COH – Algo Buy Signal

Posted on | by Leon Hinde

Cochlear is now under Algo Engine buy conditions and has been added to our ASX 100 model portfolio.

We expect 10% EPS growth over the next 12 months. Although, the stock remains expensive at 40x earnings and trading on a 1.8% yield.

Since writing the above post in Dec last year, COH has rallied from $175 to a high of $257. The subsequent pullback which bottomed on Monday this week has seen buying interest rebuild at the higher low of $222.

This is the second cluster of Algo Engine buy signals and we’ve taken the opportunity to add to our original allocation.

Reece – FY21

Posted on | by Leon Hinde

Reece is now under Algo Engine buy conditions.

The FY21 result highlighted strong sales trends in both Australia and
the US, however, costs in the US dampened the operating profit.

The market is looking for 10% EPS growth into FY22 and FY23 which places REH on 30X forward earnings and 1% dividend yield.

Cleanaway – Buy

Posted on | by Leon Hinde

Cleanaway Waste Management is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

Cleanaway financial results for the year ended 30 June 2021

Statutory Net Profit After Tax (NPAT) increased 31.2% from $112.6 million to $147.7 million.

On an Underlying basis compared to the year ended 30 June 2020 (“FY20”) Cleanaway reported:

• NPAT increased 2.1% from $150.0 million to $153.2 million
• EBITDA increased 3.8% from $515.7 million to $535.1 million
• Net revenue increased 4.7% from $2.1 billion to $2.2 billion
• Operating cash flow increased 5.7% from $401.5 million to $424.4 million
• Final dividend increased 11.9% from 2.10 cents per share (cps) to 2.35 cps, taking the total dividend for the year 12.2% higher to 4.60 cps

Zip – Earnings Review

Posted on | by Leon Hinde

Zip Co is under Algo Engine buy conditions.

Revenue was up 150% to $403m and the pre-tax loss -$718m.

Zip said its cash earnings before tax, depreciation and amortisation loss was $22.9 million, which missed consensus expectations for positive earnings of between $8 million and $9 million.

Its total reported loss of $653 million was just below the total amount of capital that Zip raised over the year to support its global growth.

We’re watching ZIP with a great deal of interest but remain cautious on the sector trends with regards to increasing bad debts.

US Durable Goods

Posted on | by Leon Hinde

U.S. business equipment spending strong even as new orders flat in July
New orders for key U.S.-made capital goods were unexpectedly flat in July amid supply constraints and a shift in demand to services, suggesting that business spending on equipment could slow in the second half after robust growth over the past year.

Bega – FY21 Earnings

Posted on | by Leon Hinde

Bega Cheese is under Algo Engine buy conditions and is a current holding in our ASX model portfolio.

Accumulate within the $5.00 – $5.25 price range.

Update: 27/8 Bega FY21 Earnings release: Performance highlights

 Reduction in normalised EBITDA to net debt leverage
ratio from 2.35 times to 2.25 times
 Normalised EBITDA increased by 38% to $141.7 million
 Statutory EBITDA increase by 108% to $182.7 million
 Operating cash flow $111.4 million