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Data Insights
The 10 most overbought and oversold ASX 200 stocks – Week 14
By
Kerry Sun
Tue 02 Apr 24, 12:47pm (AEST)
Source: Shutterstock
Stocks in article
Key Points
- ASX 200 companies under takeover offer dominate the overbought list
- Analysts believe CSR, Virgin Money and Altium deals are likely to proceed, subject to regulatory approvals
- February reporting season losers like Kelsian, TPG and IDP Education continue to linger in oversold territory
The ASX has been buzzing with M&A activity, with today's notable events including small cap utilities provider TPC taken out by Wollar Solar and Austral rejecting a $1 billion bid from South Korea's Hanwha. The takeover bids have kept a number of ASX 200 names like Virgin Money, Altium and Alumina remain in overbought territory.
The 14-day Relative Strength Index is a momentum indicator that measures the magnitude and speed of recent price changes to assess whether or not a stock is overbought or oversold.
An RSI of 70 or above is considered to be overbought, which means the stock is rising too quickly and likely to experience a pullback. Meanwhile, an RSI of 30 or below is considered to be oversold, which means the stock is falling too quickly and is likely to experience a rebound.
Based on this indicator, CSR (set to be acquired by France's Saint-Gobain at $9.00 cash per share) remains the most overbought stock on the ASX 200 with an RSI of 83.
Most Overbought ASX 200 Stocks
Ticker | Company | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
CSR | 83 | 0.1% | $8.82 | $7.17 | -18.7% | |
Webjet | 81 | 27.1% | $8.83 | $9.27 | 5.0% | |
Goodman Group | 76 | 17.3% | $33.81 | $31.60 | -6.5% | |
Virgin Money | 76 | 32.6% | $4.11 | na | na | |
Arena Reit | 76 | 18.2% | $3.97 | $3.95 | -0.5% | |
Ramelius Resources | 75 | 32.9% | $1.86 | $1.91 | 2.7% | |
Altium | 74 | 0.0% | $65.22 | $62.86 | -3.6% | |
Alumina | 73 | 32.7% | $1.42 | $1.22 | -14.1% | |
Orica | 73 | 7.3% | $18.26 | $18.64 | 2.1% | |
QBE Insurance | 73 | 5.4% | $18.13 | $18.75 | 3.4% |
'Target price' is an aggregate of broker target prices from Refinitiv. Data is current as of the close on Thursday, 28 March 2024
Analysts are expressing confidence in the likelihood for three of the four takeover bids reaching completion. Here's some of the latest insights from major brokers regarding each of the deals:
CSR: "While the offer is subject to customary regulatory and shareholder approvals, we think it is likely to proceed," Macquarie analysts said in a note dated 26 February. As the transaction appears likely to proceed, the target price was moved to the bid price of $9.00.
Virgin Money: "VMUK is trading near the offer price, which is ~13% above our previous target price. We believe there is a high probability of the deal being completed, with a small chance of an improved offer from a competing bidder," Macquarie analysts said in a note dated 11 March. "We aren't ruling this out with potential interested parties including Natwest, Santander UK and HSBC."
Altium: Of eight approvals required, CFIUS is the biggest hurdle. Lodgement expected in March, with the process usually taking 90 days. As such, our base case for deal close is in fourth quarter of 2023," Macquarie analysts said in a note on 28 February.
Alumina: Aloca's bid for Alumina is currently non-binding, indicative and conditional. The company's board, including chief executive Michael Ferraro has recommended shareholders to vote for the deal.
Most Oversold ASX 200 Stocks
February reporting season losers continue to dominate the oversold stocks list. This can be broken down into two themes, including:
Companies that reported results that missed analyst expectations (e.g. Kelsian Group, Seek and TPG)
Companies suffering from broader issues (e.g. IDP Education and regulatory concerns for key markets, AGL and falling wholesale energy prices)
Ticker | Company | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
Spark New Zealand | 27 | -9.2% | $4.37 | $4.58 | 4.8% | |
Chorus | 34 | -5.5% | $7.00 | na | na | |
Aristocrat Leisure | 36 | -6.4% | $43.00 | $48.05 | 11.7% | |
Kelsian Group | 37 | -0.3% | $5.78 | $7.07 | 22.3% | |
Collins Foods | 37 | -7.8% | $10.14 | $11.85 | 16.9% | |
TPG Telecom | 38 | -4.5% | $4.51 | $5.15 | 14.2% | |
Washington H Soul Pattinson | 38 | -3.4% | $33.61 | $35.60 | 5.9% | |
IDP Education | 39 | -5.6% | $17.92 | $24.19 | 35.0% | |
Seek | 42 | -3.1% | $25.05 | $27.84 | 11.1% | |
AGL Energy | 42 | -2.5% | $8.34 | $10.79 | 29.4% |
'Target price' is an aggregate of broker target prices from Refinitiv. Data of Thursday, 28 March 2024 close
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