Starhub (CC3) - a good defensive play during uncertainty period and post Singapore Election 2011 | Technical Analysis

On 5th May 2011, StarHub (CC3) Ltd reported its 1Q11:

1) Revenue inching up 0.2% YoY to S$558.5m (fell 0.1% QoQ due to seasonality),

2) Net profit, on the other hand, jumped 62.1% YoY to S$69.1m (but slipped 14.1% QoQ).

StarHub has declared a quarterly dividend of S$0.05/share, payable on 2 Jun 2011. For the entire 2011, StarHub continues to expect single-digit revenue growth, with service EBITDA margin coming in around 30% (versus 28% in FY10).

Starhub stock price has ran up after it has clear the consolidation band after end Mar 2011. Prices soared as high as $2.90. RSI has shown bearish divergence and maintained at overbought levels. ADX has eased. This should curb further stock price uptrend for near term. Immediate support will be at $2.72 and $2.65. If the dividend payout projections are accurate and consistent for the entire year, the stock should be a good buy on dividend play (approximately 7% yield).