Raytheon – High Conviction Buy

Posted on | by Leon Hinde

Raytheon, (listed on the New York Stock Exchange) is now under Algo Engine buy conditions and was added into our US S&P100 model portfolio, prior to last week’s earnings result.

Raytheon is a major U.S. defense contractor and industrial corporation with core manufacturing concentrations in weapons, military and commercial electronics. In 2020 the company will merge with United Technologies and we anticipate the merger will help unlock value for shareholders and underpin the growth story for many years to come.

The stock trades 19x earnings and a 2 % dividend yield. A combination of the upcoming merger and the large scale of future share buybacks has Raytheon on our “high conviction” buy list.

Ramsay Healthcare – Valuation Review

Posted on | by Leon Hinde

Ramsay Health Care is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

RHC trades on 21x forward earnings, dividend yield of 2.4% and underlying EPS growth into FY20 of 2 – 4 %.  Forecast FY20 revenue $13bn, EBIT $1.2bn, EPS $3.00 & DPS $1.55.

In a low rate environment, we see the new trading range for Ramsay within the $65 – $70 band.

We see buying support building at the $64 price level.

 

Global Banks ETF

Posted on | by Leon Hinde

Betashares Global Banks is under Algo Engine buy conditions and is a current holding in our ETF model portfolio.

We recently added to the position at $5.85 and the ETF is now trading at $6.25.

Global sector rotation is occurring and money is switching from momentum to value. This could be a repositioning ahead of this week’s ECB meeting and next month’s anticipated Fed Reserve rate cut.

The yield on the global bank ETF is  1.3%.  We don’t consider this a core holding and will, therefore, look to take profit on the trade.

 

CIMIC – Value to Emerge

Posted on | by Leon Hinde

Cimic Group is under Algo Engine sell conditions and following the recent 1H19 earnings, the stock has sold off over 20%.

Mining profits were up +26% but construction-related profit was down 15%. The broad thematic around the CIMIC business remains attractive and we continue to monitor for an approaching entry point.

Note: Short-term indicators are now turning positive.

 

Boral – Deep Sell Off

Posted on | by Leon Hinde

Boral has been under Algo Engine sell conditions since forming a lower high at $5.75 back in July.

The share price is now down 30% from the July high and much of this selling occurred yesterday following the FY19 earnings result. Underlying NPAT was down 7%, at $440m & EBITDA was down 2%, at $1,037m.

A pick up in US housing and local infrastructure spending should help to underpin Boral’s earnings. The stock trades on 10x earnings and a forward yield of 5%.

 

 

 

 

Tassal Group – Buy Signal  

Posted on | by Leon Hinde

Tassal Group is now under Algo Engine buy conditions following the higher low formation at $4.30.

Tassal Group is not a core holding and is viewed as a shorter-term trading opportunity. We’re looking for the momentum indicators to turn higher and buying support to build within the range displayed on the chart below.

Accumulate within the $4.00 to $4.30 level.