteworthy. Crossed above its 200-day simple moving average.
Our profit target remains at $77, with a trailing stop-loss at $58. Time exit: 2 August 2023. |
We are keeping an eye on the price, which is currently in an accumulation phase. Testing its 200-day simple moving average
Our profit target remains at $12, with a trailing stop-loss at $8. Time exit: 21 June 2023. |
A bullish megaphone pattern remains of interest. The stock remains below its 200-day simple moving average but is moving closer to it.
Our take profit target remains at $252 with a stop-loss at $218. Time exit: 21 June 2023. |
