Macquarie Group – FY17 Earnings

Posted on | by Leon Hinde | Leave a Comment on Macquarie Group – FY17 Earnings

FY17 revenues were broadly flat on last year at $10.6b. Operating costs were down slightly which helped to produce an approximate 7% uplift in net profit to $2.2b.

FY17 EPS $6.58 and a very solid final dividend of $2.80 takes the payout ratio to 72% and now places the  stock on a 5.5% yield into FY18.

With the stock is up 50%  during the last 12 months and now trading on 15x forward earnings, further upside is likely to be limited. Flat revenue will continue to place pressure on management to drive down operating costs.

FY18 forecast revenue $10.5b. net earnings $2.2b, EPS $6.50 & DPS $4.90.

Chart – MQG

 

 

BHP – Where is the 50% Retracement

Posted on | by Leon Hinde | Leave a Comment on BHP – Where is the 50% Retracement

At $21.00,  BHP will be trading at the 50% retracement level of the 2016 rally.

Often, we’d expect this level to provide buying support. The Algo Engine is now flagging the higher low structure and therefore, within the $21.00 – $22.50 range, we look to identify the short-term momentum indicators turning positive, to confirm our entry point.

Chart – BHP

 

 

Origin Increases Beetaloo JV

Posted on | by Leon Hinde | Leave a Comment on Origin Increases Beetaloo JV

ORIGIN INCREASES INTEREST IN PROSPECTIVE BEETALOO JOINT VENTURE TO 70%

Origin Energy Limited (Origin) today announced it had increased to 70%  its share in the Beetaloo Joint Venture after acquiring Sasol Petroleum Australia Limited’s (Sasol)  35% share.

Origin CEO, Frank Calabria said, “Having recently announced the discovery of a material shale gas resource in the Beetaloo Basin, Origin has seized the opportunity to increase its interest in the Beetaloo Joint Venture by acquiring Sasol’s 35 per cent share.

Our Algo Engine triggered a buy signal in early March at or near $6.25. We remain long the stock and see upside potential to $8.00.

Chart – ORG

 

 

Scentre Group – Update

Posted on | by Leon Hinde | Leave a Comment on Scentre Group – Update

Scentre Group (ASX: SCG) today announced its first quarter update for the three months to 31 March 2017. The Group’s operations continue to perform strongly with developments progressing well and comparable speciality sales up 2.4% for the 12 months to 31 March 2017

The Group maintains its guidance for full year growth in funds from operations (FFO) of approximately 4.25%. The distribution guidance of 21.73 cents per security is also maintained.

We like SCG as an income contributor to client portfolios. When complimented with a tight covered call, we’re delivering 10 – 12% annualised cash flow and allowing for moderate capital growth.

Chart – SCG

 

 

Woolworths – 3Q17 Earnings

Posted on | by Leon Hinde | Leave a Comment on Woolworths – 3Q17 Earnings

WOW has reported very strong Aust Food sales for the 3Q17.

If we assume FY18 revenue of $57b, EBITDA $3.5b, Net Profit $1.55b and dividends increasing from $0.70 in FY17 to $0.80 cents in FY18, it places WOW on a forward yield of 3%.

Based on the above metric, we think WOW is now fully valued and investors should add a covered call above the market to enhance the return.

Chart – WOW