Hot stock: TECHNICS OIL & GAS soars 9.6% on heavy institutional buying

Excerpts from AmFraser Securities' report on Technics stock performance today -- it soared 9.6% to close at 97.5 cents on 2,805,000 shares traded....

Analyst: Lee Yue Jer

Robin Ting, chairman of Technics Oil & Gas, being interviewed by Taiwan media. Technics shares soared 8.5 cents to close at 97.5 cents today. File photo by Sim Kih

TECHNICS fell sharply in the recent market pullback, dropping from a stable 97-cent region to 87 cents in the space of one single week.

The selling was on light volume and in small lots, pushing the price down a few ticks each day.

The buying today, however, stood out for its high volume and in large individual lots of over 100,000 shares each.

We note that this is the first sign of heavy institutional activity in the last few months, characterized by heavy per-trade volume and apparent price insensitivity.

We are positive on Technics’ prospects, with gross/net margins remaining high at almost 40%/15%, well above peers’.

Technics has paid 9cps dividend for the year out of our 12-cent forecast, and our 2012F DPS expectation remains around 9c for an average dividend yield of 10% in each of these years.

Our model remains unchanged since the last update, and we maintain our BUY call with a $1.22 target.

Recent stories:

Insider buying: TECHNICS OIL & GAS, DMX, MEIBAN

TECHNICS OIL & GAS: High dividend yield, wide gross margin