Commonwealth Bank will release half year earnings on Wednesday.
The figures are likely to be overshadowed by today’s release of the final report from the Royal Commission.
Consensus estimates suggest CBA will deliver an adjusted net profit of $4.8bn, a slight decline from last year’s $4.9bn.
Our Algo Engine still has CBA under “sell conditions”.
IAG is under Algo Engine buy conditions and we see support building near $7.10.
The company will report half year earnings on the 6th of February. The market is looking for NPAT to be around $260mn.
We suggest buying IAG and selling an out of the money call option to enhance the return.
IAG goes ex-div 14 cents on the 20th of February.
At $22.50 Sonic Healthcare is looking like good value.
Whilst earnings growth is only in the 3 – 4 % range, owning it at the current price and selling out of the money call options makes sense.
SHL goes ex-dividend for 32 cents on the 6th of March.
When combined with the call option income, the strategy is generating 10% p/a cash flow.
Sonic Healthcare
Dow Jones Index is now under Algo Engine sell conditions and we’re seeing an increasing volume of sell signals across both ASX and US large capitalized stocks.
Healthscope has agreed to a $4.4bn takeover bid from Brookfield.
The formal offer on Friday would deliver Healthscopeinvestors $2.465 a share, plus the 3.5c interim dividend.
This has been one of our high conviction buy ideas expressed on the blog and in the “opportunities in review” webinars.
The post below is from the 12th of Jan. CBA has since sold-off and is now trading $5 lower at $68.
Our Algo Engine has highlighted a number of lower high sell signals in CBA over the past 2 years. The most recent signal occurred in November last year when CBA was trading at $73.
Following the last signal, CBA made a low at $67 and has now rallied back to trading at the $73 resistance level again.
We remain cautious as we now start to see the short-term indicators turn lower.
Above chart is from 12th Jan.
Above chart is from 1 Feb.
The post below is from the 6th of December. Qantas has since sold off and is now trading $5.35
Qantas is under an Algo Engine sell signal, following the lower high formation at $6.16
Chart from 6th of Dec
Crown Resorts & Star Entertainment report earnings on the 20th and 21st of February, (respectively).
Both companies’ share price have been under pressure over the past 6 months, which has been a surprise given the strength in VIP gaming revenue that was evident in the last reports.
We feel again, the market has been too negative coming into the upcoming earnings. We expect to see positive upside surprises, relative to current market expectations.
Crown is under Algo Engine buy conditions, therefore, we recommend buying the stock.
SGR is under sell conditions, however, we feel the stock is oversold and suggest buying call options. Buying call options gives you limited risk on the downside and unlimited gains on the upside.
To discuss this strategy, please call our office on 1300 614 002.
Crown
Star
In our “Opportunities in Review” webinar series, Amcor was identified as a high conviction buy with an upside target of $14.50.
The stock has rallied $1.00 from the original entry level and we continue to see a re-rating occur, which will see the stock price above $14.00.
Amcor reports half year earnings on the 11th of February. We feel the result may beat the market’s low expectations.
Amcor goes ex-div $0.265 on the 27th of February. Adding a March $14.25 call option generates a further $0.15 per share of income.
A strong result for NCM in Dec Q18, driven by out performance at
Cadia, (Cadia Valley NSW is one of Australia’s largest gold mining operations).
Cadia set a record for both quarterly and half year gold production.
Gold production guidance for FY19 is unchanged at 2.5mn ounces. This is around prior high levels of production reached a few years back.
The gold sector has been a hot spot for recent merger and acquisitions. The market is waiting to see if Newcrest makes a move.
In FY 19 revenue will increase 10% and EBIT should increase to US$965mn. The stock trades on a forward yield of 1.5%.
NCM
Gold
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Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
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