A follow up to last week’s note, the hype of Pokemon Go continues to spread across the globe. Yesterday, the well-known Hong Kong listed technology stock Lenovo rose up by 7.6% to a two-months high, thanks to the company plans to launch Smartphone Tango with Augmented Reality features in September this year.
OTAS has effortlessly captured the positive sides of this stock in a glance. Particularly, if you take a closer look at the Insider Transaction of Lenovo for the past one year, OTAS shows that the Chairman of the Board & CEO, Yang, Yuan Qing, has increased stake by five times. The last period of time when Yang increased his stake was in August 2015 (three times) with average price of $7.18, subsequently the stock rose up to $8.76, a decent rally of 22% within three months. This current month, Yang has increased stake by 20,000,000 shares, a much larger number of shares than his previous stake increase. In fact, Yang has increased stake to a much more significant position of 8.12% from 6.79% (as shown in the table from Hong Kong Stock Exchange below), revealing his confidence about the company’s future share price.
HKEx filings – Yang Yuan Qing % of issued share capital from 6.79% to 8.12% as of July 8th 2016.
Moreover, the valuation of the name is at a very cheap level with P/E lower than most of its technology peers in Asia. And according to IDC, Lenovo has the highest market share in PC shipment and the overall global PC shipment in Q2 2016 has exceeded expectation. Combined with all the other positive flags from OTAS, we can expect a stronger demand of Lenovo’s sales in the second half of the year.
The OTAS Divergence chart shows that the price has been up +11.92% in a month, with short interest just up slightly by +0.82%. We do not see significant new shorts on back of the rally.