Speculative Bet on This Auto Ancillary Stock - STRT
Strattec Security Corporation
Strattec Security Corporation (NASDAQ: STRT) creates, produces, and distributes mechanical locks, electronic locks, and keys. It also manufactures ignition lock housings and access control equipment. The company provides full-service aftermarket support and ships equipment to customers in the United States, Canada, Mexico, Europe, South America, Korea, and China.
Q2FY22 Results (period ended December 26, 2022)
Valuation Methodology: EV/Sales Multiple based Relative Valuation
(Source: Analysis by Kalkine Group)
The vehicle industry confronts output constraints due to supply and semiconductor chip problems. STRT, on the other hand, was able to stay profitable because of its increased efficiency. The post-termination audit by the PBGC was recently completed with no adjustments. That menace has now vanished completely. The 52-week high and low for the stock are USD 54.90 and USD 31.88, respectively. Considering the correction of 18.38% in the stock price in the past nine months, the slight decline in revenue, stable cash position, strategic advantage, and current valuation, we recommend a "Speculative Buy" rating on the stock at the closing price of USD 36.75 as of March 23, 2022, at 07:58 AM PDT.
Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
1 Year Technical Price Chart (as of March 23, 2022, at 07:58 AM PDT). Source: REFINITIV, Analysis by Kalkine Group
Technical Summary Analysis
*current market price as of March 23, 2022, at 07:58 AM PDT.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.
Note 3: Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.