Amcor – Buy

Amcor reaffirmed their guidance for 5 – 10% EPS growth and US$160mn in cost synergies over the next 3 years from the Bemis acquisition.

Half of the forecast EPS growth is being achieved through cost savings, so the underlying business remains at low single-digit growth. The Q1 update removes medium-term downside risks and with the stock offering a 4.8% yield, we expect support to build at $14.50.


Saracen Minerals – Buy on Dip

Saracen Minerals has agreed to buy a 32% stake in the Super Pit gold mine in Kalgoorlie and is raising $796 million to fund the acquisition. New shares were being offered at $2.95 each.

The raising was split into a $369 million placement and $427 million rights issue.

Computershare – Algo Sell Signal 

Computershare is under Algo Engine sell conditions and has been forming a series of lower high patterns since topping at $20.50 in September last year.

We continue to view the market’s assessment of the future earnings growth picture, as misguided. The factors that have lead to the recovery in earnings are transitory and the 20X PE and 2.5% yield, makes CPU too rich for our liking.

Short CPU $17.00

Scentre Group – Algo Update

Scentre is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

SCG is likely to generate low levels of earnings growth, however, the weak backdrop for global bond yields and the share buyback program that Scentre Group is running, are catalysts to support our “buy” rating.