Leon Hinde

US stocks have slipped, continuing their declines from a day earlier, as a batch of disappointing earnings reports added to the gloom.

With the S&P500 closing at 2467 it is now within 100 points of completing a 20% sell-off from the 2018 highs. 2350 = 20% correction  and 2100 =  30% correction.

If we consider the 50% range of the 2009 low to the 2018 high for the S&P500, it would pencil out to 1820  points. This would be a very significant level of support.

Oil Search is a current holding in the ASX 100 model portfolio.

With the oil price retracing into our targeted consolidation range, we’re now accumulating both Oil Search and Woodside shares.

OSH – Buy $6.25 – $6.75

WPL – Buy $29 – $30.50

BHP delivered 44.67% return over 659 days including dividends.

Below is a copy of our Model Portfolio email instructions showing BHP being closed from our ASX 100 model portfolio following yesterday’s Algo Engine sell signal.

To sign up for the portfolio adjustment instructions, please visit

https://blog.investorsignals.com/

Or call 1300 614 002

Unibail-Rodamco-Westfield is the premier global developer and operator of flagship shopping destinations, with a portfolio valued at €63.7 Bn, (as at 30 June 18).

86% of the portfolio is in retail, 8% in offices, 5% in convention & exhibition
venues and 1% in services.

Currently, the Group owns and operates 97 shopping centres, including 56 flagships in the most dynamic cities in Europe and the United States. Its’ centres welcome 1.2 billion visits per year. Present on 2 continents and in 13 countries.

The Group has the largest development pipeline in the industry, worth €12.5 Bn.

Unibail-Rodamco-Westfield stapled shares are listed on Euronext Amsterdam and Euronext Paris (Euronext ticker: URW), with a secondary listing in Australia through Chess Depositary Interests.

The Group benefits from an A rating from Standard & Poor’s and from an A2 rating from Moody’s.

After selling Unibail at $14.50 per share, immediately following the takeover in June, we now have this name back on our radar.

NOTE: Further to an agreement entered into in October 2018, Unibail-Rodamco-Westfield announces the completion of the disposal of the Tour Ariane office building, located in the heart of La Défense business
district, (Paris region), to Singapore’s sovereign wealth fund GIC. The Net Disposal Price of the transaction is €464.9 million.

RIO has completed US$5bn plus in asset sales and has the potential to free up a further $3bn plus, should the Grasberg sale proceed as planned.

RIO has returned significant cash to shareholders in the last 18 months. By the time the portfolio restructure is complete, the number may top US$15bn, with further asset sale proceeds returned to shareholders next year.

We remain cautious of RIO, OZL, NCM & FMG as these names are under Algo Engine sell conditions.

Our preference remains BHP, WPL and S32.

BHP has received strong demand for its US$5.2bn off market buy back.

The US$5.2bn special dividend was priced at US$1.02, which was in line with
market expectations. BHP will trade ex-dividend on 10 January.

BHP could return an additional US$2 – $3bn in cash to
shareholders during next year.

The further dividend of $0.70 will be paid on the 8th of March.

 ASX listed companies are likely to conduct more share buybacks in 2019.

Woolworths and Wesfarmers are most likely to surprise with an off-market buyback which will help to underpin the current share prices.

Woolworths – Buy @ $28 and sell covered call options

Coles Group – Buy @ $11.75 and sell covered call options.

Medibank has a technical price gap at $2.25 and investors should track MPL for a reversal in the short term indicators.

With the stock now trading at $2.31, we are within a range of $0.06 where buying interest is likely to pick up.

Dulux Group is a current holding in our ASX 100 model portfolio. With the share price now testing the $6.50 support level, (last tested in August), we expect to see buying interest build.

DLX is now trading on 16x FY19 and a 4.4% yield.

Whilst this name is not a high conviction idea, (partly due to not being able to sell covered calls), we nevertheless place it on our watch list.