Star Entertainment – Oversold
The Star Entertainment Group looks oversold and we expect to see buying interest build.
SGR goes ex div $0.13 on the 13th of August.
Aristocrat Leisure – 1H19 Earnings
Aristocrat Leisure reported a strong 1H19 result with the North American division the standout. The result also benefited from a lower AUD/USD exchange rate. Normalised profit after tax $422 + 16% in reported terms and +7.7% in constant currency. Up from $361m the same time last year.
In FY20 we forecast revenue to grow by 8% and EPS growth at a similar level. Based on this, we have ALL on a forward dividend yield of 2.2%.
Risks to the business include increased regulation, competition and slowing
customer demand. We look to buy ALL on the next Algo Engine buy signal.
The company goes ex-dividend $0.22 on the 29th of May.
Bendigo Bank – Approaching Resistance
Bendigo and Adelaide Bank is under Algo Engine sell conditions and is now approaching overbought levels and we expect to see the short-term indicators turn negative.
The chart below illustrates where we anticipate selling pressure to build.
Gold Miners ETF – Algo Buy Signal
Betashares Global Gold Miners ETF is now under Algo Engine buy conditions.
The chart below shows the range where we’re looking for buying interest to begin building.
Computershare Sell-Off
Computershare had their investor day today and the market has reacted negatively to a softer earnings outlook.
We’ve been on the short-side of this trade following the lower high formation and the Algo Engine sell signal earlier this year. The CPU business is exposed to a number of structural headwinds and we expect further weakness in the share price.
Pendal Group – Algo Buy Signal
Pendal Group is now under Algo Engine buy conditions and was added to the ASX 100 model portfolio earlier this month.
Qantas – Algo Sell Signal
Qantas Airways has been under Algo Engine sell conditions since forming a lower high in February at $6.25. The stock is now trading at $5.25 and we see little reason to change our short-side bias on this one.
Computershare – Algo Engine Sell Signal
Computershare is under Algo Engine sell conditions and has been forming a lower high pattern since topping at $20.50, September last year.
We continue to view the market’s assessment of the future earnings growth picture, as miss-guided. The factors that have lead to the recovery in earnings are transitory and the 20X PE and 2.5% yield, makes CPU too rich for our liking.
Our downside price forecast over the next 12 – 18 months is $15.00.
Carsales.com – Approaching Resistance
Carsales.Com is under Algo Engine sell conditions and with the price approaching $14 we expect selling pressure to build.
The chart below illustrates the range where selling is likely to increase.
Graincorp – Finding Support
GrainCorp is under Algo Engine buy conditions and we highlight the buying interest following the share price finding support at $7.10.
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