Algo Update – James Hardie

Posted on | by Leon Hinde

Our Algo Engine recently generated a buy signal in James Hardie Industries and the stock was added to the ASX50 model.

While the Australian housing cycle is turning, JHX continues to grow above market through a combination of plant efficiencies and new new products. 

We remain “long” JHX whilst the share price holds above the $21.50 price level.

JHX goes ex-div $0.30 on the 12th of December. Adding a November $24 call option will enhance the income by a further $0.60 per share.

James Hardie

 

Oil prices surge 5%

Posted on | by Leon Hinde

Oil prices surged as much as 5 percent on Friday as OPEC agreed a modest increase in output to compensate for losses in production at a time of rising global demand.

WTI crude futures finished Friday’s session up $3.04, or 4.6 percent, at $68.58 a barrel.

The jump in oil prices has helped support a rally in OOO, Betashares Oil ETF.

Our Algo Engine triggered a buy signal in OOO last week at $18.10 and today the ETF is trading at $19.15.

The rally in oil is also supporting STO, OSH & BHP, which are all current holdings within our ASX50 model portfolio.

Amcor – ASX 20 index

Posted on | by Leon Hinde

Amcor was added to the ASX 20 index this week, replacing AMP.

As an analysis of AMC, we  feel the current share price is trading in line with fair value, based upon FY19 EPS.  Assuming growth of around 6%, places the stock on a forward yield of 4.6%

With Amcor being a beneficiary of a weaker AUD, (95% of sales outside Australia), we see limited downside risks and recommend accumulating the stock.

Amcor goes ex-div $0.30 on the 4th of September.

CIMIC – Half Year Profit Announcement

Posted on | by Leon Hinde

Our Algo Engine triggered a buy signal in CIMIC at $40.62. We suggest accumulating the stock within the $4.1.50 to $42.50 range.

CIMIC went ex-dividend $0.75 on the 13th of June.

The next share price catalyst will be the half year profit results due to be announced on the 2nd of July. The market is looking for NPAT to be around $350 million.

CIMIC

ASX200 Index – Support at 5964

Posted on | by Leon Hinde

The ASX 200 Index finished the week up 0.8%.  The best performer was the Utilities sector, up 7.5% and the worst was the Health Care sector, down 1.3%.

5964 provides support for the index and a long bias should remain in place, whilst the index is above this level.

 

ASX 200 – XJO
Dow Jones

APA Takeover Offer – 30% Premium

Posted on | by Leon Hinde

APA received a non-binding takeover offer at $11 per share, implying a
value of almost 15x earnings.

 APA has granted access to due diligence and the offer will remain subject to regulatory approval from FIRB.

With the share price trading below the takeover offer, we’ll be weighing up the arbitrage opportunity in the week ahead.

We feel other stocks within the infrastructure sector will continue to get a boost from takeover interest and medium term support from the bond market’s tepid outlook.

One example we’re attracted to within this theme is Spark Infrastructure.