Aristocrat Continues To Firm On Higher Earnings Estimates

Posted on | by Todd

Since testing a key support level at $27.00 last Friday, shares of ALL have rallied over 10% to hit a 1-month high of $29.60 in early trade today.

The stock has been supported by suggestions that next month’s full-year profit announcement  is likely to surprise to the upside by as much as 20% in the group’s social gambling business.

At $29.40, ALL is at about 19X estimated FY 2019 earnings. In addition, given ALL’s exposure in the USA, a further fall in the AUD/USD will act as a tailwind going into next year.

ALL is part of our ASX Top 50 Model portfolio and we have an upside target of $40.50 over the medium-term.

Aristocrat

 

Crown Is Building For The Future

Posted on | by Todd

Shares of Crown Resorts have found solid support in the $12.80 to $13.00 area over the last several trading sessions.

With consistent casino and non-casino earnings from their Perth and Melbourne properties, investors are warming up to the potential benefits from CWN’s $2.2 billion project in Sydney; even if it’s 18 months from completion.

At current levels, the stock is trading at 21X FY 2019 earnings for a partially franked yield of 4.5%.

Crown is included in our ASX Top 100 Model Portfolio.

Our near-term price target is just over $14.20, with a longer-term view to $15.75

Crown Resorts

 

 

 

ALGO Buy Signal For CYB

Posted on | by Todd

Our ALGO engine maintains a buy signal in CYB near the $5.20 support area.

This “higher low” pattern is referenced to the intraday low of $5.00 posted on June 1st.

On a percentage basis, the 15.5% drop in CYB  is almost twice as much as the other ASX banking stocks over the last month.

Considering that CYB has most of its mortgage exposure in the UK, has an net interest margin of 220 basis points and is not being targeted by the Royal commission, we believe the stock is oversold.

At $5.20, CYB is trading at 12X FY 2019 earnings. Technical readings suggest a bounce back into the $5.70 area before more significant price resistance at $6.25.

CYB Bank

 

 

 

Add To Tabcorp At Current Levels

Posted on | by Todd

Shares of TAH have slipped about 6% lower over the last 10 trading sessions.

With their AGM scheduled for tomorrow, we believe is worthwhile to recap some of the company’s performance numbers released in August; this was the first report to reflect the TAH/Tatts merger.

The highlights of the report were: EBITDA up 69%, Revenues rose 71%, net profit of $28 million and EPS growth of 1.9 cents a share versus a 2.5 cent loss last year.

We believe the AGM will be a platform for TAH to announce further synergy savings from the merged entity, new product ideas and increasing revenue in the digital gaming sector.

TAH was added to our ASX Top 100 portfolio in February and our ALGO engine triggered a buy signal in early April at $4.22.

We see good value in TAH at current levels with a medium-term target of $5.40.

Tabcorp

 

 

 

 

ALGO UPDATE: Stay Long QANTAS

Posted on | by Todd

Despite widespread downside pressure and increased volatility in the ASX 200 index, shares of QAN have stabilized above the $5.10 support level.

QAN will be releasing its September quarter trading update next Thursday and  holding their AGM next Friday.

We believe that both of these events will be supportive of higher share prices.

QAN has been in our ASX Top 100 model portfolio for over a year and we suggest investors look to add to long positions in the $5.35 to $5.45 range.

Our medium-term target is $6.70 with a longer-term view to $7.35.

QANTAS

 

 

ASX Ltd Has Reached The Buy Target

Posted on | by Todd

Last week we suggested a buy level for ASX Ltd near $58.00.

With yesterday’s low intraday print at $57.80, that downside buy target has been reached.

Also, with the share price sliding over 15% lower during the last month, internal momentum indicators are now oversold and a reversion higher looks likely.

At $58.00, the stock is on a forward yield of about 4%. We see the first level of resistance near $62.60 and up to $64.00 over the longer-term.

ASX Limited

Buy The Dip In Telstra

Posted on | by Todd

Since posting an intraday low of $2.60 on June 29th, shares of TLS have rebounded smartly and reached $3.40 in late August.

Last week’s market volatility has dampened investors interest in the stock over the last few days but, at $3.10, the share price is still 20% above the June low.

Tomorrow’s AGM will be a big test for bullish investors.

In focus will be the Telco giant’s “quantitative based” executive salary and bonus plan, as well as earnings updates across the company’s spectrum.

Given TLS’s target of 45% digital sales growth by 2021, we like the long side of the stock with a near-term target of $3.60.

Telstra

 

 

 

 

 

Buy And Hold Local Gold Shares

Posted on | by Todd

Last week’s extreme volatility in global equity markets has been a net positive for the local gold mining names.

After trading as low as $1060.00 in mid-August, Spot Gold reached a 2-month high at $1226.00 last Thursday.

As illustrated on the chart below, the yellow metal is still down more than 10% over the last 6-months.

However, with last week’s change in the overall risk dynamic of equities, investors may increase their holdings in Gold as a hedge against market uncertainty.

Combined with a weaker Aussie Dollar, we see stable gold prices lifting the shares of the local miners.

Our preferred names in the Gold sector are: NCM, SBM, SAR and EVN.

Spot Gold

Newcrest Mining

Santa Barbara

Saracen

Evolution Mining

Buy Healthcare Names: CSL, RMD & SHL

Posted on | by Leon Hinde

Our Algo Engine has triggered buy signals in Sonic Healthcare, Resmed and CSL over the past few trading sessions.

RMD has experienced its first sell-off since rallying from $10 last year to $16 only a few weeks ago.

The ALGO engine is now flagging the new “higher low” at $14 and we suggest buying a 1/2 size allocation here and then waiting to see if we get another ALGO signal to add to the position.

CSL provides good long-term fundamentals. The PE is still expensive, however, 10 – 20% EPS growth is attractive! Accumulate at $180

SHL looks to be good value at $23. We see resistance is $25, so look to sell call options to enhance the return. 

Chart: RMD

Chart: CSL

Chart: SHL

 

 

Brambles Offers Value + Spin-Off

Posted on | by Leon Hinde

Our Algo Engine generated a buy signal in BXB last week and we highlight the price gap in the chart down to $10.06.

We’ve  upgraded BXB to accumulate and our buy target range is $10 – $10.40

The potential spin-off of the plastic pallet pooling business will unlock value for shareholders and provides the catalyst for us to have a favorable medium term outlook on the business, along with modest earnings growth showing up in the latest 6-month result.

Brambles