Merger of TABCORP and Tatts Group. 

Posted on | by Leon Hinde | Leave a Comment on Merger of TABCORP and Tatts Group. 

After a year of negotiations and due diligence, the Australian Competition Tribunal (ACT) has approved the $11 billion merger of TABCORP and Tatts Group. 

Despite an objection by the ACCC, the ACT granted the merger and will announce the full details of their decision on November 22nd. 

Tatts Group shareholders will vote on the merger on November 30th, which is expected to just be a formality.

 Both shares have been placed in a trading halt this morning. 

After trading as low as $3.90 on August 14th, shares of TAH have been moving steadily higher as the prospects of the merger approval have increased. The synergies of the merger could see TAH shares rally into the $5.60 area.

 

 

 

 

 

 

Ramsay Rallies After AGM Statement

Posted on | by Todd | Leave a Comment on Ramsay Rallies After AGM Statement

Shares of Ramsay Health Care have jumped over 3.5% to $67.25 in early trade after the release of its AGM statement.

According to the release, management reaffirmed that it expects its core earnings per share to grow between 8% and 10% for FY 2018.

Based on the market reaction, investors may have been expecting the company to downgrade its guidance considering that private hospital cover has dropped to it lowest level in five years.

For a high capitalization stock, RHC trades on high volatility and wide trading ranges.

The “lower high” pattern is still in place with key resistance in the $68.30 area and support near the September lows of $61.20.

 

Concensus EPS for FY18 $2.84 v $2.35 for FY17

 

 

Amcor – Looking to Acquire Guala Closures Group

Posted on | by Leon Hinde | Leave a Comment on Amcor – Looking to Acquire Guala Closures Group

Amcor has been shortlisted to acquire the global leader in closures. Amcor identified closures as a new strategic segment at its investor sessions in June 2017.

If regulators approve the deal, Amcor may look to issue new equity.

We continue to view Amcor as a core holding and advise selling call options to enhance the return.

AMC trades on a forward yield of 4%.

 

 

 

Buy AMC and SHL

Posted on | by Leon Hinde | Leave a Comment on Buy AMC and SHL

The current market weakness provides investors with the opportunity to add AMC and SHL to their portfolios at a reasonable entry level.

We advise selling out-of-the money call options on the other side of the February/March dividend period.

The above strategy is producing 10 – 12% annualised cash flow from the dividends and call option income.

 

 

Crude Oil Slips Lower After IEA Report

Posted on | by Todd | Leave a Comment on Crude Oil Slips Lower After IEA Report

Spot Crude Oil prices fell sharply in overnight trade after a report from the International Energy Agency (IEA) said that global oil demand is much weaker than OPEC consensus figures and will weaken further in 2018.

The report also showed that US shale, and other non-OPEC producers, will add an additional 1.4 million barrels per day of supply on top of the fall in demand.

These comments pushed the front-month WTI Crude contract down over 2% to $55.10.

Oil traders have gained confidence in the rebalancing effort lately, with impressive OPEC compliance and a high likelihood that the cartel extends its production cuts, perhaps through the end of 2018, when they meet later this month.

We continue to like WPL and ORG as our preferred buy-side opportunities.