Algo Signal – Buy Medibank
Our Algo Engine triggered a buy signal in MPL going into yesterday’s close. We expect buying interest to remain supportive of near-term price action.
MPL goes ex-div 6.5 cents on the 6th September.
Medibank Private
Medibank – Rising Political Risk
Medibank has been under selling pressure on fears of rising political risk. The Labour Party appears likely to campaign into the next Federal Election with a promise to limit annual premium rate increases to 2% for two years. This is well below the 4-6% historical trend.
Despite the concern highlighted above, we view Medibank as a buying opportunity, as it approaches an oversold level.
A rally back to $3.00 should provide an opportunity to set covered call options and generate additional premium income to complement the 6.5 cent September dividend.
Medibank Private
Star Entertainment – Growth Outlook
Star has entered into a private placement with its JV partners, Chow Tai Fook and Far East Consortium to raise $490m at $5.35. The alliance agreement has been entered to build an additional 5 JV towers at the Gold Coast and one in Sydney.
The SGR board has revised the dividend pay-out ratio to a minimum of 70% of normalised EPS. The announcement was also accompanied by a trading update – Normalised group revenue for the March 18 quarter was up 19%.
FY19 revenue of $3 billon, EBIT $440m, EPS $0.33 and DPS $0.20 places SGR on a forward dividend yield of 3.7%.
Star
ETF Watch – World Ex Australia
Our Algo Engine generated a buy signal yesterday in the SPDR S&P World ex Australia ETF.
The signal was triggered at $21.63 as the stock retraced back to form a “higher low” formation. $20.50 is also a relevant price target from the high back in 2015. Investors wanting to add global portfolio exposure through one simple transaction may consider this ETF.
3 year average annual return is running at around 9%.
If investors wanted to play a US dollar recovery, they may opt for the un- hedged WXOZ ETF.
GPT – Buy write delivers 10% return
GPT Group is currently in our ASX 50 model portfolio and with price action bouncing off the $4.60 support level, we recommend investors look at a buy-write strategy.
GPT goes ex-div $0.123 on the 29th June.
GPT
SEEK – Algo buy signal
Seek has been triggered as an Algo Engine buy signal.
With a weak broader equity market backdrop, we’re in no hurry to buy today.
However, should we see Seek trade closer to $18.50 in tomorrow’s session, we’ll revisit the buy-side idea.
Keep this one on your watch list.
SEK
Caltex – watch for entry point
Caltex has sold off $6.00 in the past 4 weeks. With the stock now trading 13x earnings and 4% dividend yield, we expect to see buying interest starting to build.
There is no current Algo Engine buy signal, therefore investors will be well advised to manage the trade by scaling into the purchase.
CTX
XJO Rebound To Be Capped At 5900
The XJO index will struggle to rebound back above 5900.
This leaves 80 points between the current value and where selling pressure is likely to resume.
XJO Index
Transurban – oversold & buying support building
Our Algo Engine triggered a recent buy signal in Transurban, and with the stock now trading $11.10, we consider it a buying opportunity.
TCL goes ex div $0.265 on the 29th June.
Transurban
Crown – Back at support level
Our Algo Engine recently triggered a buy signal in Crown Resorts and with the stock now back on support, we recommend investors buy CWN near the $12.50 level.
Crown Resorts
Level 17 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453