Star Entertainment – Switches to Buy Conditions

Posted on | by Leon Hinde

The Star Entertainment Group is now under Algo Engine buy conditions following a recent high low formation at $4.55.

We’re attracted to the longer-term fundamentals for Star but have been reluctant to hold the position whilst the stock was under sell conditions. The recent break higher in price and the shift to Algo buy conditions, means we’ve added Star back into our model portfolio.

The February earnings result will be a key catalyst, where the market will be looking for earnings growth beyond just cost control.

 

 

Coles – Value is Approaching

Posted on | by Leon Hinde

Coles Group is under Algo Engine buy conditions following the August buy signal at $13.00.

Since then Coles has rallied to $16, supported by investor enthusiasm for the aggressive cost-cutting program.  As the stock price settles back we highlight the $14.50 level, as an area where value will again re-emerge.

Buy Coles within the $14.00 to $15.00 price range.

 

Treasury Wines – Sellers are in Control

Posted on | by Leon Hinde

Treasury Wine Estates is under Algo Engine sell conditions and we highlight the recent softness in US sales data as a concern.

Sales within Asia continue to offset the US related weakness, however, we expect the TWE share price to remain under pressure.

Based on FY20 & FY21 EPS growth remaining in the 10 – 15% range, we have TWE EBIT growing from $660mn in FY19 to $850mn in FY21. This supports a forward yield of 3%.

We’re not holding TWE in our portfolio at present and we prepared today’s post on TWE as a reminder of the opportunity that lies ahead when the stock switches to buy conditions. We expect to see this in the first quarter of the New Year.

Downside target $15.50 – $16.50