The Brighton Pier Group PLC (PIER) consists of two divisions: The Brighton Marine Palace and Pier Company, which owns and operates Brighton Pier, an iconic landmark and leisure attraction in Brighton; and Eclectic Bars Limited, which is a leading operator of premium bars in the UK. The group is focused on creating a leading, experience-led attractions business operating across a diverse portfolio of experiential leisure and entertainment assets in the UK.
Following an £8.5m fundraising for the acquisition of The Brighton Marine Palace and Pier Company in April, on September 30th the company announced final results for the year. Group EBITDA improved to £1.4m (£0.7m), on revenues of £22.6m (£22.3m) and the company returned to deliver a profit of £0.9m (loss£0.5m). Chairman Luke Johnson said: “Our ambition is to become a leading, experience-led attractions business in the UK. I believe we now have the right group structure and experienced management team to deliver that ambition.”
The VectorVest stock screening system flagged the potential of PIER following the acquisition and fundraising. Although the stock is close to being fully valued at present, several metrics mark the stock as worthy of attention. The Earnings Growth Rate (GRT), which reflects a company’s one to three year forecasted earnings growth rate in percent per year flags the PIER GRT at 34%, which VectorVest considers to be excellent. Additionally the important metric of Value, Safety and Timing (VST) also sees a high score for PIER of 1.25, which is very good on a scale of 0.00 to 2.00. VST is computed from the square root of a weighted sum of the squares of RV, RS, and RT.
The chart of PIER is shown, with earnings per share (EPS) in the window below the price. EPS has grown strongly over the past 9 months and this is the engine that has driven the share price. Over a window of three years into the future the Earnings Potential of the share known as RV (Relative Value) on VectorVest is excellent but the share may have overshot in the short term. A pullback to the last old high may have started which is also a 62% retracement of the last trading range. Powerful confluences of varying techniques tend to act as a magnet for the market.
Breakout orientated traders may wish to wait for the share to make a new 52 week high. Traders whose style is comfortable with buying at well-defined support levels, within an uptrend, should look to accumulate the share around 110 to 115. As always start with a small position and add to the position, if and when the market moves upwards.
To summarize, PIER stock may be close to fully valued at present, but the VST rating and especially RV marks this out as a special investment case. The stock should also be considered a strong buy on any retracement from current levels.
October 28th 2016
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