It has been a week or so since Nanometrics Incorporated (NANO) reported its earnings which beat consensus estimates, but its forward earnings guidance for 1QFY2019 fell short of estimates. The Company’s stock price stood largely unchanged and it was last traded at US$30.24, up by 40 US cents or 1.34 per cent intraday as of market close on February 15, 2019.
One-Year Daily Chart Showing Consolidation
The one-year daily chart shown above indicated NANO’s stock price is showing consolidation as it overs around the US$30 price handle and has not moved significantly. There is largely sideways movement without any potential significant upside or downside to the stock price since it posted its earnings on February 05, 2019.
What to expect the stock price in the coming few weeks
While NANO’s stock price has not shown any significant sharp movements, we think that given that there was a ‘Dead Cross’ formation where the 50-day simple moving average (MA) line (purple colour) ‘cuts’ below the 200-day simple MA line (turquoise colour) since mid-December 2018, there are still many chances that there could be a continuation of stock price declines going forward despite the cheap price multiples we have seen in the company’s overall financial fundamentals where both the trailing and forward price-earnings (P/E) multiples are in the 12 to 15 times ranges.
While the stock price has not gone below US$25 as forecasted earlier on an earnings shortfall sceanario, we think that most investors will be keenly watching for the US$25 level and below before they will make any investment decision. For now, we think that investors might be adopting a ‘wait-and-see’ mode before pouncing on any significant deterioration in the stock price levels.
Meanwhile, stay tuned! We shall continue monitoring.