A very profitable investment in the long run with an undervalued security, but close to historic lows

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The very profitable investment that we want to talk about in this article is not recommended for those who have no patience and are fond of fast trading. In fact, there are few doubts among the experts on the goodness of the Mondadori title. However, the stock market trend of the last three months is completely to be forgotten.

Indeed, the stock has lost over 30% compared to a media sector that has lost 15% and an Italian market that has lost 14%.

How to explain this performance?

Certainly the pandemic from Covid-19 has not helped the accounts which, in fact, have not been positive (click here for more details). Furthermore, it should not be forgotten that the company has decided not to distribute the dividend in order to keep the profits destined for the coupon in reserve. On the other hand, canceling a dividend that would have yielded more than 5% is a blow that could not have gone unnoticed.

However, the average consensus among analysts is Outperform with an average target price which expresses an underestimation of approximately 50%.

Very profitable investment in the long term: when to buy according to the graphic and forecast analysis?

Mondadori (MIL: MN.) Closed the session on 2 June at € 1.032, down 0.19% on the previous closing.

The projection in progress on the weekly time frame is bearish, but cannot overcome the first obstacle (€ 0.9441 area) along the path that leads to the first price target in the € 0.2085 area. This scenario would lead Mondadori to update its historical lows that currently pass in the € 0.6 area. Note that in the event of an area breakdown of € 0.9441, the next intermediate target passes through the area of ​​€ 0.6663. This level in the past many times has led to upside reversals. In the case of breakage of the support in the € 0.9441 area, therefore, it could be an excellent entry level.

If then the fall were to reach the 1st price target, € 0.2085 area would be an excellent entry point for a very profitable investment in the long run.

mondadori

Mondadori: bullish projection in progress on the weekly time frame. The blue line represents the running bisector levels; the red line shows the levels of The New Law of Vibration. The bottom panel shows the BottomHunter signal which, when 1 is valid, indicates the formation of a minimum on the considered time frame.



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