Rio Tinto – Buy

Posted on | by Leon Hinde

Rio Tinto is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

Iron Ore prices have held up well in the recent market sell-off, with spot prices remaining around USD$80 p/t.

Buy RIO at current levels.

Newcrest – Buy

Posted on | by Leon Hinde

Newcrest Mining has moved to bolster their balance after raising $1.1bn which will be used for growth.

Newcrest’s balance sheet is in good shape with over $1.5bn in cash and about the same in undrawn facilities. Gearing remains low at 15%.

NCM has now rallied to $30+ and we will consider taking profit within the $31 – $32 price range. 

CBA

Posted on | by Leon Hinde

Commonwealth Bank of Australia – unaudited cash profit fell 23% in the three months ended March 31 to $1.3 billion from $1.7 billion in the year-earlier.

CBA has provisioned $1.5 billion for COVID-19 provisions.

The below graph provides a picture of the trend that short-term traders may be interested in.

Incitec Pivot

Posted on | by Leon Hinde

Incitec Pivot is under Algo Engine sell conditions.

IPL is raising A$600mn via an underwritten placement and A$75mn via a share purchase plan at a 9% discount to the closing price on 8 May.

IPL’s capital raising is likely to be a positive near-term catalyst as a result of removing the funding risk. Although, we expect downward pressure on commodities to make the near-term operating conditions difficult for both IPL and ORI.

Invocare

Posted on | by Leon Hinde

InvoCare is under Algo Engine buy conditions.

In mid-April IVC announced up to $250m equity raising
at $10.40/share.

April revenue was down 13% and we’re seeing costs higher than
anticipated. Improvement in trading conditions should occur as the partial easing of restrictions take place.

We assume 2020 earnings will be down 10% and see a recovery into 2021 & 2022.

We’ll revisit IVC if it trades back below $10.00