After testing a 12-month low at $11.90 in early trade, shares of Crown provide an opportunistic entry level for both investors and traders. The share price has been washing out following last week’s average earnings result.
With the share price sliding over 20% lower since mid-August, we believe we’re now looking at an inflection point with new buying demand ready to build.
Over the last three years, ALL & TWE have been among the best performing stocks within the ASX100 model portfolio.
Both names now reflect a “higher low” chart formation and Algo Engine buy signals.
TWE’s 20% sell-off post FY18 results provides an attractive entry point. FY19 EPS growth is still likely to be in the range of 15 – 20%.
Flight Center is under ALGO Engine buy signal and with the share price retracing from $70 back down to $45.50, we now believe buying demand will increase.
Flight Centre
Shares of Amcor are poised to rally as the Bemis takeover deal is finalised.
Hedge funds who are short Amcor & long Bemis will begin unwinding the trade, which will add to the AMC buy-side demand.
We recommend accumulating Amcor at current levels.
In the local entertainment sector, Crown faced heavy selling last week following soft earnings numbers. With the stock now trading at $12.00, we believe value is now being presented.
Crown
We recommend buying BXB at $10.50 or better.
Investors can then look to sell the $11.01 Euro covered call option into March 2019, whilst staying exposed to the 14.5 cent March dividend.
Brambles
Our Algo Engine generated a buy signal in Wesfarmers following the price retracement from $51 back down to $46.
This “higher low” pattern is referenced to the intraday low of $43.70 posted on May 10th.
WES has been on our watch list with a target entry range of $45 – $46.
We now recommend accumulating the stock, with a view towards selling covered call options to enhance yield.
Wesfarmers
Downer EDI re-affirmed 13% EPS earnings growth, which looks attractive against an average market growth rate of 5 – 7 %.
Macro conditions remain positive in DOW’s key markets across education, health, mining road & rail transport.
Based on FY20 EPS growth we now have DOW on a forward yield of 4.4%.
Internal momentum indicators are pointing higher and we see scope for an upside move into the $7.80/90 range.
Downer EDI
Crown’s trading update was weaker than expected as main gaming floor revenue was down 0.6%.
Non-gaming revenue growth was 3.5%, while VIP turnover growth was up 13%.
Star Entertainment showed domestic revenue growth of +6.7% but VIP growth disappointed with it coming in flat on the prior period.
Crown looks like good “value” at $12 and is supported by a current ALGO Engine buy signal.
Aristocrat (ALL:ASX) is also looking well supported near the $26 range.
With the USD starting November with a weaker tone, gold rallied almost 1.5% overnight to reach a high of $1239.00
EVN is our preferred ASX100 stock to gain exposure to an ongoing move higher in gold prices.
Our medium-term target is $3.65.
Evolution Mining
In Monday’s Opportunities in Review webinar, we highlighted MPL as a high conviction buy strategy. Our entry level was $2.75.
The price action this week suggests offshore fund managers have been aggressively buying Medibank.
With a defensive 4.3% yield, the stock is attractive at current levels.
Medibank Private
Level 17 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453