Local Oil Names Firm As WTI Extends Recent Gains

Posted on | by Todd | Leave a Comment on Local Oil Names Firm As WTI Extends Recent Gains

West Texas Intermediate (WTI) Crude Oil rose over 3% in NY trade to reach a 7-week high of $65.70.

The boost was a result of EIA data showing US crude stocks unexpectedly fell by 2.6 million barrels, or 0.6%.

For the week, WTI has risen over 5%.

In Monday’s blog, we mentioned our preference to buy local names STO, WPL and OSH.

These three stocks are up over 2% for the week and we still see scope for further upside range extension. Also, all three of these stocks are in our ASX Top 50 Model portfolio.

On the daily charts, the next area of resistance for STO is near the $5.65 level, with support at $4.90.

The chart of OSH shows resistance at $7.70 and support at $7.05

The valuation metrics for WPL are more complex. The share price has under performed the Spot WTI price by 24% since September and is 21% below it’s EPS momentum trend.

At 6.50 X EBITDA, WPL may be the best pick for a move back into the price gap above $29.65.

Santos

Oil Search

Woodside

Algo Update – Goodman Group (Sell = 22% Return)

Posted on | by Leon Hinde | Leave a Comment on Algo Update – Goodman Group (Sell = 22% Return)

The Algo Engine triggered a sell signal in Goodman Group earlier this week. The signal resulted in GMG being removed from ASX 50 model portfolio. The position was held for 550 days with a return of 22.2%, plus an additional $0.39 in dividends.

Goodman Group has been a very strong performer within the REIT sector, with underlying EPS consistently at high single digits. The sell signal can be viewed as a cautious reminder of the compressed 3.4% yield GMG now trades on.

Goodman Group

TPG Reported 1H18 Earnings

Posted on | by Leon Hinde | Leave a Comment on TPG Reported 1H18 Earnings

   TPG reported 1H18 EBITDA up 0.1% to $418 million. The 1H result was ahead of expectations and TPG upgraded their full year earnings guidance on the back of ongoing cost reductions.

We continue to view TPG as expensive and with significant execution risk around upcoming capital expenditure, we prefer the short-side of this trade.

FY18 EPS $0.42 and DPS $0.04, places the stock on a forward yield of less than 1%.

TPM

 

 

Tabcorp – In 2020

Posted on | by Leon Hinde | Leave a Comment on Tabcorp – In 2020

We look at what the financials are likely to be in 2020; post the Tatts Group integration and cost savings.

FY20 revenue $5.5 billion, EBIT $880m, (FY17 was $325m) with underlying earnings growth of 6 – 8% per year and a forward dividend yield into 2020 of 5.5%.

Investors will be well served by tracking TAH for an upcoming entry point as the stock price re-bases near current levels.

TabCorp

ALGO Update: Stay Long Oz Minerals

Posted on | by Todd | Leave a Comment on ALGO Update: Stay Long Oz Minerals

Our ALGO engine triggered a buy signal in OZL at $8.60 on February 12th. Since then, the share price hit a high of $10.00 on February 27th.

OZ Minerals has a market cap of $2.793 billion. They primarily focus on exploration, development, mining and processing of  projects within  Australia.

OZL are mainly focused on mining Copper and Gold, while holding ownership of the Prominent Hill mine in South Australia.

The company is largely debt-free while holding an overall cash balance of $729 million back in late December 2017.

We see good support at the $9.00 area and upside potential of $10.45 over the medium-term.

OZ Minerals

 

Buy GPT & WFD At Current Levels

Posted on | by Leon Hinde | Leave a Comment on Buy GPT & WFD At Current Levels

We recommend buying GPT & WFD and placing a stop-loss orders below the recent support levels, indicated on the relevant charts below.

Investors may prefer to hold the position and sell call options to enhance the income, whilst staying exposed to the next round of dividends.

GPT will pay $0.123 dividend on 29th June.

WFD will pay $0.16 dividend on 11th August.

 

 

WTI Rally Lifts Local Oil Names

Posted on | by Todd | Leave a Comment on WTI Rally Lifts Local Oil Names

The price of West Texas Intermediate (WTI) Crude Oil rose 3.5% last week and settled just over $62.00.

This places WTI pretty much in the middle of the $66.80 to $58.00 range we have seen so far this year.

What makes this noteworthy is that last week’s rally coincided with a rally in the USD.  In short, the USD vs Crude inverse correlation looks to be diminished for now.

The technical picture in WTI is improving and the next upside target is near the February highs of $63.40.

As a result, shares of STO, WPL and OSH are all up over 1.5% in early trade today.

All three of these stocks are in our ASX Top 50 Model Portfolio and we prefer the long side from current levels.

We’ll update each of these stocks in subsequent postings.

Woodside Petroleum

Oil Search

Santos

 

 

 

ALGO Sell Signal For Galaxy Resources

Posted on | by Todd | Leave a Comment on ALGO Sell Signal For Galaxy Resources

Our ALGO engine triggered a sell signal in Galaxy Resources into Friday’s ASX close at $3.57.

The “lower high” pattern is referenced to the January high near $4.50.

Lithium stocks, in general, have seen downward pressure recently after the release of a research paper which estimated Lithium production would double by 2025.

From a technical perspective, we see scope for  GXY shares to retrace back to the $2.80 level.

Galaxy Resources