Iron Ore Collapse
Iron Ore prices have collapsed to trade at 90 p/t. We shift to an overweight position and anticipate a rebound in the new year.
5-year graph
10-year graph
Gold Price Rally
Spot gold is up 1.2% to US$1,816.80 per ounce, as yields on the U.S. 10-year Treasury notes slipped to their lowest level in about a month.
TWE – Buy
Treasury Wine Estates is under Algo Engine buy conditions.
TWE continues to adjust to a post pandemic/post Chinese tariff environment. FY21 EBIT of $510 exceeded market expectations. After a number of years of disappointment for TWE in this region, we see America’s division accelerating growth into FY22.
FY22 EBIT growth is forecast to be in the mid to high single-digit range.
8/11 update: Buy above the $11.50 support range and place the stop loss below the recent pivot low of $11.48.
Evolution – Algo Buy Signal
Evolution Mining is under Algo Engine buy conditions.
Trader instructions
Buy: @market above $3.50 support
Sell: stop loss $3.45
Northern Star – Buy
Northern Star Resources is under Algo Engine buy conditions and is our preferred gold exposure.
Trader Instructions
Buy: @market above $9.00 support
Sell: stop loss $8.90
Lendlease – FY22 Outlook
Lendlease has warned of a challenging year to come as COVID-19 puts a dampener on development and construction globally.
FY21 net profit after tax of $377 million was in line with the company’s guidance, largely due to divesting its loss-making engineering and services.
We expect to see an improvement in earnings towards the end of FY22.
RWC Rallies 25.3%
Reliance Worldwide Corporation was added to our model portfolio on 29 September and it’s now up 25.3%
JHX Rallies 14.6%
James Hardie Industries was added to our model portfolio on 12 October and is now up 14.6%.
REA Group is up 67%
REA Group is among the best-performing stocks in our ASX 100 model portfolio, with the share price up 67% since being added in September last year.
REA Group has acquired 100 percent of the shares in Mortgage Choice for $1.95 a share, valuing the company at $244 million. REA is now focused on accelerating its financial services strategy to become a leading player in the home loan market.
REA is a high quality business with terrific growth potential, however, the 65x PE multiple is a little rich and we recommend waiting for the next Algo Engine buy signal.
5/11 update: REA Group delivered 22% revenue growth for Q1 FY22.
Link – Algo Buy
Link Administration Holdings reported FY21 profit of $112m. FY22 guidance is now low single-digit revenue growth and flat EBIT.
The downside in the share price is underpinned to a certain degree through the announced buyback of $150m.
The forward dividend yield is 2.7%.
5/11 update: Carlyle Group has returned for a renewed buyout offer of $5.38 per share which values the target at around $2.8 billion.
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2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453
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