Computershare FY20 earnings are in-line with guidance, down 20% on the same time last year.
What’s now concerning is FY21 guidance has been downgraded and management is now forecasting a further 10% decline next year.
We remain negative on the CPU outlook and retain our “short” exposure.
NASDAQ has closed below the 10 day average following profit-taking in tech stocks.
We continue to see the overall index as “overvalued” given compressed yields and negative revenue growth for a large number of the index constituents.
Bega Cheese remains under Algo Engine buy conditions and we highlight the recent higher low formed at $4.40.
The stock price continues to trade higher heading into the 2H20 earnings result.
Seek is under Algo Engine sell conditions and we remain on the short-side of the trade.
Two negatives we focus on:-
1}Surprise need to raise money in the bond market; and
2} Announcing they were dumping the final dividend in a bid to preserve capital, blaming the “uncertain environment” for the decision.
The above post was from Monday. Following today’s earnings release, Seek is down 13%. Seek has been a high conviction “short” trade expressed on our blog and in our Monday night webinar.
We suggest covering the short and taking profit.
Sydney will raise up to $2bn through a renounceable one-for-5.15 rights issue at $4.56 a share, which is a 15% discount to the last close and underwritten by UBS.
SYD reported a half-year loss of $53.6 million, with no interim dividend declared. Revenue down 36% to $511m and EBITDA down 35% to $300m.
China’s iron ore imports reached a record high in July of 110m/t, up 24% on the same time last year.
James Hardie Industries FY21 profit guidance now stands at $US330m-$US390m. June quarter earnings were flat on the same time last year.
Aurizon Holdings FY20 earnings beat expectations with EBIT of $910m, this was within the mid point of FY20 guidance of $880-930m.
FY21 EBIT guidance was 6% lower than consensus. Forward yield remains attractive at 5.%. Little in the way of EPS growth and a 100% dividend payout ratio provides a cap to the upside.
AZJ has initiated a new $300m on-market buyback which will help underpin the stock price. This is a good candidate for an at-the-money buy-write to drive portfolio cash flow.
FY20 EBITDA of $492m was 5% below the same time last year. 36 x FY22 earnings looks expensive.
Good news is priced in and risks are now skewed to the downside. We add REA to our short sell list. Forward dividend yield 1%.
Q2 earnings for the S&P 500 are expected to decline by 44%, the worst drop since the fourth quarter of 2008, when profits fell 67%.
This week we’re watching the following results.
Monday Marriott International
Tuesday
Wednesday Cisco
Thursday Bristol-Myers.
Friday Applied Materials
NASDAQ remains above the 10-day average.
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