Fruitas Holdings Up 18.29% Since Buying 2 New Food Brands
Lester Yu – led Fruitas Holdings, Inc. (FRUIT) has so far risen by 18.29% to a new all-time closing of Php1.94 since it bought two new food brands three days ago. On February 3, the company announced that it bought a 100% stake in SoyKingdom, Inc. which is the company that holds The Tofu Store brand. Fruitas unit Negril Trading, Inc. also bought the assets of Filipino cuisine stall operator Kuxina. Recall that FRUIT had a roller coaster of an IPO where it surged by as much as 45.83% to a high of Php2.45 from its IPO price of Php1.68 before closing back to Php1.71 on its listing day last November 29, 2019. Come to think of it, based on its final prospectus, an IPO price of Php1.68 translated to an annualized earnings of Php102 million or an EPS of Php0.04780; 2019E P/E of 35.16x. With management guidance of ~15% top line growth for 2020, assuming a fixed margin, its 2020E P/E would be about 30.56x which was rather expensive relative to JFC’s 2020E P/E of 31.62x, MAXS’ 2020E P/E of 13.70x and PIZZA’s 2020E P/E of 17.58x at that time. Hence, it was actually a “sell” especially with its initial surge. Its movement during its listing day marked the start of its slide to a low of Php1.03 in the next couple of weeks before it was able to recover as of late.
From a technical point of view, FRUIT may likely add onto its recent gains. As you can see from its chart, the stock has already surpassed the resistance of a cup and handle pattern. Following its break above the Php1.83 handle on good volume, the stock may then build onto its rise and reach for Php2.45. Still, one must place a stop loss trigger below the Php1.80 mark. Caveat.
_____
To know more about the Trading Edge Equity Advisor, kindly click HERE. Subscribe now to receive email alerts before the price moves! Here’s what our students and subscribers say. 🙂
*Consensus target price or average target price given by the major foreign and local brokers of various stocks on top of index names are available in our Equity Advisor!
