Buy Signal – Woodside Petroleum
The current price retracement in WPL to $31.00 provides a low risk entry point.
WPL is a current holding in the ASX 20 and ASX 50 model portfolios.
Merger of TABCORP and Tatts Group.
After a year of negotiations and due diligence, the Australian Competition Tribunal (ACT) has approved the $11 billion merger of TABCORP and Tatts Group.
Despite an objection by the ACCC, the ACT granted the merger and will announce the full details of their decision on November 22nd.
Tatts Group shareholders will vote on the merger on November 30th, which is expected to just be a formality.
Both shares have been placed in a trading halt this morning.
After trading as low as $3.90 on August 14th, shares of TAH have been moving steadily higher as the prospects of the merger approval have increased. The synergies of the merger could see TAH shares rally into the $5.60 area.
Algo Update – Banks
CBA and SUN have Algo Engine sell signals suggesting both names are currently overbought.
ANZ, NAB & WBC have buy signals. The most recent signal in this group has been yesterday’s buy signal on WBC. Following this the stock has now been added to the model portfolio.
The graph below shows the recent price action for the MVB (Vaneck Vectors Bank ETF).
Algo Buy Signal – IFL
Our Algo Engine triggered a buy signal in IFL on the 1st Nov and we’ve added this to our model portfolio with a stop loss below $10.00
Algo Update – Dulux Group
Dulux Group reported NPAT up 10% to $142m. FY18 outlook is for 3 – 5 % growth.
We view DLX as full value with the stock now trading 20%+ higher than the Algo Engine buy signal triggered on the 27th July at $6.60.
Amcor – Looking to Acquire Guala Closures Group
Amcor has been shortlisted to acquire the global leader in closures. Amcor identified closures as a new strategic segment at its investor sessions in June 2017.
If regulators approve the deal, Amcor may look to issue new equity.
We continue to view Amcor as a core holding and advise selling call options to enhance the return.
AMC trades on a forward yield of 4%.
Santos Takeover Bid 21% Premium
A consortium of energy investors has made an all-cash takeover offer for Santos worth A$11 billion.
Indicative pricing for the bid was expected to be around A$5.30 per share, a 21% premium to Wednesday’s closing price.
Buy AMC and SHL
The current market weakness provides investors with the opportunity to add AMC and SHL to their portfolios at a reasonable entry level.
We advise selling out-of-the money call options on the other side of the February/March dividend period.
The above strategy is producing 10 – 12% annualised cash flow from the dividends and call option income.
General Electric
General Electric has sold off following the announced business restructure and cut in dividend. Based on forward earnings and 15x multiple a conservative valuation is $16 for GE shares.
Look for buying to develop within the $16 – $18 range.
General Electric
QANTAS – Short Trade Update
On the 7th of November we posted an alert regarding the “short trade” set-up in QANTAS. Since then, QAN has sold off from $6.34 and is now trading at $5.77.
The price action will likely find buying support in the $5.50 – $5.75 range and traders should look to close out the short side position.
QANTAS
Level 17 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453