Healthscope – Takeover Offer At $2.45

Posted on | by Leon Hinde

Last month Healthscope’s shares jumped as much as 22% to $2.17 on the news BGH Capital-AustralianSuper consortium will offer $2.36 cash per share as an indicative takeover price. 

Since then, HSO shares have settled back at $2.05 – $2.10 and we feel value is now on offer and investors should look to accumulate the stock.

Healthscope runs 43 private hospitals across Australia and 24 pathology laboratories in New Zealand.

In May, Healthscope refused to open its books to a prior takeover offer, instead, saying they’ll look into the sale and lease back of its hospital assets.

Pressure is now mounting on the HSO board of Directors to engage and allow the acquiring entity access to the data rooms and due-diligence process.

NOTE: This morning a competing bid has been announced, Brookfield Capital has now Offered $245.5 per share.

Healthscope

Lendlease – $700 million problem

Posted on | by Leon Hinde

Lendlease’s engineering and services division announced a further $350 million write down last week, which brings the NorthConnex tunnel project write-offs to more than $700 million.

An extraordinarily large number on a project that offers a total revenue of $2 billion. As a result of this, the board of Directors are currently considering if the division is “core” to the Leanlease operation.

Currently the division, contributes less than 15% to LLC’s overall earnings.

The markets reaction has been brutal and with the stock down over 20% in the last two days.

At under $14.00, we consider this a unique long-term opportunity to accumulate LLC at a discounted valuation.

Lend Lease

 

TWE, SEK & CAR – Above Trend EPS Growth

Posted on | by Leon Hinde

TWE, SEK and CAR are all displaying current Algo Engine buy signals and are  therefore a holdings within our ASX100 model portfolio.

We recommend accumulating TWE stock within the $14.50 – $15.50 price range.

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Seek is another name where above average EPS growth is likely to be achieved in FY19 & FY20.  We recommend accumulating the stock within the $17 – $18 price range.

CAR delivered a disappointing earnings update earlier this month, however, with the stock price correcting 25%, we now see value emerging.

 

 

 

Amcor – Rally Is Underway

Posted on | by Leon Hinde

Amcor has been a high conviction buy strategy based on the likelihood of hedge funds covering their short positions in the stock ahead of the Bemis takeover being finalised.

As illustrated on the chart below, the upside target for Amcor is $14.50+.

Amcor

CYB – Value Ahead Of Earnings Release

Posted on | by Leon Hinde

Look to accumulate CYB on any weakness near $4.70 ahead of their full year earnings release on the 20th of November.

Considering that CYB has most of its mortgage exposure in the UK, has an net interest margin of 220 basis points and is not being targeted by the Royal commission, we believe the stock is oversold.

CYB

Buy The Dip In Ansell

Posted on | by Leon Hinde

Our Algo Engine has triggered a buy signal in Ansell.  And with the share price finding support at $22.50, we recommend accumulating the stock.

Technically, the share price looks to be carving out a “double bottom” pattern dating back to September of last year at $22.10.

Our upside target is $24.50, at which time investors can consider either taking profit or selling slightly out of the money call options to enhance the income.

ANN goes ex div $0.30 in Feb 2019.

Ansell

 

Buy Downer EDI

Posted on | by Leon Hinde

During our Opportunities in Review webinar series, we’ve been suggesting Downer EDI as a buy at $6.75.

Downer EDI has confirmed 13% EPS growth for the year ahead, which should support a $7.50 to $8.00 initial price target.

Downer EDI

Buy IAG At Current Levels

Posted on | by Leon Hinde

In our Opportunities in Review webinar series, we’be been suggesting IAG as a buy below $7.00.

A recent broker note estimates that IAG will have a further $600 million to spend on shareholders, which could come in the form of a $300 million special dividend and $300 million share buyback.

Look for a rally to $7.50 and sell covered call options.

IAG

Buy Crown Resorts

Posted on | by Leon Hinde

We recommend accumulating Crown Resorts near the $11.75 price range

CWN offers investors an attractive return with a partially franked dividend yield of 4.9% and is trading at 20x FY19’s estimated earnings.

Crown

Buy UniBail-Rodamco-Westfield

Posted on | by Leon Hinde

UniBail-Rodamco is the European property conglomerate which acquired the global shopping center giant, Westfield.

As UniBail continues consolidating their expanded portfolio, investors can expect to hear more about “non-core” asset sales.

The long-term play for UniBail is to keep the best of the high quality assets from the combined groups.

A combination of higher bond yields and impatient retail investors have seen the stock price fall to $12.50.

This places URW on a 6% yield and we’re now looking at a share price that should start to find institutional buying interest.

Unibail