Webjet – Opportunity Approaches

Posted on | by Leon Hinde

Webjet is under Algo Engine buy conditions.

FY19 earnings grew at 43% and were ahead of market consensus.  EBITDA was $125mn. FY20 guidance is now between $150mn and $200mn, representing 30%+ growth for next year.

The stock trades on a 1.9% dividend yield. Webjet goes ex-div $0.135 on 18th Sept and we expect our buy target of sub $12.00 to occur.

We see buying supporting building within the $11.50 to $12.00 range.

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Ramsay Healthcare – Valuation Review

Posted on | by Leon Hinde

Ramsay Health Care is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

RHC trades on 21x forward earnings, dividend yield of 2.4% and underlying EPS growth into FY20 of 2 – 4 %.  Forecast FY20 revenue $13bn, EBIT $1.2bn, EPS $3.00 & DPS $1.55.

In a low rate environment, we see the new trading range for Ramsay within the $65 – $70 band.

We see buying support building at the $64 price level.

 

Global Banks ETF

Posted on | by Leon Hinde

Betashares Global Banks is under Algo Engine buy conditions and is a current holding in our ETF model portfolio.

We recently added to the position at $5.85 and the ETF is now trading at $6.25.

Global sector rotation is occurring and money is switching from momentum to value. This could be a repositioning ahead of this week’s ECB meeting and next month’s anticipated Fed Reserve rate cut.

The yield on the global bank ETF is  1.3%.  We don’t consider this a core holding and will, therefore, look to take profit on the trade.

 

CIMIC – Value to Emerge

Posted on | by Leon Hinde

Cimic Group is under Algo Engine sell conditions and following the recent 1H19 earnings, the stock has sold off over 20%.

Mining profits were up +26% but construction-related profit was down 15%. The broad thematic around the CIMIC business remains attractive and we continue to monitor for an approaching entry point.

Note: Short-term indicators are now turning positive.