Value Emerging In Local Asset Managers
Investors will be interested to look at the sell-off in the domestic fund managers, such as AMP, BTT, PTM, MFG & PPT.
Within this group, BTT and PTM are the two names which are on our watch-list.
PTM
BTT
Star Entertainment – Algo Update
Our Algo Engine triggered a buy signal in SGR at $5.11 during yesterday’s ASX trading session.
The stock looks oversold and now sits within our forecast “value range”.
The August earnings result will likely provide the catalyst for the stock to re-rate higher.
SGR
ALGO Update: Stay short CCL
Our ALGO engine triggered a sell signal for CCL on December 15th at $8.60.
As illustrated in the chart below, the share price has formed a “triple top” formation at the $9.10 level over the last 8-weeks.
In their last report, CCL booked a 10% rise in earnings for its alcohol and coffee business, while the soft drink, juice and energy business fell 6.5%.
We see the first level of support at $8.50, followed by $8.10.
Investors trading on our SAXO Go platform can look to sell CCL with a stop order just above $9.20
Coca-Cola Amatil
IAG – Buy-write Producing 10-12% Cash-Flow
The key take-away from the this week’s AGM is that IAG remains confident of reducing its cost base by >A$250 million from A$2.5 billion to A$2.25 billion by 2020.
The company also reaffirmed the outlook for 10% EPS growth over the next 3 years.
IAG provides a solid buy-write opportunity with the stock retracing back from recent highs and now finding support at $7.50.
FY19 profit is forecast to be $1billiWn, EPS $0.45 and DPS $$.36, placing the stock on a forward yield of 4.8%.
Newcrest Firms As Spot Gold Approaches The Top Of The Range
The price of Spot Gold has been trading in a broad “pennant” formation since early January.
The range of this pennant are bound by the January 25th high of $1365 and the March 19th low of $1307.
We believe that the balance of fundamental and technical analysis supports the idea that the pennant will be resolved to the upside with Gold trading back above $1365.
The share price of NCM has been beaten down about 15% since a tailing dam failure at their Cadia mine in NSW in early March.
With their quarterly production report scheduled to be released on April 26th, we believe the stock has found a solid base in the $19.40/50 area for a move back into the $22.00 handle over the medium-term.
Newcrest Mining
Spot Gold
OZL Firms On Higher Copper Prices
Since posting a low of $2.90 per pound on March 26th, the price of US High Grade Copper has risen over 6% and closed at $3.08 in NY Today.
This is good news for shareholders of OZL as the share price has traded back over $9.20 in early trade.
Our ALGO engine triggered a buy signal in OZL on December 12th at $8.60, and the stock is also included in our ASX Top 100 portfolio.
We see a key resistance area in the $9.35 area; once that level is broken, we expect to see solid range extension back into the $10.00 handle.
OZ Minerals
Dow Jones – Down 10% in 2018
The Dow Jones 30 index is down over 10% this year and a pattern of “lower high” formation is building.
In addition, we have noticed a pattern of falling volume on “up days” and increased volume on days when the Dow trades lower.
24,622 now acts as the most recent level of resistance.
Dow Jones 30 Index
Buy Amcor – Price action finds support
We recommend investors buy Amcor and hold the position into the September dividend period.
To add to the return, covered call options should be sold at the $15.00 strike into December.
AMC goes ex div $0.295 on 4th September.
Seven Group vs Seven West Media
We have reviewed the performance of Seven Group holdings versus Seven West Media.
Whilst Seven Group Holdings is a well performing growth business, Seven West Media is the free to air television business, which faces structural headwinds.
It’s worth highlighting the performance of the recent ALGO signals and the contrast with Seven Group last displaying a buy signal within a strong uptrend and Seven West Media displaying a recent sell signal on the “lower high” formation within the ongoing downtrend.
Telstra Is Back In The Buyzone
Shares of Telstra have been under pressure for the last 12 months and posted an 8-year low of $3.08 in early trade today.
Investors’ concerns over the telco giant’s profitability and decision to cut its dividend have been the driving forcesa in the share’s decline.
We remain upbeat on the TLS’s prospects and expect market sentiment will soon become positive.
It’s reasonable to expect that the Federal Government will decide to write down the value of the NBN, which will lead to higher margins for TLS.
This would make its 22 cents per share dividend secure over the longer-term.
At the current share price, that pencils out to a fully-franked yield of 7%.
Telstra
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2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
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