Sony Is Rated As A Strong Buy, It Just Hit Oversold Territory, And It Recently Hit Support

The history of Sony Group (SONY) is an interesting one, from its beginnings in post World War II Japan to the current product offerings. It has introduced iconic electronic items such as the Walkman, the Watchman, and the Playstation. The electronics manufacturer still makes the Playstation and today’s product lineup includes smartphones, TVs, Blueray and DVD players, cameras, and various audio products such as speakers and headphones.

As fun as it is to look back on some of the product offerings of Sony, I am more interested in the stock today and what I believe is a great buying opportunity. The stock gets a “strong buy” rating from Tickeron’s scorecard and we will go over the factors for that in a minute. What first got my attention about the stock was the weekly chart and how a recent decline had put the stock in overbought territory for the first time in two years, at least based on the weekly stochastic indicators.

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In addition to the bullish crossover from the weekly stochastic indicators, we also see how there is a trend line that connects the lows from March and October 2020. The recent pullback caused the stock to dip just below the trend line, but it didn’t close below the line three weeks ago. This suggests to me that there is pretty strong support in the area.

Huge Earnings Growth in Q4 Highlights Strong Fundamentals

Sony reported fiscal fourth-quarter earnings back in April and the company blew away estimates and the previous year’s results. The EPS came in at $0.81 and the consensus estimate was $0.37. The overall net income jumped 746.3% to $1.01 billion. Revenue jumped to $20.45 billion and that was an increase of 27% over Q4 2019 and it was $1.94 billion better than the consensus estimate.

Those figures marked big changes in the earnings and revenue growth, but earnings had been growing pretty steadily over the last few years. Earnings have grown by an average of 25% per year over the last three years. Revenue has stalled, only growing by 1% per year in the last three years.

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