By Peet Serfontein & Zimele Mbanjwa
Dover Corporation is a diversified global manufacturer based in the United States (US), known for its innovative technologies across various industries. Dover's products range from industrial equipment to electronic systems and fluid handling solutions, serving markets such as energy, chemicals, and food processing.
The group aims to capture growth by making organic investments in capacity expansion, automation and productivity improvement, research and development, developing new products and technologies, improving digital capabilities, and expanding geographic coverage.
Technically, seasonal trends in the price support a promising investment opportunity (see the insert on the main chart). Historic data shows that the stock typically exhibits notable strength in April (+3.5%) and moderate gains in March (+1.4%) and May (+0.6%). This pattern suggests a seasonal trend where the stock tends to perform well in the early months of the year.
Furthermore, the price is in a well-defined price range (see the black converging trendlines) that supports a bullish case for a stock as it indicates accumulation and preparation for a potential breakout.
The 200-day simple moving average (SMA) of $185.82 is acting as major support - a further bullish confirmation.
Fading downside price momentum according to the Moving Average Convergence Divergence (MACD) and the recent upward trajectory of the On-balance volume (OBV) indicator, supports a bullish view.
| Share Information | |
|---|---|
| Share Code | DOV US |
| Industry | Capital Goods |
| Market Capital (USD) | 26.76 billion |
| One Year Total Return | 33.21% |
| Return Year-to-Date | 3.99% |
| Current Price (USD) | 195.08 |
| 52 Week High (USD) | 208.26 |
| 52 Week Low (USD) | 145.87 |
| Financial Year End | December |
| The stock has appreciated firmly over the past year, and various technical indicators suggest renewed upside to come. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY23 | FY24E | FY25E | FY26E | |
| Headline Earnings per Share (USD) | 8.80 | 8.17 | 9.34 | 10.19 |
| Growth (%) | -7.20 | 14.39 | 9.07 | |
| Dividend Per Share (USD) | 2.03 | 2.09 | 2.18 | 2.27 |
| Growth (%) | 2.81 | 4.26 | 4.14 | |
| Forward PE (times) | 23.89 | 20.88 | 19.15 | |
| Forward Dividend Yield (%) | 1.07 | 1.12 | 1.16 | |
| Earnings growth is expected to recover strongly from FY25, with moderation to a high-single-digit growth rate in the medium term. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view:
| Share Name and Position | ABBV - Stop loss (Close the position) |
KMX US - Buy (Continue to hold) |
TDG US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 183.08 | 76.44 | 1 292.86 |
| Current | 171.35 | 79.65 | 1 322.02 |
| Movement | -6.4% | +4.2% | +2.3% |
| The trade breached our stop loss level, and we've exited the trade. |
The stock is developing ascending triangle pattern, which remains for interest. The price remains above its 200-day SMA. The start of downside price momentum is concerning.
Our profit target is $90.00 with a trailing stop-loss at $74.40. Exit the trade by 31 January 2025. |
A smaller steep upward tilting inclining channel pattern is of interest. The stock is testing its 200-day SMA. Fading downside price momentum is supportive.
Our profit target is $1 500.00 with a trailing stop-loss $1 248.00. Exit the trade by 14 February 2025. |
| Share Name and Position | XLK US - Buy (Continue to hold) |
AMGN - Buy (Continue to hold) |
|---|---|---|
| Entry | 230.09 | 267.1 |
| Current | 227.76 | 269.43 |
| Movement | +0.2% | +0.9% |
|
A price in wave 5 of the Elliott wave pattern remains of interest. Remains above its 200-day SMA. Downside price momentum is a concern.
Our profit target is $256.00 with a trailing stop-loss at $220.00. Exit the trade by 24 January 2025. |
A price in a steady upward trend is encouraging. Remains above its 220-week SMA. Fading downside price momentum supports the trade strategy.
Our profit target is $300 with a trailing stop-loss at $255. Exit the trade by 26 March 2025. |
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