Woodside Is Nearing The Buy Zone

Posted on | by Todd

Our ALGO engine triggered a buy signal for WPL into yesterday’s ASX close at $34.30.

This “higher low” structure is referenced to the intraday low of $31.90 posted on June 5th.

The crude oil market has been extremely volatile over the last few weeks as prices rallied when Saudi Arabia threatened to cut production, only to fall sharply after the Kingdom back flipped and pledged to increase production to 10.7 million barrels per day.

We aren’t bullish crude oil, but now that WPL shares have dropped over 15% in two weeks, we see scope for near-term consolidation.

We will update WPL in a future post with more specific entry levels.

Woodside Petroleum

 

Stay Long Tabcorp Into Investor Day

Posted on | by Todd

Shares of Tabcorp are noticeably quiet in front of their Investor Day event tomorrow.

With the share price contained in a 10 cent range for the last week, it’s reasonable to expect investors to react to any forward guidance announcements tomorrow.

TAH shares are up over 6% since posting an intraday low of $4.52 on October 12th.

Our bullish case for the stock is based on continued cost savings from the merged entity and steady growth in the digital gaming sector.

TAH is part of our ASX Top 100 portfolio. We prefer the long side from these levels and look for a near-term upside target of $5.35.

Tabcorp

 

 

HSO Spikes Higher On BGH Takeover Bid

Posted on | by Todd

Shares of HSO are up over 20% in early trade as the company received an unsolicited takeover offer from a group led by BGH Capital.

This is the second takeover bid proposed by BGH, whose first acquisition attempt was rejected by HSO’s board in May.

The details of the new offer are not clear, but it’s suggested to be in the $2.35 per share area.

Interestingly, the GBH consortium includes AustralianSuper, one of HSO’s largest shareholders.

Our ALGO engine triggered a buy signal for HSO at $2.10 on August 16th and we have suggested scaling in to long positions at lower levels.Healthscope.

Newcrest Firms In Front Of Tomorrow’s Sales Data

Posted on | by Todd

Since posting an intraday low of $18.60 on September 6th, shares of NCM have risen over 10% and reached a 2-month high of $20.75 in early trade today.

A combination of firm Gold prices and investors’ interest in holding shares in hard assets has been bullish for the stock.

NCM will release its quarterly sales and revenue numbers tomorrow.

Recall that NCM shares rallied to $21.95 after the release of their Q4 production numbers showed a 15% increase in production to just under 635,000 ounces.

NCM was added to our ASX Top 50 portfolio in July at $20.05.

We suggest adding to long positions in NCM with an initial target of $21.50 followed by $22.40 over the medium-term.

Newcrest Mining

 

 

 

Stay On The Buy Side Of Treasury Wine

Posted on | by Todd

TWE held their AGM last Thursday which was co-located in Hong Kong and Melbourne.

Chief executive ­Michael Clarke said earnings for 2019 would be bolstered by its new distribution model in the US, which was gaining traction with industry players, and its ability to deliver more luxury wine to its consumers.

He also reiterated his guidance for 25% EBITS growth in 2019 and noted that 1Q results were in line with internal plans for every revenue location.

In August, TWE reported a 34% jump in full-year net profit to $360 million as revenue fell by 1.5 per cent to about $2.5 billion.

Despite this upbeat news, TWE share price has been unable to hold above $17.00.

We consider this more a transitory function of the overall re-balancing of the ASX 200 Index, than a specific valuation issue with TWE.

As such, we suggest accumulating shares at current levels with an initial upside target of $19.40 and then $21.60.  Treasury Wine Estates

 

ALGO Update: Go Long Sonic Healthcare

Posted on | by Todd

Our ALGO engine triggered a buy signal for SHL last Friday at $23.70.

This “higher low”pattern is referenced to the intraday low of $22.50 posted on April 4th.

We like the diversified structure of SHL in which no single operation accounts for more than 25% of the company’s overall revenue.

In addition, SHL generates a large percentage of their earnings in both the USA and Europe which will increase, on a net basis, as the AUD trades lower.

We consider SHL a good buy/write strategy as the share price approached the $25.00 level.

Sonic Healthcare

 

Aristocrat Continues To Firm On Higher Earnings Estimates

Posted on | by Todd

Since testing a key support level at $27.00 last Friday, shares of ALL have rallied over 10% to hit a 1-month high of $29.60 in early trade today.

The stock has been supported by suggestions that next month’s full-year profit announcement  is likely to surprise to the upside by as much as 20% in the group’s social gambling business.

At $29.40, ALL is at about 19X estimated FY 2019 earnings. In addition, given ALL’s exposure in the USA, a further fall in the AUD/USD will act as a tailwind going into next year.

ALL is part of our ASX Top 50 Model portfolio and we have an upside target of $40.50 over the medium-term.

Aristocrat

 

Crown Is Building For The Future

Posted on | by Todd

Shares of Crown Resorts have found solid support in the $12.80 to $13.00 area over the last several trading sessions.

With consistent casino and non-casino earnings from their Perth and Melbourne properties, investors are warming up to the potential benefits from CWN’s $2.2 billion project in Sydney; even if it’s 18 months from completion.

At current levels, the stock is trading at 21X FY 2019 earnings for a partially franked yield of 4.5%.

Crown is included in our ASX Top 100 Model Portfolio.

Our near-term price target is just over $14.20, with a longer-term view to $15.75

Crown Resorts

 

 

 

ALGO Buy Signal For CYB

Posted on | by Todd

Our ALGO engine maintains a buy signal in CYB near the $5.20 support area.

This “higher low” pattern is referenced to the intraday low of $5.00 posted on June 1st.

On a percentage basis, the 15.5% drop in CYB  is almost twice as much as the other ASX banking stocks over the last month.

Considering that CYB has most of its mortgage exposure in the UK, has an net interest margin of 220 basis points and is not being targeted by the Royal commission, we believe the stock is oversold.

At $5.20, CYB is trading at 12X FY 2019 earnings. Technical readings suggest a bounce back into the $5.70 area before more significant price resistance at $6.25.

CYB Bank

 

 

 

Add To Tabcorp At Current Levels

Posted on | by Todd

Shares of TAH have slipped about 6% lower over the last 10 trading sessions.

With their AGM scheduled for tomorrow, we believe is worthwhile to recap some of the company’s performance numbers released in August; this was the first report to reflect the TAH/Tatts merger.

The highlights of the report were: EBITDA up 69%, Revenues rose 71%, net profit of $28 million and EPS growth of 1.9 cents a share versus a 2.5 cent loss last year.

We believe the AGM will be a platform for TAH to announce further synergy savings from the merged entity, new product ideas and increasing revenue in the digital gaming sector.

TAH was added to our ASX Top 100 portfolio in February and our ALGO engine triggered a buy signal in early April at $4.22.

We see good value in TAH at current levels with a medium-term target of $5.40.

Tabcorp