S32 – Remains Under Sell Conditions

South32 has been under Algo Engine sell conditions since forming a lower high pattern back in February at $4.00.

Weak alumina and coal prices saw 3Q19 earnings miss analysts forecasts. We now downgrade the earnings outlook by 15% and remain cautious on the prospects of a near term turnaround.

Ongoing declines in spot alumina and thermal cost prices, combined with rising costs, will translate to weaker earnings over the next  2 -3 years.



Lendlease – Long-Term Value

Lendlease looks attractive from a long-term valuation basis, especially relative to other opportunities within the real estate sector.

Although the share price may remain weak until a solution for Engineering &
Services is achieved, we feel the negatives are already priced in.

Based on FY20 earnings, we have the stock trading on a forward yield of 5%.


Evolution Minning – Approaching Support

Evolution Mining is under Algo Engine buy conditions and is currently forming a higher low near the $3.00 price range.

The company recently delivered a softer than expected result with lower production and higher operating costs.  These events combined with a softer gold price has seen the share price retrace from $4.00 to $3.20.

We anticipate a pickup in the next quarter which should see overall FY19 production in the upper band of the groups guidance range.

A new round of  “risk off” sentiment by equity investors will also be supportive of gold prices.

Add this one to your watchlist and look for an entry point between $3.00 & $3.20.

The below long term graph of the gold price shows the recent retest of the US$1325 range.