The Dow Jones chart below shows we’re in an extended counter move and are likely within 200 points of reaching initial resistance.
Medibank is now under Algo Engine sell conditions.
MPL reported 1H19 earnings today and for the most part the results are ahead of consensus. Although, NPAT is flat on the same time last year at $232m
Dividend for the half is at 5.7 cents based on a 70% payout ratio. MPL is a stable low growth business that offers 4.5% forward dividend yield.
We sell value back at $2.50 – $2.60 range.
Newcrest is under Algo Engine sell conditions. Our preference is for Northern Star and OceanaGold.
NCM 1H FY19 NPAT beat consensus, with profit coming in at US$237m. EBITDA of US$739m also beat consensus, supported by lower operational costs.
NCM declared a US 7.5cps fully franked dividend, which flat on the same time last year.
We consider NCM expensive relative to peers.
Telstra’s 1H19 earnings were in line with consensus and mobile did better-than-expected. The ongoing progress on cost-out initiatives will be supportive for stable future dividends.
Assuming 16 cents as the base dividend, Telstra needs to deliver around $7.5bn in EBITDA. We view this as achievable and place TLS on a 5.9% forward yield.
TWE 1H19 earnings met market consensus at $339m.
Earnings from American markets exceeded expectations, whilst Asia was slightly below the elevated guidance.
Overall the result looks okay with continued EPS growth in the 20 – 25% range.
Based on EPS growth into 2020, we have TWE on a 2.8% forward yield.
Tabcorp Holdings, (TAH), 1H19 result showed EBITDA at $360m and 1H NPAT at $132m. These numbers were slightly below consensus. There appears a willingness to reinvesting Lotteries’ based income, into the Wagering business to defend and grow market share.
Cost synergy savings from the Tatts merger was raised to $130-145m, which should help to underpin the stock.
Tabcorp now trades on a forward yield of 5% and we expect EPS growth to track in the 5 – 6% range. We note the recent Algo Engine sell signal going into yesterday’s earnings release.
CWY was on our high conviction list and the stock has jumped over 10% today following the 1H19 earnings announcement.
The result was ahead of market consensus with underlying net profit after tax of $67m. Revenue growth was up 9% on the same time last year.
The company lifted net profit after tax by 35% for the first half FY19 on the back of organic growth and the acquisition of rival Tox Free.
Based on FY19 earnings we have CWY trading on a 1.8% dividend yield.
Incitec Pivot, (IPL) is under Algo Engine buy conditions and despite the earnings impact from the North Queensland floods, we see value for patient investors.
Heavy rainfall in North Queensland has resulted in the shutdown of Incitec Pivot’s Phosphate Hill plant, (closure of the rail line between Townsville and Phosphate Hill).
In
Bendigo reported earnings slightly below market consensus.
1H19 cash profit came in at $220m, however, we continue to see challenging conditions for the regional banks.
BEN and BOQ both display lower high formations and are under Algo Engine sell signals.
Downer EDI recently moved into Algo Engine sell conditions after forming a new lower high at $7.50.
Downer reported 1H FY19 revenue of $6.6bn, EBITDA of $413mn and underlying NPATA of A$146mn, up 11% on the same time last year. Full year FY19 earnings are likely to be around $330mn.
We will take another look at the buy-side of Downer on a pullback below $6.80.
Level 17 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453