Sonic Automotive, Inc. : Positive reaction on USD 21.6 level
June 19, 2013 at 09:33 am EDT
By
Share
BUY
Live
Entry price
Target
Stop-loss
Potential
$21.8
$0
$21.3
-100%
Sonic Automotive shows relatively strong fundamentals and is coming back to attractive prices.
From a fundamental viewpoint, the security is cheap with a PER of 11.02x for 2013 and 9.86x for 2014. Besides, EV/Sales ratio is low at 0.24x for this year.
Graphically, the stock is oversold and a positive reaction is expected on the currently tested level. In fact, this support is a trading opportunity in order to anticipate a technical rebound towards USD 22.6 and by extension towards USD 23.9.
Considering these different elements, it seems to be an appropriate timing to immediately take a long position in Sonic Automotive in order to benefit from the USD 21.6 support area. A first target price will be the USD 22.6 resistance. A stop loss order will be placed at USD 21.24.
Sonic Automotive, Inc. is an automotive retailer in the United States. The Company operates through three segments. The Franchised Dealerships segment provides comprehensive sales and services, including sales of both new and used cars and light trucks; sales of replacement parts and performance of vehicle maintenance, manufacturer warranty repairs, and paint and collision repair services, collectively, Fixed Operations; and arrangement of third-party financing, extended warranties, service contracts, insurance, and other aftermarket products, collectively, finance and insurance (F&I) for its guests. The EchoPark segment sells used cars and light trucks and arranges third-party F&I product sales for its guests in pre-owned vehicle specialty retail locations. The Powersports segment offers guests sales of both new and used powersports vehicles, such as motorcycles, personal watercraft, and all-terrain vehicles; Fixed Operations activities; and F&I services.
SONIC AUTOMOTIVE, INC. 
