Reversal for Grana y Montero S.A.A. ADR (NYSE:GRAM)?


Shares of Grana y Montero S.A.A. (NYSE:GRAM) last traded at $3.63. (NYSE:GRAM) performance year to date is -49.23%. The 200 day simple moving average is -40.95%. The 200 simple moving average (SMA) is considered a key indicator by traders and market analysts for determining the overall long-term trend. The price level in a market that coincides with the 200 SMA is recognized as a major support when price is above the 200 SMA or resistance when price is below the 200 SMA level.

Grana y Montero SAA operates as a holding company. The company through its subsidiaries operates engineering, construction, oil drilling, data processing services, telecommunications services, distribution of natural gas, and consulting. Grana y Montero SAA is based in Peru.

Grana y Montero S.A.A. (NYSE:GRAM) has been in the news for all the right reasons. Recently, Grana y Montero S.A.A. (NYSE:GRAM) announced that its net income in the first quarter (“1Q2017”), reached s/. 79.1 MM, which represents a 11.6% increase with respect to 1Q2016.

Backlog and recurrent businesses reached US$ 3,531 MM, equivalent to 1.95x the annual revenues.

The Barchart Technical Opinion rating is a 32% Buy with a Strengthening short term outlook on maintaining the current direction. Longer term, the trend strength is Minimum.

The Exponential Moving Average (EMA) is similar to a simple moving average (average price over a set period) but it utilizes a weighting factor that exponentially declines from the most recent data point (recent prices are weighted higher than oid prices). EMA analysis compares the short term (5 days and 13 days), intermediate term (20 days) and long term (50 days) EMA’s. The respective EMA’s will give bullish signals when trading above trailing EMA’s and below the current price and vice versa. EMA alerts include crossovers (i.e the 5 day EMA crosses above/below the 20 day EMA) and EMA convergencies (5 day EMA equivalent to 13 day EMA). The long term and short term EMA’s of 3.40 and 3.60 are lower than the current trading price suggesting a bullish pattern in both short term as well as long term. .

The relative strength index (RSI) is a momentum oscillator that is able to measure the velocity and magnitude of stock price changes. Momentum is calculated as the ratio of positive price changes to negative price changes. The RSI analysis compares the current RSI against neutral(50), oversold (30) and overbought (70) conditions. Alerts will inform you when stocks recede from oversold/overbought levels or breakthrough neutral (50). The current RSI is 55.57 suggesting a bullish price action.

Grana y Montero S.A.A. (NYSE:GRAM) is all set to announce its earnings on May 12/a. As per Zack’s analyst ratings, Grana y Montero S.A.A. (NYSE:GRAM) currently has an average brokerage rating of 4.17. On a scale of 1 to 5, a rating of 1 or 2 would indicate a buy, and a rating of 4 or 5 would signify a sell recommendation. A rating of 3 would indicate a hold on the stock. The consensus target price on (NYSE:GRAM) is $5.9 with a high of $6.5 and a low of $5.3.

As such, while we believe Grana y Montero S.A.A. (NYSE:GRAM) represents a compelling growth story exposed to several secularly attractive markets, it would be interesting to see how it fairs for long-term investors.

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