Shares with excellent prospects that do not rise

Equity markets like almost every manifestation of our life are dominated by demand and supply. Sometimes there are valuable stories that have been forgotten for years and stocks that fall by the wayside. The stock markets continue to rise but at Piazza Affari there are some stocks that, despite appearing to have a certain appeal, continue to stand still if not down. They are actions with excellent prospects that do not rise, indeed.

This seems to be the case with Carraro shares (CARR).

The stock closed the trading day on November 18 at 1.858.

In 2019 he opened trading at 1.618, scored the minimum at 1.578 and the maximum at 2.62. From the beginning of the year the performance is + 14.8% while the Ftse Mib has risen by 35.9%.

Carraro is therefore underperforming.

Where is the title headed?

Are actions to buy on this weakness in a portfolio diversification?

Why?

In an article a few months ago we put the accent on several favorable elements for this company:

a) undervaluation;

b) recommendations from analysts who estimate a target between 1.80 and 2.20;

c) expected profits in growth and possible detachment of an interesting dividend.

Despite all these elements favorable to the rise in prices, the stock, after reaching a maximum in area 2.02 in September, returned down to its current levels.

3-month forecasts on Carraro shares

Shares with excellent prospects that do not rise in the last two months have lost almost 10% in disagreement with the reference stock market. Can current price levels be a good entry point for the medium to long term?

Swings in progress on the monthly weekly time frame show a certain weakness and high probability that the movement in progress can continue towards the area 1.99 / 1.55.

QWhat is the optimal investment strategy that can be applied to the security?

As long as the stock does not return in monthly closing above 2.22, the weakness in progress could lead to strong declines in the medium term.

In light of what has been observed, our judgment is as follows:

although the company has characteristics of profitability, our trading indicators recommend that it is not the time to buy Carraro shares or to have them in the portfolio.