Brambles (Buy Signal)

Posted on | by Leon Hinde | Leave a Comment on Brambles (Buy Signal)

Brambles (BXB.ASX) is now approaching a buy signal entry point.

Our algorithm engines have alerted this setup and it’s now worth establishing the entry conditions. The stock has just traded into the first level of the entry point band and we therefore, begin adding exposure.

In a weak market we could see BXB trade down to the lower range of the entry band, therefore, we split the entry parcel into two equal buy orders and place one at today’s open and the remaining 50% parcel at the lower band price of $11.50. If both orders are filled, this will generate an average entry price of around $11.85.

BXB

 

 

 

 

Property Trust – Buy Signals

Posted on | by Leon Hinde | Leave a Comment on Property Trust – Buy Signals

There’s no denying that PE’s on the property trusts look stretched and we are likely facing a period of price consolidation. Earnings growth is attractive but yields have compressed too far. In some cases, yields on property trusts of barely 3% offer investors little risk reward. However, if you feel the US will not raise rates in September, you may share my view that we could see another bounce, (approximately 5%), yet to play out.

WFD, GPT and SCG are all on my radar as buy signals. I think we get a small bounce from here and it will then pay to sell tight covered calls to double the cash flow over the next 6 months, whilst still remaining exposed to the next round of dividends.

Feel free to contact me leon@investorsignals.com to discuss how we can help set up these strategies and others on your investment portfolio.

 

Orica – Short Update

Posted on | by Leon Hinde | Leave a Comment on Orica – Short Update

Orica (ORI.ASX) short trade triggered 10 days back is now starting to roll over. This was mentioned in our monthly strategy piece, (see YouTube channel), posted at the beginning of the month. With the weak earnings trend and sector headwinds, it may pay to give this one some room to move lower and trail the stop loss down to lock in profits on the way.

ORI

Star Entertainment – (Time to add Call Options)

Posted on | by Leon Hinde | Leave a Comment on Star Entertainment – (Time to add Call Options)

On 30 June 2016, a buy signal was posted on SGR.ASX with an entry price of $5.40. The stock traded as high as $6.20 following a solid earnings result that delivered revenue growth of 6%, EBITDA growth of 14%.

Today we started selling the $6.25 November calls against client holdings for a credit of $0.14, this added premium complements the upcoming dividend of $0.07, (fully franked), on the 31st of August, (ex div date).

If exercised, the return on this trade will be approximately 15% for 5 months exposure.

For clients not yet set in SGR, our algorithm engine will continue tracking for new entry opportunities.

SGR

 

 

 

 

Ramsey Health Care FY16 Earnings Result

Posted on | by Leon Hinde | Leave a Comment on Ramsey Health Care FY16 Earnings Result

Ramsey (RHC.ASX) reported FY16 revenue of $8.6b up 18% on previous corresponding period, EBITDA of $1.2b, (up 15%) and core NPAT of $470m, (up $17+%).

FY16 dividends per share of $1.19, places the stock on a 1.5% yield.

On a forward basis into FY17, we’re looking for EPS growth of 10%+ and a 5% uptick in revenue. Growth will moderate but still remains attractive, PE is high at 30x and a forecast yield of 1.8%, assuming $1.30 in DPS.

Last buy signal triggered at $68 in late June.

RHC

 

 

 

 

 

Woolworths FY16 Earnings Result

Posted on | by Leon Hinde | Leave a Comment on Woolworths FY16 Earnings Result

Woolworths (WOW.ASX) EBIT was down 36% to $2.5b from the same time last year. NPAT (normalised) was $1.55b and NPAT, on a reported basis including write downs, came in at a loss of $1.2b.

FY17 food & liquor should begin to show positive growth and based on FY17 EPS of $1.20 and DPS of $0.80, Woolworths is now trading on a forward yield of 3.3%.

We see Woolworths breaking out of the 18 month downtrend and beginning a new technical structure of higher highs and higher lows. We collected call premium over recent time and intentionally left the stock uncovered coming into this result. With the stock now back at our fair value target, we look to sell covered calls at or near the $26 range into November or December.

WOW

 

 

 

Amcor FY16 Earnings Result

Posted on | by Leon Hinde | Leave a Comment on Amcor FY16 Earnings Result

Amcor (AMC.ASX) NPAT US$670m, EPS of $0.57 and final dividend of $0.22 CPS was inline with consensus. The numbers reflect a flat result on the same time last year, however, FY17 should see a return to underlying growth in the range of 5 – 7%.

FY17 revenue forecast of US$10b on EBIT of US$1.1b. EPS US$0.60 & DPS of US$0.55 placing AMC on a forward yield of 3.8%

We continue to see this as a buy on the dip story. Where we own AMC in the model from lower levels, we’ve been selling call options to enhance the yield.

AMC

 

 

Qube Holdings FY16 Earnings Result

Posted on | by Leon Hinde | Leave a Comment on Qube Holdings FY16 Earnings Result

Qube Holdings (QUB.ASX) released FY16 earnings with EBIT of $250m, slightly below consensus.  We see QUB as an FY18 & FY19 growth story.

Buy on any pull-back in price into the following range, $2.40 – $2.55. Our algorithm engines will be tracking this name and I’ll update you on our next entry point, once it’s triggered.

QUB

Boral FY16 Earnings Result

Posted on | by Leon Hinde | Leave a Comment on Boral FY16 Earnings Result

Boral (BLD.ASX) FY16 earnings of $400m was slightly ahead of market expectations.

Fy17 dividend yield of 3.4% based on DPS of $0.25 with underlying profit growth or around 5 – 7%. Housing and construction data, both domestically and in the  US, remain supportive for Boral and James Hardie. We continue to like these names as a “buy on the dip” story over the  next 12 months.

Our algorithm engines will continue to track these name and alert us to lower risk entry levels, should we see a pull-back in price.

BLD