Aurizon Holdings – FY17 Earnings

Posted on | by Leon Hinde | Leave a Comment on Aurizon Holdings – FY17 Earnings

AZJ reported its FY17 EBIT of $836m and guided towards  FY18 EBIT growth of 8 – 11% or $900 – 960m.

Losses in both Intermodal and bulk divisions were higher than market expectations. Dividends were reduced to $0.225 for the year but this was offset by the company announcing a $300 million share buy back.

We feel FY18 EPS growth may be optimistic and the reduced dividend is something we’ve been flagging as a potential concern coming into this result.

Assuming dividends remain flat over the next 12 months, it places AZJ on a forward yield of 4.4%.

Chart – AZJ

 

 

 

 

Chart Update – Dow Jones Index

Posted on | by Leon Hinde | Leave a Comment on Chart Update – Dow Jones Index

The chart below of the Dow Jones Index illustrates the selling pressure that is now building, in what has to be viewed as an overpriced market, relative to the risks which lie ahead.

The short-term momentum indicators have turned negative and we remain cautious on banks, property developers, consumer discretionary & companies that are trading on bubble level PE ratios.

Chart – Dow Jones
Chart – Dow Jones

 

Algo Sell Signal – Goldman Sachs & General Electric

Posted on | by Leon Hinde | Leave a Comment on Algo Sell Signal – Goldman Sachs & General Electric

Our Algo Engine has triggered a sell signal in Goldman Sachs.

We maintain a negative outlook and advise running a stop-loss should the price action trade above the signal high of $235.

Chart – GS

Following the Algo Engine short signal in General Electric, the price action continues to carve-out lower levels.

Should we see GE trade down to $22, we would consider this price target as an oversold and  providing a suitable entry point for new long exposure.

Chart – GE

 

 

 

 

AGL – FY18 Guidance

Posted on | by Leon Hinde | Leave a Comment on AGL – FY18 Guidance

AGL Energy recorded a solid FY17 NPAT.  

However, the market has reacted negatively to the board de-prioritised capital management. This has happened less than 12 months after launching its buy-back program.

AGL provided FY18 Underlying NPAT guidance in the range of $940-$1,040m. Earnings growth forecast is driven predominantly by higher wholesale electricity prices.

FY18 EPS increases from $1.20 in FY17 to $1.40, placing AGL on a forward yield of 4.6%

We have previously expressed our concerns with regards to AGL being overvalued and we continue to maintain our $22 price target.

AGL