ALGO Update: Stay Long Cimic Group

Posted on | by Todd

Shares of Cimic Group have started the week over 4% higher and have reached a 2-month high of $44.75 in early trade.

Investors are reacting to the recent news that CIM was awarded a 4-year, $480 million contract by QCoal to continue mining services operations at QCoal’s Bowen Basin Mines.

Our ALGO engine triggered a buy signal for CIM on June 1st at $40.73 and the stock has been part of our ASX Top 100 portfolio since June of 2016.

From a technical perspective, we see solid support near $42.50 with an initial upside target at $47.50.

Cimic Group

Tabcorp – Strong Buy

Posted on | by Leon Hinde

Our Algo Engine generated a recent buy signal in Tabcorp at $4.20 and we again reaffirm our “strong buy” position in the stock.

Last week, the Australian Federal Government passed legislation which will prohibit the use of ‘synthetic lotteries’ like Tabcorp’s main lottery competitor, ‘Lottoland’.

TAH effectively has a monopoly on lottery activity, as the company holds the licence in every state, with the exception of Western Australia, which is state-run.

We feel Tabcorp’s defensive earnings are being undervalued by the market and the August earnings result will be a catalyst to drive the share price higher. 

Tabcorp goes ex-div $0.125 on the 11th August.

Tabcorp

ALGO Buy Signal For QANTAS

Posted on | by Todd

Our ALGO engine triggered a buy signal on QAN into yesterday’s  ASX close at $6.16.

This “higher low” pattern is referenced to the intraday low of $5.95 posted on February 5th.

A recent broker note from CITI has retained their buy rating on the stock with a $7.90 price target.

Part of CITI’s analysis focused on the airline’s dynamic hedging program, which has reduced the drag on their overall profitability during the recent rise in fuel prices.

QAN was added to our ASX Top 50 Model portfolio in July of 2017 at $5.25.

QANTAS

 

 

ALGO Update: Keep OZL On The Radar

Posted on | by Todd

Since posting a high of $10.70 on June 12th, shares of OZL have dropped over 12% and reached a 2-month low of $9.35 in early trade today.

As illustrated in the chart below, the price of High Grade Copper has dropped a similar amount over the same period of time.

The negative slide in copper prices has overshadowed the positive news that OZL has acquired the remaining 10% interest in Avanco Resources in  Brazil.

We consider this acquisition a fundamental boost to miner’s extensive mine life and will add to their “lean business” model outlined at the Macquarie  Mining Forum earlier this week.

Our ALGO engine triggered a buy signal on OZL at $8.60 on February 12th and the stock has been in our ASX Top 50 model portfolio since June of 2015.

We will look to add to long positions around the $9.20 support level over the near-term.Oz Minerals

High Grade Copper

 

 

China & Asia Top 50

Posted on | by Leon Hinde

In the second half of 2018, value in oversold Asian markets will likely produce a good long-term entry level.

Our preferred ETFs are the IZZ China Large-Cap and the IAA, iShares Asia top 50.

Chinese indices are now down between 10 – 20% this year.

iShares Asia 50

iShares China Large Cap

IPL – Take Profits Or Sell Call Options

Posted on | by Leon Hinde

In mid-2017, our Algo Engine generated a buy signal in IPL and more recently we reaffirmed the entry into IPL when the stock looked to be finding support near $3.40 range. 

Since then, IPL has rallied 8% and is now closing in on our $3.70 price target. The short term momentum indicators are also now approaching an overbought range. 

IPL goes ex div 5 cents on the 23rd of November. Selling $3.70 September  call options will add an additional 11 cents of income per share.

IPL

BHP – 5% plus dividend yield

Posted on | by Leon Hinde

In FY18,  BHP will produce US$46 billion  in revenue and generate EBIT of US$16 billion, which will support a dividend yield of 5%+

If we look out into FY19 and assume moderate growth achieved through higher energy prices and disciplined cost control, it’s likely BHP will increase the dividend to US$1.40.  This will then place the stock on a forward yield of 5.4%.

BHP goes ex-div US$0.60 on the 7th of September. Adding a $34.01 (Euro) call option into October,  boosts the cash flow by a further $1.25 per share.

 

ALGO Sell Signal For Amcor

Posted on | by Todd

Our ALGO engine triggered a sell signal for AMC into the ASX close at $14.60.

The “lower high”pattern is referenced to the $14.76 high posted on February 8th.

Since trading as low as $13.10 on May 4th, the share price has risen close to 12%. At this point, we suggest clients either take profits on open positions or use a covered call strategy.

For those interested in the covered calls, we suggest selling the $14.75 calls into October for 35 cents.

This will allow investors to receive the 30 cent dividend on September 4th while increasing cash flow into the portfolio.

Amcor