ASX reports its half-year earnings on the 15th of February.
The consensus expectations are for NPAT to increase by 4% to $220 million and the company to declare a interim dividend of $1.03.
This places ASX on a forward yield of 3.7% and we see upside potential in the stock.
With recent Algo Engine buy signals in NCM and GDX (Gold ETF) we look to add exposure to client accounts across leading names within the sector.
We recommend taking profit in the IZZ China Large-Cap ETF.
Within the ASX 50, OSH, STO, WPL, ORG & BHP are the names investors consider when looking for exposure to Oil and LNG.
Currently WPL, ORG and BHP remain in our ASX50 model following a series of structural “higher low” formations.
OSH is not currently in our model portfolio.
The negative we see in the stock relates to market concerns surrounding their stretched balance sheet.
Oil Search has committed to substantial projects in PNG and Alaska and should oil prices fail to hold $60 – $80 per barrel, Oil Search may need to raise capital.
This week, Oil Search reported solid 4Q17 production at the upper end of their guidance range, with revenue of US$389mn.
Our preference remains adding long exposure on any pullback in BHP, WPL & ORG.
We are also watching for the next Algo Engine buy signal in the oil ETF OOO.AXW.
Origin Energy remains in our ASX 50 model portfolio following the Algo Engine buy signal in March 2017 at $6.50.
With the price action creating a another “higher low” formation over the past few trading sessions, short-term traders can consider taking a long position with stop orders below $8.75
Origin Energy
Our Algo Engine triggered a recent buy signal in IVC and the stock has continued to drift lower.
The next range of support is $14.30 , followed by the up trending support line marked as “support 2” in the graph below.
The negative price action over recent days is being driven by the market’s reaction to a change in industry competition in the UK and concerns that similar challenges may emerge in Australia.
IVC reports full year earnings result on 19th February.
InvoCare
Our Algo Engine recently triggered a buy signal in IVC at $15.71.
With the stock trading on a forward yield of 3% and underlying earnings growth of 8%, we feel investors should be watching for a near-term entry point.
FY18 NPAT is forecast to be $67m, EPS $0.61 and DPS $0.47 fully franked.
Invocare
Aristocrat Leisure has created a “higher low” formation at $22.50, and we see scope for the stock to retest the recent high of $24.00.
Internal momentum indicators have turned higher, which suggests that broad investor interest has returned to the buy-side of the stock.
ALL remains in our ASX Top 50 model portfolio.
Amcor will provide an earnings update to the market on the 12th of February and we expect the recent sell-off to find buying support ahead of the update.
The short-term momentum indicators are still trending lower but we feel value is beginning to emerge and investors should continue to watch this name for a move higher.
Medibank remains in our ASX50 model portfolio from lower levels and we continue to view the stock as a worthwhile buy-write strategy at the current “higher low” price formation.
MPL pays $0.053 dividend on the the 7th of March and when complimented with a $3.30 June call option, (credit $0.11), the strategy delivers 10%+ in annualised cash flow.
MPL reports 1H18 earnings on the 16th of February and the market is looking for 3 – 5% EPS growth and NPAT of $230 million.
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