400taxisComfortDelGro is one of largest land transport companies in the world with a global workforce, a global shareholder base and a global outlook. NextInsight file photo

Comfort Delgro

Capital Research Management Company - a unit of Capital Group of Companies - declared last night that they increased their stake in locally-listed integrated transport company Comfort Delgro last week.

Their purchase of 1.6475 million shares at $2.94 was transacted in the open market. They now hold 5.04% of Comfort Delgro. By crossing the 5% threshold, they have become a substantial shareholder of the company.

CD pulled back more than 10% after they announced their earnings in the middle of February.  At these levels the stock is priced at 22.3 X current PE. Recent news surrounding an increase in local ridership, together with a likely regulatory restructuring of their bus operations, will keep this stock under the spotlight of many traders.

Although the stock pulled back from a high of $3.28 to around the $2.80 level after their results last month, the low of this move was still above their November high of $2.74, which would lend support that the uptrend move that started in January is still on track.

A firm break of the $3.01 level may lead to a retest of the $3.28 high. Conversely, support for the stock remains around the $2.80 level. Failure to hold this may see Comfort pulling back to around the $2.47 level.

Incidentally, this announcement makes it the third stake increase reported this week by significant shareholders on locally-listed blue chips, after Noble and Golden Agri reported insider buying the last two days.

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