Our Algo Engine generated a buy signal in BHP and we highlight in the chart below our preferred accumulation price range.
Escalating trade tariffs and concerns regarding a China slowdown are the obvious reasons for short-term price weakness in BHP’s share price.
We expect to see some sort of resolution in the trade disputes by the New Year, although pressure will likely remain ahead of the US mid-term elections in November.
BHP
Shares of Healthscope tested the $2.10 support level last week.
With the company on track to increase earnings in FY19 & FY20, we see the sell-off as an opportunity to buy the stock before it pushes back through the recent $2.28 high.
Healthscope
Our Algo Engine generated a buy signal in MPL on Friday.
With the share price retracing from a $3.39 high, (formed in February), to close at $2.89, we now draw your attention to MPL as it enters our value range.
MPL’s earnings report last month showed the company is struggling to grow revenue and bottom line profit, therefore 2019 will likely show flat to no growth.
However, with the stock on a 4.4% yield and adding a covered call option, 10 – 12% annualized cash flow can be generated without too much downside risk.
Look to accumulate within the $2.80 – $2.90 range.
The XJO has now sold off 4% in the last 7 days and the index is back at the same level it was in June.
BBOZ is an inverse ETF with a 2x leverage, therefore, in approximate numbers, BBOZ has increased 8% over the same period.
BBOZ allows investors to hedge a portfolio of ASX 200 stocks in one ASX listed transaction.
BBOZ
CIMIC was a stand out during the recent earnings season with growth coming in well above market consensus, supported by large infrastructure spending.
We expect 2 – 3 years of above trend growth in CIMIC and see the current weakness as an opportunity to accumulate the stock.
Our buy range is $48.50 to $47.50.
Also keep an eye on any weakness in the share price of Downer EDI, as a buy on the dip opportunity.
CIMIC
We recommend investors begin accumulating Origin Energy at current levels.
The company will reinstate their dividend in February and the current sell-off will likely prove to be a substantial low.
Origin
We recommend accumulating Ansell within the 24.25 – $24.75 range.
The share price has reached oversold territory relative to the healthy rise in NPAT announced in its FY18 results.
Ansell
Should Crown retrace back to $13.50 – $13.75, we consider the entry range as good medium term value.
Crown next goes ex-div on 20th March 2019, so adding a covered call into December will help drive additional cash flow, whilst waiting for the next round of dividends.
Crown
We recommend buying Woolworths and selling a March $29.01 European-style call option to enhance the yield.
Unlike American-style options, European-style options can only be exercised on the expiration date.
As such, the share price can trade through the strike price during the course of the option duration without being exercised.
The strategy delivers effectively 3 payments, September & March dividend, plus another $0.55 per share in option income.
Woolworths
We recommend buying Sydney Airports at current levels and selling a March $7.50 call option to enhance yield.
SYD goes ex-div $0.18 on the 28th December
Sydney Airports
Level 17 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453