Aurizon Holdings is under Algo Engine buy conditions.
The share price is supported by a combination of the ongoing share buyback program and 100% dividend payout, which places the stock on a forward yield of 4.9%.
AZJ goes ex-div $0.115 on the 25th Feb. Adding a $5.75 June call option boosts the annualized cash flow to 10%.
Alacer Gold is under Algo Engine buy conditions and we see value at $5.50. If gold remains under pressure in the next few trading sessions we may see AQG at our entry target.
We continue to see long-term value in CIMIC, supported by structural tailwinds within the infrastructure sector. The company recently announced they’re writing off 1.8bn and exiting their Middle East business to focus on Aust, NZ, and Asia.
Yesterday’s profit release was in line with guidance at $800m of underlying NPAT. FY20 is forecast to see between 1 – 6% growth and a new guidance range of $810-850m has been provided.
Dividends are expected to resume in FY20 and investors should be positive on the strong Q4 cash flow. CIM is trading on 11x forward earnings and a forward dividend yield of almost 6%.
Chinese energy importers are considering force majeure declarations as the short-term demand for energy is impacted by recent events.
A combination of weaker demand and lower prices sets up an opportunity for investors. Our preference is ORG & BHP and investors should average into any exposure by controlling the position size.
It’s still possible that a second wave of Coronavirus impact may materialize and markets may once again be under pressure.
Commonwealth Bank is priced for a strong result on February 12, so the potential for disappointment is high. The stock remains under Algo Engine sell conditions and despite the prospect of a $2.5bn on market share buy-back, we remain on the short side of the stock.
CBA has re-rated to a P/E multiple of 17x and a dividend yield of 5%.
Computershare is under Algo Engine sell conditions.
CPU trades on 20x PE and a 2.6% dividend yield with a backdrop of falling earnings growth. We expect EPS growth to trend towards “flat” numbers at best.
Our valuation forecast is for CPU to find support at or near $14.50.
Transurban is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
We see upside in TCL to $16, at which time investors should consider selling out-of-the-money call options to enhance the income return.
For more information on the derivative strategy, please call our office on 1300 614 002.
2020
Origin Energy is under Algo Engine buy conditions and has now been added to our ASX 100 model portfolio.
We see price support between $8 – $8.25 and we expect the short term momentum indicators to turn higher as the buying pressure builds.
ORG goes ex-div $0.10 on the 1st March.
Virgin Money Uk has been on our radar following the merger and rebranding that took place last year.
Virgin Money is investing heavily in technology and executing well on the merger of the old Clydesdale Bank with the Virgin Money business. Analysts are forecasting 10%+ in profit growth for 2021 and the current 8x PE is un-demanding.
The dividend yield is 3% based on 2020 earnings and likely to increase into 2021.
We see price support at $3.20
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