Sydney Airport – Generating 10 – 12% cash flow

Posted on | by Leon Hinde | Leave a Comment on Sydney Airport – Generating 10 – 12% cash flow

With bond yields likely to stabilise and strong passenger growth numbers, (across Australia’s east coast), we see SYD as a buying opportunity.

We also recommend selling covered call options to enhance the yield.

SYD is expected to release full year traffic numbers in late January 2018.

Sydney Airport

Wesfarmers – Full Value (Sell Call Options)

Posted on | by Leon Hinde | Leave a Comment on Wesfarmers – Full Value (Sell Call Options)

Wesfarmers (WES) has agreed to sell its Curragh coal mine in Queensland to US miner Coronado Coal Group for $700 million plus a value share agreement.

We suggest the company is likely to reduce borrowings to some degree, as earnings have been reduced, and subject to franking credits may return capital to shareholders.

We believe a reasonable strategy is to sell $45.00 June call options for $1.02 credit and expect to keep exposure to the $1.03 dividend declared on the 20th February.

Wesfarmers

 

 

Buy Amcor & AGL

Posted on | by Leon Hinde | Leave a Comment on Buy Amcor & AGL

In an increasingly expensive market, finding low volatility investments at a discount can be difficult.

We consider the recent sell-off in AMC and AGL  represents a low risk entry level for a buy-write strategy.

AMC pays a 25.6 cent dividend on the 24th February and AGL pays  41 cents on the 23rd February.

We are then adding covered call options to enhance the yield and allowing for moderate capital growth.

The strategy is achieving 10 – 12% cash flow on an annualised basis.

 

 

 

 

Potential Triple Top In Woolies

Posted on | by Todd | Leave a Comment on Potential Triple Top In Woolies

Our ALGO engine triggered a sell signal on WOW on November 2nd at $26.05.

Since then the share price has lifted over $1.00 as speculation continues surrounding the ACCC’s decision to reject BP’s offer to buy WOW’s 500 petrol station network.

A potential “triple top” formation is in play in the $27.70 range and we suggest exiting long positions for now.

CFD traders can look to sell WOW on our SAXOGo Platform in the $27.30 area with an initial target of $26.15 and a $28.10 stop.

Woolworths

 

 

 

The Technical Picture Is Improving For Telstra

Posted on | by Todd | Leave a Comment on The Technical Picture Is Improving For Telstra

Shares of TLS have traded back into a significant technical price area.

Looking back to mid-August, the share price was beaten down from $4.33 to $3.50 just 10 trading sessions. This price action has left several gaps on the daily chart which are now being challenged.

TLS goes ex-dividend on March 1st and is on about a 6% yield at current prices.

It’s reasonable to believe that the current technical buying could lift the share price back over $4.00, which would still pencil out to over 5% yield, fully franked.

We still believe accumulating shares of TLS in this price range will benefit investor portfolios throughout 2018.

Telstra

 

Buy The Dip In Westfield Corp

Posted on | by Todd | Leave a Comment on Buy The Dip In Westfield Corp

It’s been just under a month since the Westfield board recommended shareholders accept $32 billion takeover from French firm Unibail-Rodamco.

Since then, the share price has softened, has never traded at the cash and script offer of $10.01 per share, and closed at a post-announcement low of $9.18 on Friday.

Part of the recent weakness seems to be tied to the cash component of the deal valued at USD 2.67 per share.

The AUD/USD has risen from .7550 to .7850 since the deal was announced, which roughly corresponds to the 4.5% fall in the WFD share price since December 12th.

With the stock going ex-dividend on February 13th for 16.43 cents per share, we believe WFD is good value in this range for a move back into the $9.80/90 area in the near-term.

Westfield