Crude Oil Firms In Front Of Tonight’s OPEC Vote

Posted on | by Todd

Prices of all grades of Crude Oil pushed higher overnight as OPEC members prepare to vote on future production levels today in Vienna.

Reports from the meeting have shown no clear consensus from the cartel with the Saudi’s proposing an increase of 1 million bpd, Qatar suggesting 500,000 and Iran rejecting any increase in the daily quota.

Market reports suggest a 500,000 increase is the likely outcome, which would be moderately bearish for crude prices. The result of the vote is expected by 10:00pm, Sydney time.

Both OSH and WPL have been trading near the top-end of their recent ranges and will likely be driven by OPEC’s decision next week.

Oil Search

Woodside Petroleum

 

Amcor – ASX 20 index

Posted on | by Leon Hinde

Amcor was added to the ASX 20 index this week, replacing AMP.

As an analysis of AMC, we  feel the current share price is trading in line with fair value, based upon FY19 EPS.  Assuming growth of around 6%, places the stock on a forward yield of 4.6%

With Amcor being a beneficiary of a weaker AUD, (95% of sales outside Australia), we see limited downside risks and recommend accumulating the stock.

Amcor goes ex-div $0.30 on the 4th of September.

ALGO Update: Remain Overweight TAH

Posted on | by Todd

Despite the announcement that both WA and VIC will raise race field fees, the share price of TAH continues to build upside support from the $4.50 area.

Several broker notes have suggested that even though the increased fees could lower net profits by close to $5 million, the consensus price target remains in the $5.20 to $5.50 range.

Our ALGO engine triggered a buy signal on TAH at $4.22 on April 4th and the stock was included in our Top 100 Portfolio in early February.

TAH will pay a 12.5 cent dividend on August 11th and we suggest accumulating shares at these levels.

Tabcorp

 

Increased Funding Costs Limit Upside For Local Banks

Posted on | by Todd

The domestic banks have rebounded significantly over the last two weeks with ANZ and CBA both rising over 10% from their lows in early June.

However, this optimism may be short lived as some of the world’s most “Systemically Important Financial Institutions” (SIFI Index) have been trading sharply lower over the last three months.

This banking index includes JP Morgan, Barclay’s and Commerzbank; banks that provide funding to domestic banks in Australia.

Aussie banks are heavily depended on USD-funding from these banks (and others) and will likely feel the pinch on earnings as US rates trend higher and USD liquidity becomes more expensive.

We have been cautious of the local banks and suggest investors look to use this recent rally to off-load long exposure in the banking sector.

SIFI Index

CBA

ANZ

CIMIC – Half Year Profit Announcement

Posted on | by Leon Hinde

Our Algo Engine triggered a buy signal in CIMIC at $40.62. We suggest accumulating the stock within the $4.1.50 to $42.50 range.

CIMIC went ex-dividend $0.75 on the 13th of June.

The next share price catalyst will be the half year profit results due to be announced on the 2nd of July. The market is looking for NPAT to be around $350 million.

CIMIC

ALGO Sell Signal For Caltex

Posted on | by Todd

Our ALGO engine triggered a sell signal on CTX into yesterday’s ASX close at $31.15.  The “lower high” structure is referenced to the high of $32.02 posted on April 20th.

Since announcing stronger profit guidance numbers on June 12th, shares of CTX have risen over 8%.

Internal momentum indicators are now approaching the overbought area near $32.00 and a near-term correction lower looks to be the most likely direction.

We see strong resistance in the $32.25 area and initial support at $30.40.

CalTex

 

 

 

Enhance Cash Flow On TCL And SYD

Posted on | by Todd

Our ALGO engine triggered a sell signal on both SYD and TCL into yesterday’s ASX close at $7.47 and $12.20, respectfully.

We suggest either taking profits on the stock or using the option strategy  outlined below.

With both of these names going ex-dividend on June 28th, we suggest selling a call option above the market to increase cash flow and enhance the return.

For TCL, we are looking to sell the October $12.50 call for around 24 cents and collect the 28 cent dividend.

For SYD, we will sell the October $7.75 call for around 12 cents, which will keep investors in the stock to collect the 18.5 cent dividend.

Transurban

Sydney Airport

ALGO Update: SGR Is Good Value Below $5.00

Posted on | by Todd

After trading as high as $5.45 on May 28th, shares of Star Entertainment Group slipped over 13% to reach a 1-year low of $4.73 last week. 

However, several broker notes have recently rated the stock as an “outperform” citing increased revenue during the month of May and targeted the share price to rise to $6.25 over the medium-term.

Our ALGO engine triggered a buy signal in SGR on April 12th at $5.05. We consider buying SGR  below $5.00 a good value for client portfolios.

Star Entertainment Group