Woolworths 1H18 EBIT was up 10% on the same time last year and 1H18 NPAT came in at $900 million, an increase of 15%.
Earnings Per Share (EPS) for FY18 is likely to be around $1.35 and if we assume moderate growth into FY19 and FY20, with an EPS range $1.40 to $1.60, the stock trades on a forward yield of 4.1%.
On the above calculation, fair value for WOW is near the $26.50 range.
Woolworths
Since the release of their H1 earnings results on February 15th, shares of TLS have traded in a narrow 10 cent range between $3.40 and $3.50.
Looking past the $273 million impairment made against its Ooyala business, the growth in the TLS Enterprise and Whole businesses has been encouraging for top line growth.
The company reported earnings per share of 14.3 cents for the period and declared an interim fully franked dividend of 11 cents per share.
This was made up of a 7.5 cents per share ordinary dividend and a 3.5 cents per share special dividend.
The record date for both dividends is March 1, with payment then expected to be made on March 29.
It’s reasonable to expect some buying interest to come into the share price in front of the dividend date.
We prefer the long side of TLS at these levels and look for a return to the $4.00 handle over the medium-term.
Telstra
The S&P ASX 200 Index finished the week up 1.6%.
The best performing sector was Health Care, up 4.2% and the the worst performer was the Energy sector, down 0.6%.
Our ALGO engine triggered a sell signal for BOQ into Friday’s ASX close at $12.74.
The technical “lower high” price structure is related to the November 30th high at $13.20 and the November 1st high at $13.40.
BOQ raised $350 million from its Capital Notes offer in late 2017 after strong investor demand for the offer saw it increase from $325 million.
This corporate action saw the share prices post a mild rally before sliding down to $11.72 on February 8th.
We expect the next resistance level near $12.90 before trading back below $12.00 over the next few weeks.
Bank of Queensland
After announcing solid H1 headline numbers, shares of WOW have dropped over 1.5% in early trade to $26.95.
The NPAT gain of 14% and 9% lift in EBIT was offset by the $10 million loss from the BIG W segment of the company.
Analysts aren’t expecting the BIG W section to get much better with forecasts looking at losses between $80 and $120 Million for the full year.
The reversal from yesterday’s high of $27.92, sets up a “triple-top” formation dating back to May of last year.
We expect the next key support level for WOW is near $26.20.
Woolworths
Shares of WFD are firming today after yesterday’s earnings report failed to inspire any material buying interest.
The company posted a 13.5 % rise in annual profit to US$1.55 billion, shrugging off tough retail conditions and competition from online platforms like Amazon.
Revenue for the year to December 31st rose 17.1% to US$2.1 billion.
Some reports have noted that the lack of specific earnings guidance in yesterday’s announcement has somewhat tempered fresh buying interest.
WFD was added to our Top 20 model portfolio on February 7th at $8.89 and our ALGO engine triggered a buy signal for WFD on February 13th at $8.55.
From a technical perspective, there is a momentum switch-point at $8.75, a break of this price level suggest an extension back into the $9.00 handle.
Westfields
Inghams Group reported 1H18 NPAT of $65 million versus $51 million the same time last year, whilst revenue of $1.2 billon was down 1.7%.
The company announced an interim dividend of $0.095
FY19 EPS growth is forecast to increase by 5.5% and DPS will increase slightly to $0.20, placing the stock on a forward yield of 5.6%.
After buying ING at lower levels, we’ve locked-in profit as we don’t consider the stock a core portfolio holding.
Inghams Group
Shares of QAN soared over 9% higher in early trade, reaching a 3-month high of $5.78, as the airline reported a record $976 million profit for the December half.
The company also announced a $500 million share buyback scheme.
Earnings from the domestic operations grew by over 20%, which offset the 5.5% fall in international flights due to higher fuel costs.
We posted a report on Tuesday suggesting QAN was a buying opportunity at $5.25 in front of today’s earnings report.
We see technical resistance at the $5.81 level and suggest taking profits and looking for a lower level to buy back in front of the March 7th dividend.
QANTAS
With the company announcing a rights issue last week and going ex-dividend for 62 cents today, shares in WPL have been very active.
Our ALGO engine triggered a buy signal on Monday at $28.63.
This signal has a technical basis on the “higher low” structure relative to the $28.20 low posted in September and the $22.90 low from November 2016.
From a fundemental perspective, we believe the company’s decision to raise money to secure a bigger stake in the Scarborough gas field ensures steady earnings growth during 2018 and beyond.
We expect to see investor support for WPL in the $28.50 area and a move back into the $31.00 handle over the medium-term.
Woodside
Shares of CCL are up 3% in early trade as the company announced an 80% increase in net annual profit to $445.2 million.
Despite the underlying EBIT falling .7%, the share price has reached a 7-month high of $9.07.
In a blog post last Wednsday, we highlighted the bullish technical structure and that a break of the $8.45 level could point to an extention above $9.00.
Internal momentum indicators are now overbought and we suggest exiting long positions and looking to enter again at a lower level.
The company announced a dividend of 26 cents (70% franked) and goes ex-dividend on February 27th.
The first area of technical support for CCL will be at, or around, the $8.65 level.
Coca-Cola Amatil
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