Buy The Dip In Gold

Posted on | by Todd | Leave a Comment on Buy The Dip In Gold

Over the last two weeks, the price of Gold has made two attempts at breaking through the $1300.00 mark.

On both occasions, the yellow metal dropped back to find support just above the $1270.00 level.

This technical pattern is known as a “pennant” formation and is a continuation pattern. In this case, the break out points for range extension are $1308 and $1263.

Fundamentally, the case for buying Gold remains compelling. The surge in volatility across global stock markets combined with heightened geopolitical uncertainty supports the logic for owning Gold or Gold mining shares.

We expect the price of Gold to break through the $1300 level over the near-term. Our preferred Gold mining shares are NCM, EVN, SBM and SAR.

Investors looking to profit from a rally in Gold can either buy these shares outright, or buy their CFDs listed on our SAXO Go platform.

Spot Gold

Newcrest Mining

Santa Barbara Mining

Evolution Mining

 

 

 

 

 

 

 

Aristocrat – FY17 Earnings

Posted on | by Leon Hinde | Leave a Comment on Aristocrat – FY17 Earnings

ALL delivered $543m, (37% increase), in underlying profit for FY17.

A good result was offset by a negative response to their announced acquisition of Big Fish Games. The acquisition of Big Fish is the second deal this year where Aristocrat is expanding into social gaming.

FY18 is forecast to deliver a further 20% growth with net profit of $650m, EPS $1.05, DPS $0.42 placing the stock on a forward yield of 1.9%.

We hold ALL in our ASX 50 model portfolio, following the Algo Engine buy signal triggered in July at $20.25.

 

 

 

Bank Shares Roiled On Royal Commission Announcement

Posted on | by Todd | Leave a Comment on Bank Shares Roiled On Royal Commission Announcement

Shares of the “big-4” banks are trading sharply lower as the Government announced a $75 million Banking Royal Commission before the ASX open today.

When making the announcement, PM Turnbull said it was a regrettable but necessary action.

The terms of the inquiry are wider than the market expected and will include the entire financial services sector. The final report will be due in February 2019.

We have been giving the banks a wide berth recently due to likely headwinds from slower loan growth and falling profit guidance. We’ll continue to watch the ALGO engine for trade updates and future levels to enter the market.

MVB Aussie Banking ETF

 

 

SEEK – Valuation Review

Posted on | by Leon Hinde | Leave a Comment on SEEK – Valuation Review

SEEK provided a trading update at its AGM yesterday, upping its guidance for
EBITDA growth to 13% and reaffirming NPAT guidance of $220-230m.

FY18 Revenue $1.3b, EBIT $340m, EPS $0.63, DPS $0.44, placing the stock on a forward yield of 2.4%.

Our Algo Engine last triggered a buy signal back in June, when SEEK was trading at $16.40.  A pullback to $17 will provide a lower risk entry level.

SEEK

 

ALGO Signal: Sell Brambles

Posted on | by Todd | Leave a Comment on ALGO Signal: Sell Brambles

Our ALGO engine triggered a sell signal in BXB on yesterday’s ASX close at $10.19.

This was the highest closing price since June 26th, but still within the technical “lower high” pattern based on the May 29th high trade at $10.70.

We consider the current price level to be near the top of the counter trend range and ready to trade lower.

Fundamentally, BXB is trading at 19X earnings and a 3.1% yield based on FY18 earnings

For those CFD traders using our SAXO Go platform, we see the next significant price support level near the early November lows at $9.40.

Brambles

 

BHP – Valuation Review

Posted on | by Leon Hinde | Leave a Comment on BHP – Valuation Review

BHP’s  medium-term cost guidance for iron-ore and coal is better than expected and will help to underpin EPS targets into FY18 and FY19.

FY18 revenue will be up slightly to $40b, EBIT $13b with reported profit in FY18 forecast to increase 10% to $6.4b.

Assuming dividends per share of $0.80,  BHP is placed on a forward yield of 4%.

We see upside in BHP’s share price to $30 and suggest selling a March $29.50 call option to enhance the yield.

 

 

Origin – Reaffirmed FY18 Guidance

Posted on | by Leon Hinde | Leave a Comment on Origin – Reaffirmed FY18 Guidance

 ORG indicated it’s targeting a Crude Oil price of US$40 per barrel distribution break-even for FY20.

ORG hosted its 2017 investor day,  this week, at which time they reaffirmed their FY18 guidance with respect to capital expenditure, debt management and APLNG.

The market is encouraged by the potential for up-to $500m in cost savings,  ($110m OPEX and $400m CAPEX), over the next 2 – 3 years.

ORG will likely reinstate dividend distributions, building to $0.40 per share in FY19 and $0.50 in FY20.

These targets have ORG trading on a FY19 forward yield of 5%.

We continue to see ORG as a buy on the dip opportunity and look to keep exposure to the name in portfolios over the next 3 to 5 years.

Origin Energy

 

 

 

 

 

Healthcare – Preferred Holdings

Posted on | by Leon Hinde | Leave a Comment on Healthcare – Preferred Holdings

CSL, SHL, RMD & RHC remain our preferred healthcare names.

Resmed is looking a little expensive and we’d like to repurchase on the next retracement.

Sonic Healthcare:  we expect 5 – 8% EPS growth and consider this a good buy/write addition to portfolios.

Ramsey Healthcare – Accumulate with $74 price target

CSL:  15 – 20% EPS growth remains attractive and adding a covered call option enhances the yield.

CSL