Every trader knows that a "hammer" in a downtrend is bullish. We see this today in the case of $ION, ending with a long green candle, but with a longer upper shadow. This shows that bulls gained the upper-hand during the early phase in the tug-of-war between buyers and sellers, but lost control by the end of the day and the bears reappeared devouring their victims. An encouragement though that the price ends just with a miniscule 0.01 point above the average @ 1.58. Even this increase is unreliable for two traders managed to buy 4ksh @ 1.58 during the run-off. My initial impression with this kind of trade is one of a sucker rally, a DCB, a bull trap.
However, after examining some numbers, I had a little bit change of heart. We have both a higher low/high today. The volume is up 1,036% compared to the previous day. The management has been consistent with its buy-back program.
Examining the Income Statement and the cash flow of the company, I stumbled with some interesting data. Though the 1Q17 net income is flattish, just an increase of 6.35%, but I find the eps growth rate qoq quite impressive. This is in view of the fact that the revenue is down compared to previous quarter. If you convert into Php both the 1Q16 and 1Q17 epses, you will arrive @ 0.025 and 0.030 respectively. Though such eps growth rate will not pass the criteria of some traders to consider this stock, as for me, a 20% growth rate qoq is worthy of attention.
As for cash flow generated from operation, it is up 63.10% compared to 1Q16. Cash used in investment is higher 719.67% due to "property acquisition" as explained in Note # 10. Cash used in finance too is higher 83.26% due to '"lease payment" and "buy-back" program.
Finally, looking @ the stock from a monthly time frame, I see $ION has already completed its Wave 2 correction after 18 months. I smell a strong wave coming!
