Little-fish telco's big swim
For more than a year, iiNet has been in an up trend, with the price rising more than 120 per cent since last July. Before that, the stock spent six months oscillating sideways (not shown on this chart).
The recent run up saw a peak in May of $6.89 in intraday trading. Since then, the trading range has been contained between $6.89 and $5.17.
Such a rally would likely begin with the stock breaking above $6.55, where the share price on its predicted trajectory is likely to break through the upper-resistance level. Ash says patience is advisable in the current situation and it may be wise not to enter the market before the $6.55 level is breached.
That level would put the price above the upward-trending 30-day moving average. Another positive sign lies in the fact the lower support line can be extended back down to the left, showing it effectively underpins last year's price action.
So where is an upside breakout likely to take us? One possible way to determine a target is to run a line upwards from the breakout the same length as the line labelled A, which forms the symmetrical triangle base. Line B gives an upper target of about $8.16. But that target is conditional on the price breaking through the resistance line in the next two to four weeks. If that doesn't happen, a new chart will need to be drawn.
iiNet has a dividend yield of 2.7 per cent, a price-earnings ratio of 15.7 times, is achieving sales growth of 30 per cent, and has a market capitalisation of $962 million. In the December half, net profits were up 122 per cent to $31.9 million.
The company has built up 1.7 million customers in the broadband, mobile, fixed line and online television sectors. Its internet service provider business uses DSL networks, which largely runs on Telstra copper.
iiNet has a strong history in the sector, having taken over industry pioneer OzEmail, launched with the help of now-opposition communications spokesman Malcolm Turnbull, who is said to have made $57 million selling what was initially a $500,000 investment.
This column is not investment advice. rodmyr@gmail.com
Up and up
Frequently Asked Questions about this Article…
iiNet has been in an uptrend, rising more than 120% since last July. The stock peaked intraday at $6.89 in May and has since been trading between about $6.89 and $5.17.
According to technical analyst Paul Ash, iiNet appears to be forming a symmetrical triangle. That pattern can signal a potential breakout — if the share price breaks above the resistance line it could lead to a new rally, while failure to break would require redrawing the chart.
The key level to watch is $6.55. Ash suggests patience and recommends waiting for the price to breach $6.55 — a break above that point would put the share price above the upward‑trending 30‑day moving average and increase the odds of an upside move.
Using the symmetrical triangle measurement method shown in the chart, an upside target of about $8.16 is suggested. That target is conditional on the price breaking through the resistance in the next two to four weeks; otherwise a new chart will need to be drawn.
The article reports a dividend yield of 2.7%, a price‑earnings ratio of 15.7 times, sales growth of 30%, a market capitalisation of about $962 million, and December‑half net profit up 122% to $31.9 million.
iiNet has built up about 1.7 million customers across broadband, mobile, fixed line and online television. Its internet service provider business largely uses DSL networks that run on Telstra copper.
The analyst explicitly advises patience and suggests it may be wise not to enter the market before the $6.55 level is breached. The article also states the column is not investment advice, so investors should consider their own research and risk tolerance.
Yes — iiNet has a strong industry history, including taking over pioneer OzEmail. The article notes OzEmail was launched with the help of Malcolm Turnbull, who is said to have later turned an initial $500,000 investment into $57 million when selling out.
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