Garuda Indonesia (GIAA)

Garuda, one of Indonesia's best airline - and yes it is government owned, BUT they've raised the bar in regards to the services and quality of their plane and flight experiences. More routes are being flown by garuda, even to the small cities in Indonesia, making them a bigger player nationally. Garuda is currently in a bad shape, as it is not an old story. The net income of this airline has been negative across 2013, but offset it during Q4 2013 by 38% YoY. Early 2014, earnings has not been a cakewalk for the airline, Q1 is on par YoY, and Q2 only increased by 1.4% YoY. Net income has been treacherous, Q1 2014, a falling NI by more than 400% YoY, and Q2 is worsening by 135% QoQ. the chart is showing a massive upward trend during a couple of weeks, and people have made profit Friday alone. Foreign money already net sell almost 4mio in value, but the remaining 4,6mio are still holding on to it.
Foreign net buy starts on the 15th of October of 1.4mio in value, which bring the price upward by 10% in just one day. The next three days, foreign sold about 1.2mio, the price made a slight correction during the 16th, but momentum occurred during the 17th and 20th. The below chart is showing the total values of trades occurred during each day since the rally on 15th of October. And you can compare with the price movement on the second table below.

Net income maybe dodgy, but the airliner is currently growing. Investing.com covered news on Garuda that the airliner ordered USD 4.9bio worth of Boeing planes (you can read more here). The news also mentioned that Garuda is targeting 250 aircraft by 2025, very ambitious. Garuda also managed to open more route within Indonesia itself, and one of them is an inter-island flight within the island of Kalimantan. To top that off, Garuda recently made a collaboration with Citibank Indonesia and launched a credit card or travel card (read more here).

With all the good news, the correction is for a short term and this airline is still growing. Long term growth is promising and technical chart is showing an oversold trend, RSI and MACD confirms it. If price breaks fibonacci 61.8%, then the correction will be a longer. Buy Garuda on Weakness point.

Comments

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