WHILE this column generally likes to give readers an analysis of stocks we haven't written about before, it is sometimes valuable to revisit situations when things change to see how our ideas have fared in the real world and present new opportunities.
Back in June when we analysed energy supply company Duet, our analyst, Paul Ash, Victorian president of the Australian Technical Analysts Association, identified a resistance level at $1.90 that it had just broken and said strength would continue if it stayed above this line.
That resistance level was in place for three years. In July, after the aborted breakthrough attempt beginning in April that we referred to in the last column, Duet went through that resistance line and has maintained the gain.
In September, it reached a post-crash high of $2.20. Although it has since fallen back a little, Ash says it remains in a broad uptrend that began in April and is reflected in higher lows and higher turning points.
That uptrend has recently flattened but the stock remains in a pattern above $2. If you're in the market with Duet, Ash says strength and the possibility of further gains remain while the price holds above $2. A weekly close below $2 should trigger an exit, he says.
If you're looking at buying, then a trigger price would be at $2.12 or the recent high of $2.20. If the pattern of strength continues, Duet might rally towards $2.65 over the next six months, Ash says.
Anyone planning to gain exposure to Duet by holding direct stock will enjoy an 8 per cent dividend yield. Its return for the past year has been an outstanding 26.4 per cent and 15.7 per cent over three years.
It raised capital last year at $1.52, giving a handy profit to those who bought in. The money raised helped finance investments in the Multinet Gas business and the Dampier to Bunbury gas pipeline.
The recent decision to move management rights inside the group by paying out AMP Capital and Macquarie Group's management rights for $95.6 million should benefit shareholders in the longer term.
Duet is what is known as a stapled security, which means it is made up of different entities brought together and listed as one. In Duet's case, the stock is built up of some energy trusts run as managed investment schemes and a public company.