Our Algo Engine generated a buy signal in Spark Infrastructure mid last year.
With the price action trading down to $2.30, we now see scope for higher prices in Spark (SKI) as global bond yields move lower on trade tension fears.
Spark
Our Algo Engine recently generated a buy signal in Healthscope and we anticipate a suitable entry price will be within the $2.10 – $2.20 price range.
Healthscope
Our Algo Engine generated a recent buy signal in Tabcorp at $4.20 and we again reaffirm our “strong buy” position in the stock.
Last week, the Australian Federal Government passed legislation which will prohibit the use of ‘synthetic lotteries’ like Tabcorp’s main lottery competitor, ‘Lottoland’.
TAH effectively has a monopoly on lottery activity, as the company holds the licence in every state, with the exception of Western Australia, which is state-run.
We feel Tabcorp’s defensive earnings are being undervalued by the market and the August earnings result will be a catalyst to drive the share price higher.
Tabcorp goes ex-div $0.125 on the 11th August.
Tabcorp
In the second half of 2018, value in oversold Asian markets will likely produce a good long-term entry level.
Our preferred ETFs are the IZZ China Large-Cap and the IAA, iShares Asia top 50.
Chinese indices are now down between 10 – 20% this year.
iShares Asia 50
In mid-2017, our Algo Engine generated a buy signal in IPL and more recently we reaffirmed the entry into IPL when the stock looked to be finding support near $3.40 range.
Since then, IPL has rallied 8% and is now closing in on our $3.70 price target. The short term momentum indicators are also now approaching an overbought range.
IPL goes ex div 5 cents on the 23rd of November. Selling $3.70 September call options will add an additional 11 cents of income per share.
IPL
In FY18, BHP will produce US$46 billion in revenue and generate EBIT of US$16 billion, which will support a dividend yield of 5%+
If we look out into FY19 and assume moderate growth achieved through higher energy prices and disciplined cost control, it’s likely BHP will increase the dividend to US$1.40. This will then place the stock on a forward yield of 5.4%.
BHP goes ex-div US$0.60 on the 7th of September. Adding a $34.01 (Euro) call option into October, boosts the cash flow by a further $1.25 per share.
Our Algo Engine generated a recent buy signal in HSO and the short term momentum indicators have now turned positive.
Our Algo Engine generated a recent buy signal in CSR and the short term momentum indicators have now turned positive.
CSR
We continue to like the long side of the energy names.
BHP, STO, OSH and ORG are all current holdings within our model portfolio.
Enegy ETF OOO by Betashare was also a recent Algo Engine buy signal. The price is now up 10% from the entry signal earlier this month.
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
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Sydney, NSW 2000
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Investor Signals Pty Ltd
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