CBA – Algo Sell Signal
CBA has a lower high structure and we see price resistance near the current trading range.
AZJ – Algo Sell Signal
We’ve been warning on the outlook for AZJ based on the high payout ratio and earnings headwinds. The Algo Engine recently triggered a sell signal at $5.25 and we’re now beginning to see the price action roll over.
Buy WPL – Higher Low Formation
WPL is making a higher low formation and we view the $31 range as a buying opportunity.
Stop-loss below $29.50.
Is Retail Food Group In The Buy Zone ?
Shares of RFG have traded as high as $6.25 in January of this year. Since then the price has dropped over 30% to the current level of $4.40.
RFG is now priced at a trailing P/E of 12X , which is lower than the industry standard of 23X.
The stock is currently trading at -51% below its intrinsic level of $8.9. This mismatch indicates a potential opportunity to buy low as MD Andre Nell expects underlying net profits to rise about 6% in 2018.
Finally, its debt relative to equity is 54%, which has been diminishing over the past couple of years showing its capacity to pay down its debt.
S&P/ASX 200 finished down 1.2%.
The S&P/ASX 200 Index finished the week down 1.2%.
The best performer was the Information Technology sector, up 1.9% and the worst performer was the Energy sector, down 2.1%.
Buy Signal – Westpac
Our Algo Engine generated a buy signal in Westpac yesterday, following the recent price retracement from $33.65 to $31.61.
We see limited earnings growth for the banks and recommend investors overlay an out-of-the-money call option to enhance the cash flow.
Buy Signal – Woodside Petroleum
The current price retracement in WPL to $31.00 provides a low risk entry point.
WPL is a current holding in the ASX 20 and ASX 50 model portfolios.
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.
Algo Update – Banks
CBA and SUN have Algo Engine sell signals suggesting both names are currently overbought.
ANZ, NAB & WBC have buy signals. The most recent signal in this group has been yesterday’s buy signal on WBC. Following this the stock has now been added to the model portfolio.
The graph below shows the recent price action for the MVB (Vaneck Vectors Bank ETF).
Algo Buy Signal – IFL
Our Algo Engine triggered a buy signal in IFL on the 1st Nov and we’ve added this to our model portfolio with a stop loss below $10.00
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