Treasury Wines – Earnings
Treasury Wine Estates remains under Algo Engine sell conditions.
FY20 EBIT guidance of $530-540 million is below consensus. The outlook for FY21 earnings has deteriorated, which is likely to weigh on the share price.
Northern Star – Production Update
Northern Star Resources provided 4QFY20 trading update with production at 267 k/oz and sales 263 k/oz. Kalgoorlie and Jundee offset weaker results at Super Pit.
NST will resume dividend payments and the balance sheet improves following the paydown of $200m of debt.
FY21 dividend yield increases to 2% with forecast EBIT of $1.2bn
We have a price target on NST of $15.50
Alumina – ATO Dispute
Alumina has run into issues with the Australian Tax Office following a review of transfer pricing arrangements with the AWAC JV.
The claim relates to a 20 year period and the ATO is claiming an additional tax of $200M plus interest. Other penalties may also be due and will be further communicated to the JV next month.
We forecast FY21 EBIT to increase to $350m, supporting a forward yield of 6%.
REA – Profit Taking
REA Group is under Algo Engine sell conditions. We expect selling pressure to increase at $109.
SEEK
Seek is under Algo Engine sell conditions and we see selling pressure increasing near the $22.50 level.
iShares Global Consumer Staples ETF
iShares Global Consumer Staples is under Algo Engine buy conditions and is a current holding in our iShares ETF model portfolio.
$74 is likely to act as support as we see a defensive rotation as market flows.
The fund aims to provide investors with the performance of the S&P Global 1200 Consumer Staples Sector Index TM, before fees and expenses. The index is designed to measure the performance of global consumer staples companies and may include large-mid or small-capitalization stocks.
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Alumina – Update
Alumina is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
We see price support building and note the short-term momentum indicators are now trending higher.
Bega Cheese – Rallies 15%
Bega Cheese switched to Algo Engine buy conditions back on the 15/6 at $4.50. Following a retest of the initial entry level this week, Bega then rallied 15%.
We’ve seen other food-related companies report strong earnings with an increase in stay at home cooking, supporting industry fundamentals. Despite this, we traded out of BGA in Friday’s session and locked-in the gain.
1H20 earnings showed mixed performance and we’ll be reviewing the full-year results when announced in August.
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