CBA – Reports 12 Aug

Posted on | by Leon Hinde

Commonwealth Bank of remains under Algo Engine sell conditions and we see resistance building near the $74 price level.

CBA reports FY20 earnings on 12 August, at which time the market will focus on CBA’s dividend and any capital management commentary. Consensus expectations are for earnings to be $7.8bn, (down 10% on 2019 numbers), and the 2H20 dividend to be cut by 50%.

We remain on the short side of the CBA trade.

TPG – Buy

Posted on | by Leon Hinde

TPG Telecom has traded down to $7.50 following a research report published by a leading investment bank this week, which highlighted a series of risks facing the business.

Despite the report, we see value in TPG and expect the stock to trade higher from the current level.

Since making the above post on 23 July, TPG has rallied to $8.20 and closed near $8.00 on Friday. We continue to see value in TPG and suggest investors watch for another entry opportunity below $8.00.

Apple – June Earnings

Posted on | by Leon Hinde

Apple July 30, 2020 — Apple announced financial results for its fiscal 2020 third quarter ended June 27, 2020. The Company posted quarterly revenue of $59.7 billion, an increase of 11 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.58, up 18 percent.

Apple has been under Algo Engine buy conditions since forming a low in March 2020.

The board of directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.

Apple declared a cash dividend of $0.82 per share of the Company’s common stock. This places Apple on a forward annualized yield of 0.75%.

CIMIC – 1H20 Earnings

Posted on | by Leon Hinde

Cimic Group delivered a soft 1H20 result that was below consensus expectations. 1H20 NPAT of A$317mn, down 14% on the same time last year.

Work-in-hand increased to A$38bn and the project pipeline for 2020 and beyond has now increased by 10% to $540bn plus.

CIMIC also announced an agreement with Elliott Advisors (UK) for the sale via a JV for 50% of Thiess, the world’s largest mining services provider. Providing joint control of Thiess to CIMIC and Elliott.

The transaction will help strengthen the CIMIC balance sheet and provide flexibility for CIMIC to resume a share buyback next year.

We see value at $21 – $22 per share.