Virgin Money – Growth in 2021

Virgin Money Uk has been on our radar following the merger and rebranding that took place last year.

Virgin Money is investing heavily in technology and executing well on the merger of the old Clydesdale Bank with the Virgin Money business. Analysts are forecasting 10%+ in profit growth for 2021 and the current 8x PE is un-demanding.

The dividend yield is 3% based on 2020 earnings and likely to increase into 2021.

We see price support at $3.20

Treasury Wines – 40% Sell Off

On 9th December last year we warned…

TWE is under Algo Engine sell conditions and we highlight the recent softness in US sales data as a concern. Downside target $15.50 – $16.50

Since then the stock price has plunged to $12.30 and we now expect further weakness before consolidating within the $11 – $12 price range.

ASX Market Valuation Review

Growth expectations for the FY20 ASX200 earnings have eroded from around 6% to only 2%.

Ex-resources, the PE valuation for the ASX200 now stands at 19.5x versus the 10-year average of 14.5%. 

Low bond yields and modest levels of global growth continue to support defensive names. Capital management remains an important factor in underpinning stocks, as share buybacks help to drive average EPS growth.

Our current ASX top 20 holdings include:-