Scentre Group – Buy to generate 10% cash flow

Scentre Group announced an on-market buy-back of outstanding shares, the Company intends to complete the buyback within 12 months. The buy-back will add incremental support to our suggested buy-write strategy.

We recommend buying Scentre and selling covered call options. The stock goes ex-div $0.11 on the 14th of August.

Selling a Sept out of the money call will generate an additional $0.12 per share of income.

Amcor – Take Profit

Amcor strong share price movement suggests investors are
pricing in an earnings upgrade, but we think a significant EPS upgrade
is unlikely and investors should now take profit or sell covered calls.

Stock price is up 5% from the recent signal low.

 

 

Amcor – Valuation Review

Amcor is now under Algo Engine buy conditions, following the higher low formation at $15.75.

Looking out to FY20 we have Amcor generating a combined revenue of $13.5bn, EBIT $1.65bn, delivering 8% EPS growth and trading on a 4.4% yield.

We see value at $15, however, with the defensive nature of the Amcor business, buying interest is likely to build closer to $15.50.