Stock to buy 2013 #1: ASL Marine

I am waiting for the market correction, and if it really comes, I want to buy some stocks. ASL is one stock on my mind.

Fundamentals:

2Q13 earnings for ASL Marine in line, +40% y-o-y; gross margins continue to impress. The slow YTD order wins is not a concern; we expect back-end loaded wins as yard capacity frees up. While 1H FY13 forms 40% of our full year forecast, we keep our numbers intact as we expect a stronger 2H13.

Maintain BUY, TP S$0.90. ASL remains firmly on track to post a strong 52% earnings recovery in FY13F, supported by its S$528m shipbuilding orderbook which provides visibility up to end FY14. Technically, the stock has re-based at $0.73 (support) over the past 3 weeks and looks ready to resume its steady rising trend for a re-test of the post-GPC high at $0.795. Based on Fibonacci projection, a rise above this level should lift the stock to $0.95 in coming month(s).

 

(Source: DBS Vickers)

 

Technicals:
Definitely on an uptrend. However, I am not too excited about the stock now, as it just made a 52-week high, and has displayed bearish engulfing. But, will relook if correction takes hold.