Data Insights

The 10 most overbought ASX 200 stocks – Week 10

Mon 04 Mar 24, 11:34am (AEST)
marketsasx exchange
Source: Shutterstock

The playbook for reporting season winners typically unfolds like this – First, the company delivers a stronger-than-expected set of numbers, the stock opens the session higher and closes even higher. Following this, the company receives a flurry of broker upgrades, positive media coverage and a continued surge in sentiment, propelling the share price further into the stratosphere. This week's overbought stocks list will feature several reporting season winners, including heavyweight names like Goodman Group (ASX: GMG) and Westpac (ASX: WBC).

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 is the most overbought stock on the ASX 200, with an RSI of 86.


Most Overbought ASX 200 Stocks

Ticker

Company

RSI

1-Month %

Close Price

Target price

Upside

CSR

CSR Limited

86

28.2%

$8.83

$7.17

-18.8%

360

Life360 Inc

85

48.9%

$11.30

$11.93

5.6%

GMG

Goodman Group

82

20.0%

$30.48

$31.03

1.8%

VNT

Ventia Services

81

18.8%

$3.80

$3.82

0.5%

TWE

Treasury Wine Estates

81

14.3%

$12.35

$13.10

6.1%

WBC

Westpac

81

11.1%

$26.41

$22.71

-14.0%

ALU

Altium

80

31.5%

$65.20

$63.06

-3.3%

ARB

ARB Corporation

80

23.5%

$41.37

$38.03

-8.1%

RWC

Reliance Worldwide

80

32.9%

$5.54

$5.23

-5.6%

LOV

Lovisa

79

42.1%

$31.97

$28.45

-11.0%

'Target price' is an aggregate of broker target prices from Refinitiv. Data of Friday, 1 March 2024 close

CSR is the most overbought stock on the ASX 200 thanks to a takeover offer from France's Saint-Gobain. The two companies have entered into a definitive agreement at a price of $9.00 cash per share. The agreed-upon price represents a premium of 33% above the volume-weighted average price before the takeover announcement.

Life360 experienced an extraordinary 38.5% rally last Friday after reporting full-year (calendar year 2023) revenue growth of 35%, to $305 million, positive adjusted EBITDA of $20.6 million and a net loss of $28.2 million. While these numbers might not appear amazing at face value, they were:

  • Net loss was 24% better than Goldman Sachs forecasts

  • Adjusted EBITDA was 29.6% ahead of Goldman forecasts and above the company's guidance of $12-16 million

2024-03-04 11 29 44-Window
Life360 12-month price chart (Source: Market Index)

Ventia Services is an infrastructure services company that operates in Australia and New Zealand. It provides a wide range of services such as construction, maintenance and engineering across sectors, including telecommunications, transport and utilities. The company's full-year results for the year ended 31 December 2023 broadly beat market expectations, including:

  • Revenue up 9.8% to $5.67 billion

  • NPATA up 12.5% to $202.1 million

  • Work in hand of $18.1 billion

  • Final dividend of 9.41 cents per share

  • Guidance for FY24 of NPATA growth between 7-10%

The NPATA (which excludes the amortisation of intangible assets) figure was 2% above Macquarie's expectations. The analysts said the company "continues to build a track record of earnings delivery aided by defensive, essential services revenues and a strong risk management and cost focus."

"Despite a strong recent run (+12% CYTD vs All Ords flat), VNT's 13.5x FY24e PE is not demanding ... The stock is trading at an attractive 9% free cash flow yield supported by consistent cash flow and its capital-light business model."

The stock finished the results session (21 Feb) up 4.5% and rallied another 11% over the next seven sessions.

2024-03-04 10 44 28-Window
Ventia Services 12-month price chart (Source: Market Index)

 

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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