BOQ – Algo Sell Signal

Posted on | by Leon Hinde

Bank of Queensland announced 1H19 cash earnings of $167m which is below the downgraded guidance the company provided in February and 8% below the same time last year.

The result continues to highlight the struggles the regional banks have in the current environment.

An interim dividend of $0.34 was declared, which is a reduction from 2018 levels.

The chart below shows the Algo Engine sell signals in BOQ, starting in early 2018 at $13.00. BOQ now trades sub $9.00 and is likely to continue lower.

 

XJO vs NASDAQ

Posted on | by Leon Hinde

The XJO index has been running into selling resistance as the resource rally tires  and the banks fail to attract buying interest. The index has today moved below the short term 10 day moving average.

In contrast, the NASDAQ remains the leading beacon of global equities as money continues to chase large cap tech and healthcare.  The chart below of the NASDAQ index shows the buying  strength with the short -term price action well above the 10 day average.

We continue to reference the NASDAQ as our preferred benchmark for investor confidence and will wait for a break below the 10 day average before hedging portfolios.

 

 

Crown Resorts – What’s Next?

Posted on | by Leon Hinde

Crown Resorts today acknowledged Wynn Resorts is disengaging with respect to the announced takeover proposal.

We sold at $14.00+ yesterday, following the 20% rally on the open. The stock has retraced 10% and today is trading at $12.80. We again see value in Crown at or near this level.

A cautious approach is to sell covered call options and run the position as an income contributor to portfolios, (10% cash flow), or the more aggressive play will be to hold the stock for the potential of a concrete takeover offer from Wynn or another rival.

Assuming 5% EPS growth into FY20, we now have the stock on a 4.3% forward yield.

 

Crown Resorts – Takeover Offer

Posted on | by Leon Hinde

Crown Resorts have announced a pause in trading of its shares amid media reports of a takeover bid. It is suggested the company has attracted the interest of Wynn Resorts.

Whilst Crown has been our preferred exposure, Star Entertainment will also benefit from the improved sector sentiment.

NOTE: At 10.30am today, CWN  confirmed the takeover offer at $14.75 per share 50% cash and 50% Wynn shares.

 

 

Woodside – Buy Signal

Posted on | by Leon Hinde

{ASX:WPL) is under an Algo Engine buy signal and we consider the stock a suitable buy-write.

Buying the stock and selling a long dated covered call will deliver 10% cash flow on an annualised basis and provide for a moderate level of capital growth.

 

 

Graincorp – Algo Buy Signal

Posted on | by Leon Hinde

Graincorp is now under Algo Engine buy conditions and buying support has developed around $9.00.

The story gets slightly more complicated for investors, following Graincorp  announcing they intend to demerge the global malting business into a separate ASX listing.  This is likely to occur in the second half of 2019.

This will then leave the integrated grains & oils business as a separate ASX listed company.

We believe the standalone malt company will be an attractive investment.

 

NASDAQ – Watch For Sell Activity

Posted on | by Leon Hinde

The NASDAQ Index is now under Algo Engine sell conditions, US March quarter earnings kick off next week and the impact of the blackout period, (meaning company share buy-backs are suspended), needs to be considered in conjunction with the potential for weaker earnings.

Our trigger remains a break in the 10 day moving average, which is currently 1 to 2% lower than the last close price.