Over the last three years, ALL & TWE have been among the best performing stocks within the ASX100 model portfolio.
Both names now reflect a “higher low” chart formation and Algo Engine buy signals.
TWE’s 20% sell-off post FY18 results provides an attractive entry point. FY19 EPS growth is still likely to be in the range of 15 – 20%.
Flight Center is under ALGO Engine buy signal and with the share price retracing from $70 back down to $45.50, we now believe buying demand will increase.
Flight Centre
Shares of Amcor are poised to rally as the Bemis takeover deal is finalised.
Hedge funds who are short Amcor & long Bemis will begin unwinding the trade, which will add to the AMC buy-side demand.
We recommend accumulating Amcor at current levels.
In the local entertainment sector, Crown faced heavy selling last week following soft earnings numbers. With the stock now trading at $12.00, we believe value is now being presented.
Crown
We recommend buying BXB at $10.50 or better.
Investors can then look to sell the $11.01 Euro covered call option into March 2019, whilst staying exposed to the 14.5 cent March dividend.
Brambles
Our Algo Engine generated a buy signal in Wesfarmers following the price retracement from $51 back down to $46.
This “higher low” pattern is referenced to the intraday low of $43.70 posted on May 10th.
WES has been on our watch list with a target entry range of $45 – $46.
We now recommend accumulating the stock, with a view towards selling covered call options to enhance yield.
Wesfarmers
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Downer EDI re-affirmed 13% EPS earnings growth, which looks attractive against an average market growth rate of 5 – 7 %.
Macro conditions remain positive in DOW’s key markets across education, health, mining road & rail transport.
Based on FY20 EPS growth we now have DOW on a forward yield of 4.4%.
Internal momentum indicators are pointing higher and we see scope for an upside move into the $7.80/90 range.
Downer EDI
Crown’s trading update was weaker than expected as main gaming floor revenue was down 0.6%.
Non-gaming revenue growth was 3.5%, while VIP turnover growth was up 13%.
Star Entertainment showed domestic revenue growth of +6.7% but VIP growth disappointed with it coming in flat on the prior period.
Crown looks like good “value” at $12 and is supported by a current ALGO Engine buy signal.
Aristocrat (ALL:ASX) is also looking well supported near the $26 range.
With the USD starting November with a weaker tone, gold rallied almost 1.5% overnight to reach a high of $1239.00
EVN is our preferred ASX100 stock to gain exposure to an ongoing move higher in gold prices.
Our medium-term target is $3.65.
Evolution Mining
In Monday’s Opportunities in Review webinar, we highlighted MPL as a high conviction buy strategy. Our entry level was $2.75.
The price action this week suggests offshore fund managers have been aggressively buying Medibank.
With a defensive 4.3% yield, the stock is attractive at current levels.
Medibank Private
Level 29 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453
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