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Weekly: Eden Energy drops 7.1% on high volatility and expanding price range



News Bites - Stock Report
February 19, 2011

STOCK REPORT

Eden Energy (EDE.AU), Australia's 155th largest Energy company by market capitalisation, traded between an intraweek high of 9.90c and a five-week low of 8.10c. Its weekly volatility (highest price minus lowest price/lowest price) of 22.2% was 0.63 times average weekly volatility of 35.2%, up from 9.4% in the previous week and 7.1% in the week before previous week. The stock fell for a third week on Friday. The share price plunged 0.70c (or 7.1%) to 9.20c in the week ending Friday February 18. Compared with the All Ordinaries index which rose 55.5 points (or 1.1%) in the week, this represented a relative price change of -8.2%.

TECHNICAL ANALYSIS

Downtrend

Price Volume Trend: the price crashed 23.3% in the last month. This has been exacerbated by robust volume 2.1 times average for the month.

Relativities: in the Australian market the stock has a trailing week relative strength of 12.28 indicating it is trailing 87.72% of the market.

Breakdown: in the last six months the stock has hit a new 52-week low twice. The bears are maintaining control with price open, high, low and close being below yesterday's levels.

Support: the support price is hovering at the 8.10c level. Volume traded at the weak support price zone was 0.3 times average during the single occasion when the support price was breached. In the last one month the first low was at 8.10c on Feb 16.

Resistance: in the last one month the high was at 13.0c on Jan 19.

PRICE VOLUME DYNAMICS

Moving average price (MAP): the price to 200-day MAP ratio is 1.42, a bullish indicator. In the past 200 days this ratio has exceeded 1.42 twenty-two times suggesting further upside. The stock is trading above both its MAPs and the 50-day MAP of 8.11c is higher than the 200-day MAP of 6.46c, a bullish indicator. The 200-day MAP has increased to 6.46c. An increase is another bullish indicator.

Exponential Moving Average Price (EMAP) [with higher weightage to recent prices]: the price to 50-day EMAP ratio is 1.1, a bullish indicator. In the past 50 days this ratio has exceeded 1.1 28 times suggesting further upside. The 50-day EMAP has increased to 8.43c. An increase is another bullish indicator.

Relativities: in the Australian market of 1,440 stocks & 77 units traded today, the stock has a 6-month relative strength of 76 indicating it has outperformed 76% of the market.

Volume and turnover period: there were 2,498,802 shares worth $220,050 traded. The volume was 1.03 times average trading of 2,415,209 shares. The turnover rate in the 12 months to date was 56.6% (or a turnover period of 1 year 9 months). This average length of ownership of the stock at 1.5 times the average holding period of 1 year 2 months for stocks in the S&P/ASX 200 index suggests a larger number of core investors, making a long-term investment safer.

% Discount to high: the last price is at a discount of 44.2% to the 12-month high of 16.50c one month ago on 18 Jan, 2011.

Volume weighted price (VWP): the price is at a discount of 11.5% to the 3-month volume weighted average price of 10.40c, which may appeal as a value proposition.

THIS WEEK'S PRICE PERFORMANCE RANK IN INDEX AND SECTORS

The stock is in 1 index and 2 sectors.

The stock's fall of 7.1% for the week went against the trend set by the following index and sectors (rank by percentage price change of stock for 1 week;12 months in sector/index in brackets):

Energy sector (rank 174;109 out of 215) which was up 45.8 points or 1.2% to 3,873.6,

All Ordinaries index which was up 55.5 points or 1.1% to 5,026.1,

Total Australian Market (rank 1314;819 out of 1726) which was up 34.1 points or 0.8% to 4,382.

The Energy company sector is the 4th largest by market capitalisation out of Australia's 25 sectors. It is made up of 225 publicly listed companies with a combined market capitalisation of $141.8 billion. In 2010 earnings for the sector fell 71.9% compared with those of 2009. The main players in the sector include Woodside Petroleum, Origin Energy, Santos and Coal & Allied Industries.

SHAREHOLDER RETURNS

Trailing five weeks: the stock fell thirteen times (52% of the time), rose seven times (28% of the time), was unchanged four times (16% of the time) and was untraded once (4% of the time). The volume was 3.7 times average trading of 12,076,044 shares. The value of $1,000 invested five weeks ago is $1,070 [vs $1,028 for the All Ordinaries index] for a capital gain of $70.

Trailing thirteen weeks: the stock fell twenty nine times (47% of the time), rose nineteen times (31% of the time), was unchanged eleven times (18% of the time) and was untraded three times (5% of the time). The volume was 3.1 times average trading of 28,982,506 shares. The value of $1,000 invested thirteen weeks ago is $1,957 [vs $1,070 for the All Ordinaries index] for a capital gain of $957.

Trailing Two Years: the value of $1,000 invested two years ago is $634 [vs $1,631 for the All Ordinaries index] for a capital loss of $366.

FINANCIALS

Annual Report for the year ended June 30, 2010 (year-on-year comparisons with previous corresponding period)-

Favourable Changes: Retained earnings to total assets up 29.76% to 228.1%.

Unfavourable Changes: total revenue down 44.33% to $A451,356 ($US384,330); loss of $A2.7m ($US2.3m); EBIT Margin of -955.6%; losses in all of the last 5 years; EBITDA loss of $A2.6m ($US2.2m); total liabilities to total assets up 11.01% to 0.1; current ratio down 52.85% to 2.0; Net tangible assets per share down 49.47% to $A0.01663 (US1.4c); operating cash flow is negative; total number of shares outstanding up 0.04% to 181,714,373; Working capital to total assets down 66.29% to 9.2%; total revenue to total assets down 33.8% to 0.03.

Major Common Size Ratios: total non current assets to total assets up from 64.19% to 81.25%; intangibles to total assets up from 55.31% to 68.74%; total current assets to total assets down from 35.81% to 18.75%; current debtors to total assets down from 14.51% to 8.02%; cash to total assets down from 18.46% to 7.53%; depreciation to sales up from 6.25% to 12.55%; interest expenses to sales down from 28.29% to 0.02%.

FUNDAMENTALS

Price to NTA: The price to net tangible asset backing per share is 6.5.

ISSUED CAPITAL

Based on 213,989,654 issued shares the market capitalisation is $19.7 million.

ACTIVITIES

Eden Energy Ltd is a diversified clean energy company that listed on the Australian Stock Exchange in May 2006. Eden has interests in hydrogen production, storage & transport fuel systems, including the low emission Hythane hydrogen-methane blend, coal seam & abandoned mine methane in the UK, conventional gas in SA, low temperature pyrolysis research into hydrogen production & geothermal energy production.

BUSINESS NEWS ROUND UP

The last 5 snippets from News Bites were:

February 07: Elders expects 15 % underlying earnings jump

Elders Ltd expects underlying earnings before tax for the six months to March 31, 2011 to be more than 15% higher than the $2.2 million of last year. In response to an ASX query, the company says it does not expect this potential variation to be material, and it is considered conditional and uncertain, particularly due to the effects of recent rainfall, floods and cyclones on trading.

January 19: Eden Energy director buys on-market

Eden Energy Ltd director Gregory Solomon indirectly bought 200,000 shares for $22,027 on-market on January 17, 2011. He directly holds 300,003 shares and 1 million options, and indirectly holds 3,731,299 shares.

January 12: Elders 'significantly impacted' by Queensland floods

Elders Ltd said today that operations in Queensland were being significantly impacted by flooding, with the effects ranging from temporary suspension of operations, damage and loss of property and, most tragically, loss of life. Elders recorded its condolences to Yvette Purcell, an employee at the company's Tara branch whose husband Graham died while engaged in voluntary water carting.

January 06: Eden Energy expects US production in 2011

Eden Energy Ltd said on January 5 that it expects to start commercial production of carbon nanotubes/carbon fibres/ hydrogen at its Pyrolysis project in the US in 2011. In its December quarterly reported the company said scale-up was underway at its US subsidiary, Hythane Company, where a catalyst production facility has been built and is operating and two scaled-up units, one for batch production and the other for continuous production have been designed, built and commissioned. Encouraging production results of both carbon nanofibres, multi walled carbon nanotubes and hydrogen were received from first batch production unit using catalyst produced by Eden in US. The first continuous production unit has been designed, built and has produced what appear to be good quality carbon fibres and carbon nanotubes which are being further assessed. Through the Pyrolysis process that has been developed, methane (natural gas) is broken down into its atomic constituents of hydrogen gas and solid carbon, without the production of carbon dioxide.

November 15: Elders reports underlying profit of $3m

Elders Ltd announced a statutory net loss of $217.6 million for the year ended September 30, 2010 compared with a loss of $432.7 million on continuing revenue of $2.07 billion compared with $2.34 billion last year. Underlying after-tax profit attributable to shareholders was $3 million compared with a loss of $24.4 million previously.

Currency Conversion: Australian Dollar AUD1= US$1.0113 [or US$1= AUD0.99]; Against the US$ the AUD advanced (or 1.2%) for the day; increased 0.7% for the week; increased 1.2% for the month; surged 19.2% in the past year. $1 = 100c.

Source: www. BuySellSignals. com

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