Algo Engine – Open Buy Signals

Posted on | by Leon Hinde | Leave a Comment on Algo Engine – Open Buy Signals

Below is a list of the current ASX top 50 stocks that have open buy signals from our ALGO engine.

Some of these trends are maturing and are in the latter stages of their price expansion. However, taking the time to look through the charts and overlaying the ALGO Engine signals will be a worthwhile exercise.

TWE, WES, WOW, ALL, ANZ, ASX, AZJ, BHP, CSL, DXS, FMG

GMG, IAG, JHX, MQG, NAB, ORG, ORI, RIO,S32, SCG, SGP & SHL.

If your access to the charts and signals has expired, please contact me leon@investorsignals.com

 

Algo Engine – Preliminary Research

Posted on | by Leon Hinde | Leave a Comment on Algo Engine – Preliminary Research

We have contracted a third-party firm to conduct a study on the ALGO Engine signals and trading model performance.

The preliminary results have supported my assumptions made by following 18 years of practical experience in the markets. The methodologies developed are now being integrated into a model using the following technical principles.

Our Algo Engine is capturing higher low buy points in individual stocks which make up the ASX top 50 index. When the XJO itself is making “higher highs” and “higher lows”, this produces a very high success rate.

Buying into these patterns can keep investors exposed to major bullish momentum without the human emotion of prematurely taking profits on the trade, and importantly,  automating the stop-loss when the upward price momentum begins to reverse.

The chart below shows the performance of the “long only” ALGO Engine signals. The model is based on buying $50k in all long signals and holding the long position until a subsequent short or sell signal is triggered.

An example of this logic is also displayed on the individual stock sample below using Amcor.

For a comprehensive copy of our preliminary research paper, please contact me on leon@investorsignals.com

 

Chart – Algo Engine Amcor History
Chart – Algo Engine Equity Return
Chart – Algo Engine XJO Benchmark

 

IBM -Where is Support

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IBM has approximately US$3.8 billion remaining on its current share buy-back plan. Over the last two years, the company has averaged about $4 billion per year in share repurchases .

IBM annual yield is now running at around 3.70% or equivalent to US$6.00, that’s well above US Treasuries.

Our Algo Engine generated a buy signal at around $155 back in September last year. Since then, the stock rallied to $183 before last week’s disappointing earnings result caused the stock to sell-off. The price structure looks like we may see a retest of the $150 support level in the near -term. 

Chart – IBM Div History
Charts – IBM

 

 

 

Resmed – Buy the Dip

Posted on | by Leon Hinde | Leave a Comment on Resmed – Buy the Dip

RMD will report their 3QFY17 results on 27th April. Early success of the AirFit 20 series should help to underpin year-on-year underlying earnings growth 15%+ to $US$520m.

FY18 we expect revenue of US$2.3b, EBIT US$580m, (from US$520in FY17), EPS US$3.10 and DPS US$1.45, placing the stock on a forward yeild of 2.1%

We like RMD’s growth outlook and therefore we’re encouraged to buy RMD ahead of the result and to add to the position on price retracements.

To help enhance the yield, we’re selling out-of-money call options, allowing for reasonable capital growth whilst at the same time increasing the cash flow from the dividend and call option income to over 10% p/a.

Chart – RMD

 

 

 

 

 

Australian Bank Earnings

Posted on | by Leon Hinde | Leave a Comment on Australian Bank Earnings

On 2nd May, ANZ will report their half-year earnings. The market is expecting a net profit of around $3.7b and DPS for the half year of $0.80.

4th May, NAB will report their half-year earnings.  Net profit should be around $3.4b and DPS of $1.00.

5th May, Macquarie Bank reports. Net profit is expected to be similar to last year at $2.15b and DPS of $2.52

8th May, WBC report their half-year result. Net profit should be $4b and DPS $0.95

On average, the market is looking for approximately 3% underlying EPS growth among the banks and dividends to remain steady, or the same as the previous 12 months.

Charts – MVB (Vaneck Aust Bank ETF)

 

 

Coca-Cola – 1H17 Outlook

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CCL downgraded its outlook for 1H17 due to weakness in the Australian beverage performance.

CCL expects underlying NPAT will decline in 1H17 and expects FY17 NPAT to be in line with FY16 at around $420m

If we assume no earnings growth into FY18 and a continuation of the $0.45 cent per year dividend, it places the stock on a forward yield of 4.6%.

FY18 revenue $5.2b, EBIT $680m & EPS $0.54.

Charts – CCL

 

JP Morgan & General Electric

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The following charts of Dow Jones’ large caps General Electric and JP Morgan, provide an interesting technical perspective of one of the world’s largest industrial conglomerates and one of America’s largest financial institutions.

GE reported late in the week and at first glance the headline number looked okay, but after digging deeper the free cash flow provided a concern and the stock sold off.

In the case of JP Morgan and other US banks, we’ve watched their share prices sell-off from the March highs as the long end of the yield curve flattens. The implication for banks is, a flattening yield curve will reduce their net interest margins.

US banks have now retraced on average 10%+ from their recent highs.

Chart – GE
Charts – JPM