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TAKE PROFITS Costain (COST)

Close Costain (COST) at market (128.6p)

After a strong run in Costain, we are banking a 94% profit. The stock has delivered a textbook recovery over the past year, climbing more than 40% as the market rewarded a shift back to solid profitability, strong free cash flow, and a reinstated dividend. The balance sheet remains robust with net cash, and valuation metrics like a forward PE below 10 and EV/EBITDA of just over 5 reflect continued value. That said, forward earnings are forecast to dip slightly and sales have declined year-on-year, so some of the recovery narrative is now fully priced in.

Technically, the shares have just broken out to new trend highs, which would usually be a positive signal. However, we are starting to see negative divergence on the RSI, suggesting that momentum is beginning to wane. With the price already up against resistance and a softer earnings outlook ahead, we feel now is a good time to take profits and redeploy capital into fresher opportunities.

Profit / Loss = +94%

COST Daily Candle Chart