Woolworths – Delivering 10% Cashflow

Posted on | by Leon Hinde

We recommend buying Woolworths and selling a March $29.01 European-style call option to enhance the yield.

Unlike American-style options, European-style options can only be exercised on the expiration date.

As such, the share price can trade through the strike price during the course of the option duration without being exercised.

The strategy delivers effectively 3 payments, September & March dividend, plus another $0.55 per share in option income.

Woolworths

 

Oil prices and stocks to watch

Posted on | by Leon Hinde

Oil prices remain well supported by recent platform closures in the Gulf of Mexico ahead of Hurricane Gordon, and Exxon’s warning of a supply crunch in Nigeria. 

We recommend buying the dip in Santos near the $6.50 level and also accumulating Origin on the current share price weakness.

OOO.ASX Oil ETF was added to our ETF model back in June and the ETF is now up 8.5%.

WPL and OSH look expensive at current levels and we’ll wait for the  next Algo Engine buy signal before considering these names.

STO

 

Oz Minerals Is Back In The Buy Zone

Posted on | by Todd

As a result of trade tensions between the US and China, prices of raw materials and precious metals have been trading sideways to lower.

The same price pattern has emerged for the shares of mining companies that export these materials.

In this environment, the shares of the lower cost producers will generally perform better as the raw material price begin to improve.

During the last quarter, OZL reported that their production costs for copper had dropped from 97 cents a pound to 72 cents a pound. In addition OZL has a strong balance sheet and may expand their share buyback plans over the next 6 months.

OZL is part of our ASX model 100 portfolio. We see good support in the $8.80/90 area with an upside target near $10.20 over the medium-term.

OZ Minerals

 

 

 

Evolution Mining – Buy

Posted on | by Leon Hinde

Our Algo Engine generated a buy signal in EVN, following the recent higher low formation.

Via our “Opportunity in Review” webinars and blog commentary, we recommended an entry level at $2.65.  The stock now looks to have found support and we suggest holding the position.

Apply a stop loss an a break of the recent low.

Evolution Mining

TCL Firms After Favorable ACCC Ruling

Posted on | by Todd

Shares of Transurban have been holding above the $12.00 mark since the ACCC approved the company’s bid on Sydney’s WestConnex tollway. Shares are currently in a trading halt.

The green light from the regulator clears the way for TCL to acquire other domestic assets to build on its future growth in earnings.

TCL currently own 15 of the 19 toll roads in Australia. This gives TCL an advantage over other bidders since many tollways feed into other strategic motorways.

The company plans to do a capital raising for $4.8 billion to fund the acquisition. $4.2 billion of this will be in the form of offering  shares at $10.80.

We don’t have a current ALGO buy signal on TCL and would look for lower levels to enter long.

Transurban Group