CIMIC – Trade Update

Posted on | by Leon Hinde

CIM:ASX is likely to see improved earnings in FY22 and we expect to soon see a recovery in the share price.

CIMIC is a high risk counter trend investment with the prospect of a multi-year recovery, once earnings hit an inflection point.

24/4 CIMIC breaks above the 10-day average after forming a new trend low mid-week at $16.86.

10/5 Dec 21 $20 call options are now trading at $1.10.

14/5 CIMIC is now trading $19.84 and the Dec $20 calls have jumped from $1.10 to $1.50.

17/5 CIMIC is now trading $20.56 and the Dec $20 calls have jumped from $1.10 to $1.75.


China ETF – IZZ

Posted on | by Leon Hinde

ASX:IZZ is under Algo Engine buy conditions. We expect buying interest to increase within the $55 – $60 price range.

Traders may wait for the third factor to align, an upturn in the momentum indicators. Watch for the stochastic to move higher or the price action on the main chart to cross above the 10-day average.

Cure ETF – Buy

Posted on | by Leon Hinde

CURE:AXW is under Algo Engine buy conditions and the current pullback provides another buying opportunity.

17/5 CURE is now experiencing an increase in buying interest and the stochastic short-term momentum indicator has turned higher.

ETFS S&P Biotech ETF (ASX Code: CURE) offers investors exposure to U.S. biotechnology companies. These companies are engaged in research, development, manufacturing and/or marketing of products based on genetic analysis and genetic engineering.

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Carsales – Update

Posted on | by Leon Hinde

Carsales.Com is under Algo Engine sell conditions and is not currently in our portfolio.

We highlight the recent announcement where Carsales will acquire a 49% stake in a US marketplace business for A$797m. The acquisition is mainly funded with a A$600m equity raising.

We expect 5 – 10% revenue growth and EBIT increasing from $230m to $270m in FY22. This supports a forward dividend yield of 2.6%.

Xero – FY21 Earnings

Posted on | by Leon Hinde

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

The high EBITDA margins reported in the 1H appear to be a one-off due to lower constrained operating costs during COVID. The sell-off in XRO share price following the FY21 result is reflective of the market recalibrating the growth rate.

A normalization of operating margins will likely be more in the 16 – 18% range rather than the near 30% reported in the first half results.

We continue to see solid revenue growth and are comfortable buying XRO on or near our support range.

Altium – Buy

Posted on | by Leon Hinde

Altium is under Algo Engine buy conditions. The share price is oversold and likely to rally from the current level.

A more conservative entry strategy will be to wait for the stochastic to turn higher or the price action to cross up through the 10-day average.

Cure ETF – Buy

Posted on | by Leon Hinde

CURE:AXW is under Algo Engine buy conditions and the current pullback provides another buying opportunity.

ETFS S&P Biotech ETF (ASX Code: CURE) offers investors exposure to U.S. biotechnology companies. These companies are engaged in research, development, manufacturing and/or marketing of products based on genetic analysis and genetic engineering.

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