TABCORP Holdings has been added into the ASX 100 Model Portfolio following the recent Algo Engine buy signal.
We see buying support building for Tabcorp at $4.45.
TAH goes ex dividend on the 15th of August for $0.10. Adding a Dec $4.80 call option will generate an additional $0.14 per share of income.
For more information on the covered call strategy, please call our office on 1300 614 002.
Brambles is under Algo Engine sell conditions and we’ll review the FY19 earnings result with interest when announced on the 21st of August.
Earnings are likely to come in below the “moderate growth” expectations. We think the number will be flat to negative. Downside risks to the share price are underpinned by the share buyback which will recommence, post the earnings result.
Based on FY20 earnings we have BXB trading on a forward yield of 2.5%.
China steel demand continues to perform far beyond market expectations and continued strength in iron ore pricing via stimulus of construction activity in China, may underpin higher prices.
Our base case is that iron ore pricing is approaching a turning point with momentum in China port inventory drawdowns slowing and supply continuing to recover.
The net effect on RIO will be the lack of near-term growth, will make it difficult for the company to offset commodity price-driven earnings decline.
RIO remains under Algo Engine sell conditions and we’ll revisit the buy-side later this year when we see the next Algo buy signal.
Scentre is under Algo Engine buy conditions and is a current holding in the ASX 100 model portfolio.
SCG goes ex-div $0.11 on the 14th of August.
Low global bond yields and the announced share buy back by SCG, will help underpin downside risks. We see value emerging, following the recent correction from $4.15 to Monday’s low at $3.84.
Downer EDI is now under Algo Engine buy conditions and was added into our ASX 100 model portfolio.
We are comfortable with DOW’s broader business, given the track record of earnings delivery. The recent issues DOW encountered within the solar and engineering projects were absorbed within FY19 guidance.
FY 20 earnings should deliver 8% EPS growth, which places the stock on a forward yield of 4.5%.
Downer EDI offers value within the $6.75 – $7.00 range.
Amcor is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
The stock made a high last week at $16.75 and has since corrected back to $15.50. Investors should add AMC to their watchlist and we suggest looking for an entry level once the short term indicators turn positive.
Flight Centre Travel Group is under Algo Engine buy conditions and is a current holding in the ASX 100 model.
It is, however, in negative returns. We hold 38 stocks in the ASX100 model, with only two names showing negative returns. AGL down 1.15% and FLT down 17%. Otherwise, all holdings are performing positively.
So, can FLT recover from here? Flight Centre is on track to deliver within the FY19 guidance range of $335-360mn in earnings before tax. This places the stock on 18x earnings and 3.8% yield.
We see technical support at sub $40 and are sellers into the high $40 price range.
Woodside Petroleum is a current holding in our ASX 100 model portfolio.
We see a new entry opportunity approaching in WPL and investors should watch the short- term indicators for a turn higher.
WPL has greater yield support versus STO and OSH.
The S&P500 and Dow Jones indices are under sell conditions and we’ve now had a close below the first of the short-term momentum indicators in both indices.
The NASDAQ shows greater relative strength and remains under buy conditions, although we’re beginning to see deterioration in some of the market “favorites” such as Netflix, Tesla & Nvidia.
BHP Group is trading near fair value and investors should consider selling $42.18 Euro call options into Sept, to add to the cash flow returns.
The highlight of the June quarter production update was petroleum volumes outpacing estimates. Iron ore and copper were in line, while coal disappointed.
FY20 revenue is forecast to be $46bn and net profit $12bn, supporting a 5.5% yield.
The surging iron ore prices creates the potential for BHP to announce a special dividend when it reports its full year result next month.
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