James Hardie

Posted on | by Todd | Leave a Comment on James Hardie

Shares of James Hardie have opened over 3% lower on an announcement that a weaker-than-expected December quarter has forced the company to cut earnings guidance.

Shares traded down to a 3-month low of $19.60 as the the company announced that the group’s net profits fell 6% to USD 52.6 million.

This prompted a warning that earnings for the financial year up to March  would come in at between USD 245 and USD 255 million, versus expectations of between USD 252 to USD 269 million.

Chart – James Hardie

Amazon Shares Lower On Weaker Guidance

Posted on | by Todd | Leave a Comment on Amazon Shares Lower On Weaker Guidance

Shares of Amazon are down over 4% to $805.40, in after-hours trade, as negative Q1 revenue guidance overshadowed a solid Q4 earnings report.

Q4 earnings were announced at $1.54 per share versus a consensus of $1.35 per share. Q4 revenues came in at $3.5 billion versus $3.6 billion, which reflects a 47% increase on a year-on-year basis.

The Q4 revenue miss disappointed shareholders, but the Q1 guidance miss is what is really driving the stock price lower.

The company gave Q1 guidance in the range of $33.25 to $35 billion, lower than the expected range of $34.52 billion to $36.95 billion.

Key chart support for Amazon is now seen at or near $700.00.

Chart – Amazon

Visa Hits All-Time High After Q1 Results

Posted on | by Todd | Leave a Comment on Visa Hits All-Time High After Q1 Results

Q1 earnings results for Visa Inc. beat expectations on both the top and bottom lines.

Visa posted earnings of 86 cents per share on Q1 revenues of $4.5 billion. Analysts’ expectations were for earnings of 78 cents per share on Q1 revenues of 4.278 billion, the higher revenue number reflects a 25% increase on year-on-year basis.

Visa shares have rallied over 3% today to an all-time of 85.40 as payment growth came in at $1.9 trillion, up 47% on a year-on-year basis for the three months ending September 30, 2016.

Looking ahead, Visa affirmed its positive outlook with annual net revenue growth expected in the 16 to 18% range for 2017.

Tabcorp – Value Emerging

Posted on | by Leon Hinde | Leave a Comment on Tabcorp – Value Emerging

 

Tabcorp is a relatively defensive income opportunity for portfolios, with earnings supported by potential synergy savings after the Tatts integration.

The company continues to progress the merger proposal with Tatts and the ACCC is scheduled to release its statement of issues on the 23rd of February.

By applying a covered call option, we’re able to allow 5 – 10% capital growth from the current price, whilst still generating 10%+ in annualised cash flow from the dividend and call option income.

We expect modest earnings growth into FY18, which will place the stock on a forward yield of 5%. TAH goes ex-div on the 7th of Feb paying out $0.125

Our buy range for Tabcorp is between $4.20 & $4.50.

Chart – Tabcorp

US Market – Leading Indicators

Posted on | by Leon Hinde | Leave a Comment on US Market – Leading Indicators

We’ve been watching the rollover pattern in GE and the recent break of price support in Goldman Sachs as potential leading indicators. We now add UPS and FedEx as two additional stocks of interest.

FedEx Corporation is expected to report earnings in March. The report will be for the fiscal quarter ending Feb 2017. The consensus EPS forecast for the quarter is $2.62 whereas, EPS for the same quarter last year was $2.51.

United Parcel Services, (UPS), reported quarterly earnings and revenue that missed Wall Street’s expectations. Fourth-quarter earnings of $1.63 per share on revenue $16.93 billion and weak 2017 guidance, ($5.80 to $6.10 per share), has resulted in heavy sell-side pressure in the stock.

A point of note: In 2016, UPS re-purchased 25.5 million shares for about $2.7 billion.

The graphs below show a concerning trend of downside risk.

Chart – FedEx

Chart – UPS