Star Entertainment – Growth Outlook

Posted on | by Leon Hinde | Leave a Comment on Star Entertainment – Growth Outlook

Star has entered into a private placement with its JV partners, Chow Tai Fook  and Far East Consortium to raise $490m at $5.35. The alliance agreement has been entered to build an additional 5 JV towers at the Gold Coast and one in Sydney.

The SGR board has revised the dividend pay-out ratio to a minimum of 70% of normalised EPS. The announcement was also accompanied by a trading update – Normalised group revenue for the March 18 quarter was up 19%.

FY19 revenue of $3 billon, EBIT $440m, EPS $0.33 and DPS $0.20 places SGR on a forward dividend yield of 3.7%.

Star

ALGO Buy Signal In Rio Tinto

Posted on | by Todd | Leave a Comment on ALGO Buy Signal In Rio Tinto

Our ALGO engine triggered a buy signal for RIO into the ASX close yesterday at $72.70.

The “higher low” structure is referenced to the $68.60 low posted on August 12th.

Analysts have retained their buy  rating and $90.00 price target on the mining giant’s shares after it announced the sale of its stake in the Kestrel coal mine for US$2.25 billion.

RIO was added to our ASX top 100 Model portfolio last March at $61.40.

RIO Tinto

 

ETF Watch – World Ex Australia

Posted on | by Leon Hinde | Leave a Comment on ETF Watch – World Ex Australia

Our Algo Engine generated a buy signal yesterday in the SPDR S&P World ex Australia ETF.

The signal was triggered at $21.63 as the stock retraced back to form a “higher low” formation. $20.50 is also a relevant price target from the high back in 2015. Investors wanting to add global portfolio exposure through one simple transaction may consider this ETF.

3 year average annual return is running at around 9%.

If investors wanted to play a US dollar recovery, they may opt for the un- hedged WXOZ ETF.

AMC Nears Resistance At $14.50

Posted on | by Todd | Leave a Comment on AMC Nears Resistance At $14.50

We suggested buying AMC in a blog posting on March 7th at $14.06.

Since the start of the year, AMC has been trading in a pennant formation with support in the $13.70 area and firm resistance at $14.50.

The share price traded to $14.26 today and we are looking at $14.50 as a price inflection point.

A break higher could extend to $14.80, which would offer and opportunity to sell the $15.00 calls into December.

This would allow investors to collect the September dividend of 29.85 cents, as well as 60 to 70 cents in option premium for the sold calls.

AMCOR

 

 

 

Stress Is Building In the Inter-bank Lending Market

Posted on | by Todd | Leave a Comment on Stress Is Building In the Inter-bank Lending Market

While much of the financial media has been pointing to the threat of a trade war as the source of recent market volatility, we have also noticed rising stress in the inter-bank funding market.

As illustrated in the chart below, the LIBOR-OIS spread has spiked from 22 basis points to almost 60 basis points over the last 5 weeks.

The LIBOR-OIS spread reflects the amount of premium one bank requires from another bank to loan them money.

In simple terms, when banks start to question the financial health of other banks, the spread widens.

Rising funding costs are a headwind to global equity markets, which in turn acts to dampen bond yields; especially in the longer end of the curve.

The practical impact of this dynamic has been seen in the recent firming in some of the local interest sensitive names.

At these levels, we prefer the long side of SYD, TCL, SCG and WFD

LIBOR-OIS Spread

Sydney Airport

Transurban

Scentre Group

Westfields

ALGO Buy Signal For Bluescope Steel

Posted on | by Todd | Leave a Comment on ALGO Buy Signal For Bluescope Steel

Our ALGO engine triggered a buy signal on Bluescope Steel into yesterday’s ASX close at $14.56.

The “higher low” price pattern is referenced to the $13.50 intra-day low posted on February 6th.

BSL reached an all-time high at $16.80 on March 2nd before falling over 14% to $14.40 on the threat of steel import tariffs from the USA.

We added BSL to our ASX Top 100 model portfolio on February 6th at $14.15.

BSL is currently trading at 12X 2018 earnings and we see the next upside resistance area near $15.85.

Bluescope Steel