Amcor & Transurban – AGM May Shift The Share Price

Posted on | by Leon Hinde

Both AMC and TCL have been under recent selling pressure as bond yields in the US have moved higher.

The defensive nature of both businesses has seen their share price trade as a proxy to bonds.

With TCL and AMC both scheduled to have their AGM tomorrow, we believe there could be a rally in the share price as investors gain more clarity on future earnings growth.

We’re mindful that Algo Engine sell signals are displayed, however we’re willing to commit to Amcor as our preferred opportunity, of the two names.

Amcor

 

 

Australian Banks – Sell Signals Remain Dominant

Posted on | by Leon Hinde

Our Algo Engine triggered sell signals across the domestic banking names back in June.

Since then, on average, the group has sold off approximately 15% and on a 2-year basis, the sector is now down more than 30%.

ANZ announced this week, that its 2H18 cash earnings will be adversely impacted by $711m of after-tax charges related to legal costs and customer remediation from the Royal Commission.

ANZ releases their full-year NPAT on October 31st.

A second sector risk yet to play-out, is the potential for deteriorating credit quality. This risk has been exacerbated over recent years by “add backs”, where short term earnings are improved through lowering the provisions for bad loans.

Looking ahead, CBA chief Matt Comyn will face the royal commission on Thursday morning, followed by WBC’s Brian Hartzer Thursday afternoon and ANZ’s Shayne Elliott on Friday.

 

SCG & SYD – Approaching Oversold Levels

Posted on | by Leon Hinde

During the recent run-up in US interest rates, yield sensitive names have faced heavy selling pressure over the last 8 weeks.

However, as a “risk off” wave now appears to be hitting equity markets, it’s likely bond yields will consolidate, and in the process provide some selling reprieve for the yield sensitive names.

SCG and SYD are two examples where we now feel the prices reflect good value.

Sydney Airport

Scentre Group

Flight Centre & Webjet

Posted on | by Leon Hinde

Our Algo Engine has generated buy signals in both Webjet and Flight Centre over recent days. We continue to like the supportive earnings backdrop for  WEB & FLT and therefore, we’re adding these names to our watch list.

The charts below show the slightly discounted entry levels we’re looking for.

Join our “Opportunities in Review” webinar on Monday to learn more about our high conviction ideas.

 

ALGO Buy Signal For CYB

Posted on | by Leon Hinde

Our ALGO engine triggered a buy signal for CYB into yesterday’s ASX close at $5.69.

This “higher low” pattern is referenced to the intra-day low of $5.20 posted on June 4th.

CYB at $5.50 – $5.60 appears to be a good buying opportunity. We expect earnings upgrades next year following integration with Virgin Money.

CYB

Qantas – 1Q19 Trading Update

Posted on | by Leon Hinde

Qantas will provide its 1Q19 trading update on 25 October 2018.

QAN was added to our ASX Top 50 model portfolio in July of 2017 at $5.25.

Due to the recent spike in oil prices, the share price has been drifting lower and nearing our original entry level.

Along those lines, we expect the trading update to include how the company’s dynamic hedging program is insulating their bottom line from higher fuel prices.

We see good value at current levels for a move back into the $7.90 area over the medium-term.