BHP Firms On US Asset Sales

Shares of BHP have jumped over 2% to $34.50 in early trade following the announcement of the sale of their onshore shale assets in the USA.

British Oil giant BP will pay USD 10.5 billion for the bulk of the energy assets, while Texas-based Merit Energy will buy the other $300 million worth of assets.

The company has pledged that the USD 10.8 billion from the sales will be returned to shareholders, but hasn’t been clear about how and when.

BHP has rallied from the April “higher low” formation and is now trading at the upper range of our price target.

Our advice to blog readers in April was to buy BHP and se  ll the $35.00 strike call options to enhance the cash flow.


NCM’s Q4 Production Up 15%

Shares of Newcrest mining have spiked over 4.5% higher to reach $21.00 in early trade.

The catalyst for the move was the release of their Q4 production numbers.

The Gold miner reported their overall production rose 15% for the 3 months to June 30th from 551,000 ounces to just under 635.000 ounces.

This improved result places their full year production in the upper end of their expected 2.25 to 2.35 million ounces. All-in sustained costs were unchanged at $795 per ounce.

We see the next area of chart resistance for NCM near $21.55, with a longer-term target in the $24.25 area.

Newcrest Mining



James Hardie : A Buy/Write Strategy

Our Algo Engine generated a buy signal for JHX recently at $21.50.

With the US housing cycle remaining strong, (although weak numbers in June are the reason for some caution), and James Hardie having a dominant market position in fiber cement, we think the long term trajectory for earnings & margins are strong.

FY19 revenues should increase 20% and underlying EBIT will jump from $380m to $480m.

With the stock trading on a low 2.2% forward yield, we recommend adding a covered call option to enhance the income.

Selling the $23.50 October strike adds $0.50 per share of additional cash flow.

JHX goes ex div $0.30 on the 12th of December.


NCM Firms In Front Of Tomorrow’s Quarterly Report

Shares of Newcrest mining are consolidating near three-month lows in front of the release of their Quarterly production report tomorrow.

Our ALGO engine triggered a buy signal on NCM on Monday at $20.04 and the stock has been added to our ASX Top 50 model portfolio.

The recent slide in Spot Gold appears to be finding support around the $1200.00 area, which is a net positive for the stock.

We have a medium-term upside target for NCM in the $24.25 area.

Newcrest Mining

Buy The Dip In Evolution Mining

Our ALGO engine triggered a buy signal for Evolution Mining into yesterday’s ASX close at $2.92.

This “higher low” pattern is referenced to the intra-day low of $2.86 posted on June 19th.

A recent broker report suggests that EVN has several overseas mining assets on its acquisition  radar.

The report also showed that EVN’s cash balance increased over the last quarter by $115 million to $332 million, while the company’s net debt fell from $187 million to $71 million.

EVN was added to our ASX Top 100 Model portfolio on July 17th.

We see further support in the $2.80 area  and we have medium-term upside target of $3.70.

Evolution Mining





Buy RIO Ahead Of Earnings Results

Our Algo Engine triggered a buy signal recently in RIO at $79.00.

We retain our “buy” bias on RIO heading into the 1H earnings result on the 1st of August. Half year forecast net profit after tax is estimated at $4.6b 

The result will likely be ahead of analysts forecasts and the company should also announce an increase to their share buy-back program.

RIO goes ex-div $1.40 on the 10th August.

Rio Tinto

China – Cannons Are Firing

During times of conflict, there’s a saying in the market:  “you should buy when the cannons are firing and sell when the champagne corks are popping”.

More specifically, the current trade war between the US and China is likely to be resolved and the 20% correction in Chinese equity indexes may be looking overdone.

The IZZ iShares ETF provides exposure to large cap Chinese stocks. We see a buy side opportunity at $57.00