NST:ASX is under Algo Engine buy conditions and remains our preferred gold exposure.
A general review of the sector shows cost remains a concern for local gold miners with most companies reporting a lift in operating costs driven primarily by labour. A concern for the sector is the shortage of technical staff.
The average all in sustaining cost (AISC) per ounce for most local producers is A$1,525/oz.
Mineral Resources is under Algo Engine buy conditions and is in our ASX 100 model portfolio.
The share price has fallen 20% from the July high, as the iron ore price rolled over from $220/t to $130/t.
The strong lithium market (particularly spodumene with spot at US$1,250/t) offsets some of the weakness in iron ore and the growth outlook for MIN remains attractive.
The likely approval of Ashburton in the coming months is a key positive for the stock. Key decisions around Ashburton development hub and Wodgina restart are likely at the group AGM scheduled for 18th Nov.
Accumulate within the $42 – $52 price range.
Aurizon Holdings is under Algo Engine buy signals.
Aurizon reported underlying earnings before interest taxation depreciation and amortisation (EBITDA) of $1.48 billion and told investors to expect underlying EBITDA of between $1.42 billion-$1.5 billion in fiscal 2022.
Cleanaway Waste Management is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
Cleanaway financial results for the year ended 30 June 2021
Statutory Net Profit After Tax (NPAT) increased 31.2% from $112.6 million to $147.7 million.
On an Underlying basis compared to the year ended 30 June 2020 (“FY20”) Cleanaway reported:
• NPAT increased 2.1% from $150.0 million to $153.2 million
• EBITDA increased 3.8% from $515.7 million to $535.1 million
• Net revenue increased 4.7% from $2.1 billion to $2.2 billion
• Operating cash flow increased 5.7% from $401.5 million to $424.4 million
• Final dividend increased 11.9% from 2.10 cents per share (cps) to 2.35 cps, taking the total dividend for the year 12.2% higher to 4.60 cps
Update 8/9
Link Administration Holdings reported FY21 profit of $112m. FY22 guidance is now low single-digit revenue growth and flat EBIT.
The downside in the share price is underpinned to a certain degree through the announced buyback of $150m.
The forward dividend yield is 2.7%.
{PXA} Accumulate
ANN:ASX is under Algo Engine sell conditions, however, we’re expecting a switch to buy conditions in the near term.
FY21 results were at the low end of guidance, with EPS US$1.92 on record sales of US$2bn.
FY22 is likely to be 5 – 10% below FY21 and the downgrade is driving the current share price correction. Be patient with this opportunity and wait for the Algo Engine to trigger a buy.
The 3% yield is well supported and buying interest will rebuild as the valuation becomes more attractive.
Cochlear is now under Algo Engine buy conditions and has been added to our ASX 100 model portfolio.
We expect 10% EPS growth over the next 12 months. Although, the stock remains expensive at 40x earnings and trading on a 1.8% yield.
Since writing the above post in Dec last year, COH has rallied from $175 to a high of $257. The subsequent pullback which bottomed on Monday this week has seen buying interest rebuild at the higher low of $222.
This is the second cluster of Algo Engine buy signals and we’ve taken the opportunity to add to our original allocation.
iShares Asia 50 is under Algo Engine buy conditions and is a current holding in our iShares ETF model.
INVESTMENT OBJECTIVE: The fund aims to provide investors with the performance of the S&P Asia 50TM Index, before fees and expenses. The index is designed to measure the performance of the 50 leading companies listed in China, Hong Kong, Macau, Singapore, South Korea and Taiwan.
Wesfarmers is under Algo Engine buy conditions.
FY21 result was slightly above expectations with underlying EBIT up 21% to $3.55bn.
WES has proposed a A$2.3bn (A$2.00 per share) capital return that is expected to be paid in December (subject to shareholder approval).
WES advised that its retail divisions have been affected by recent lockdowns with trading restrictions and several store closures.
WES trades on a forward yield of 2.5%.
Accumulate WES within the $50 – $57 range.
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