Hi, is GSY is a good buy just before Q3 ?

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Will like to get some shares of Gsy and wondering if it is a good idea right now. Q2 been solid and shares having a positive trend since 10 days. No news issued from the company so questionning myself about the next quarter.
What do you think?
Thanks
Richard

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Asked on October 14, 2020 5:33 am
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Private answer

Hey Richard. We're fans of GSY. In fact, it was one of the first companies we recommended here at Premium in 2018.

17% annual sales growth and 25% annual earnings growth over the last 5 years, pretty impressive. Also huge beat on earnings estimates last quarter (by 51.2%).

Long term, I wouldn't be disappointed getting into the company. In fact, Mathieu has been a long time shareholder of GSY.

My only concern, and it's much the same as yours, is it has been running up the last while and as a result it's JUST below overbought territory with an RSI of 69.6. Which means there is a possibility (but never a guarantee) we see a short term pullback. Maybe use that to time your entry if you're looking to take a position.

However, using the RSI is frustrating when the company continues to run upwards, and it does happen. It's never 100% accurate in detecting a pullback in an overbought stock or a bounce in an oversold stock.

The choice is ultimately up to you. If you decide to wait for a pullback because of the RSI indicator, you have to be comfortable paying more in the event the pullback doesn't happen.

Cheers

Dan

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Posted by Dan Kent
Answered on October 14, 2020 7:53 am