XJO – S&P/ASX 200 Road Map

Posted on | by Leon Hinde | Leave a Comment on XJO – S&P/ASX 200 Road Map

The S&P/ASX 200 index finished the week up 0.5%. 

The best performer was the Energy sector, up 3.3% and the worst performer was Utilities sector, down 1.9%. 

With global equity markets selling-off again in the overnight session, (following ongoing concerns around trade wars), index traders should stay short the market and run a stop-loss on a reversal back through 5806 on the XJO.

US large cap financials will kick-off March quarter earnings later next week and with solid earnings expected, we may see a late week reprieve in selling.

5630 will likely become a mid-week support level for the XJO.

 

Westfield Corp – Generating 10% income

Posted on | by Leon Hinde | Leave a Comment on Westfield Corp – Generating 10% income

Westfield has a take-over offer on the table from European giant Unibail-Rodamco for the equivalent of $10.00 per share.

A combination of a weak US dollar and a fall in Unibail’s share price has seen WFD trade below the initial offer. With the stock finding support at $8.50 we feel there’s a low risk opportunity to buy WFD and sell covered calls.

The strategy generates 10% annualised cash flow and allows for a moderate increase in capital growth.

WFD goes ex-div $0.165 on the 11th August .

Westfield

Medibank – Rising Political Risk

Posted on | by Leon Hinde | Leave a Comment on 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

Posted on | by Leon Hinde | Leave a Comment on 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

Posted on | by Leon Hinde | Leave a Comment on 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.