It’s time for the world’s big banks to batten down the financial hatches, suspending their dividend payments and share repurchase programs.
That, at least, is the view of the International Monetary Fund’s (IMF) Managing Director, Kristalina Georgieva.
Aristocrat Leisure has now switched to Algo Engine sell conditions and has been removed from our ASX 100 model portfolio.
Aristocrat delivered 1H20 net profit, (NPATA), of A$368mn which was down 13% on the same time last year. Growth in digital earnings was not enough to offset weak revenue in the Americas.
We’re not willing to look at shorting ALL as we see a normalization of the business conditions by 2022, we’ll revisit this name should we see a “buy on the dip” opportunity later this year.
NRW Holdings has been among the best-performing stocks over the past few sessions following a strong trading update.
NWH indicated they have a strong pipeline of new projects as an acceleration of public infrastructure spending occurs.
Based on FY21 earnings of $160mn we have the stock on a forward yield of 4.1%.
The Star Entertainment Group is under Algo Engine buy conditions.
We see price support at $2.50 but remain wary of the slow pick-up in VIP gaming revenue from international visitors.
We recommend a stop loss below $2.50.
If you missed last night’s webinar, then the replay video is available below.
Ampol is current holding in our ASX 100 model portfolio.
Caltex has had a name change to Ampol and the new ticker is “ALD”.
The move comes after U.S. oil company Chevron terminated the licensing agreement allowing Caltex Australia to use the Caltex name. Ampol was originally founded as the Australian Motorists Petrol Company in 1936 in an effort to combat unfair petrol prices, later merging with the Australian arm of Caltex in 1995.
We remain cautious on the banks and feel the trough in the share price may be two to three months out from now, at which point a good long-term buy opportunity will be in place.
Short term we continue to watch CBA track below the downsloping resistance.
James Hardie Industries is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
JHX will report FY20 earnings tomorrow and previous guidance of $350m to $355m was provided on the 5th May.
The weak demand environment ahead for new residential construction will likely weigh on earnings. The fall in the share price from $33 to $21 allows for these headwinds and a discounted valuation argument builds for both JHX and BLD.
Note: James Hardie has suspended the payment of dividends.
Monday’s webinar will begin at 7pm NSW Time. Use the registration link below to not miss out.
Rio Tinto is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
Iron Ore prices have held up well in the recent market sell-off, with spot prices remaining around USD$80 p/t.
Buy RIO at current levels.
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