Amcor strong share price movement suggests investors are
pricing in an earnings upgrade, but we think a significant EPS upgrade
is unlikely and investors should now take profit or sell covered calls.
Stock price is up 5% from the recent signal low.
GPT strong share price movement now captures the adjusted low bond yield picture and investors should take profit or sell covered calls.
Stock price is up 32% from the original signal low in October 2018.
Crown Resorts is under Algo Engine buy conditions and we’ve been highlighting the price gap in the charts back to $11.80.
Construction disruption at Star Sydney and weaker trends within VIP gaming resulted in an earnings downgrade to SGR. We don’t expect the slowdown to be as severe for Crown.
Buy CWN at $11.80
Amcor is now under Algo Engine buy conditions, following the higher low formation at $15.75.
Looking out to FY20 we have Amcor generating a combined revenue of $13.5bn, EBIT $1.65bn, delivering 8% EPS growth and trading on a 4.4% yield.
We see value at $15, however, with the defensive nature of the Amcor business, buying interest is likely to build closer to $15.50.
Altium is under current Algo Engine buy conditions and the positive price momentum and recent inclusion into the ASX 100 index, has us digging a little deeper into the fundamentals.
The stock trades at a lofty PE valuation of 56x forward earnings. However, the company has a strong track record of above average EPS growth. FY20 the market is looking for EPS to increase 20% from $0.41 to $0.50 cents per share. FY20 revenue is forecast to jump from $175m to $215m .
The stock currently trades on a dividend yield of 1%.
We’re comfortable to view this as a momentum play and remain long the stock whilst it trades above our $29 stop loss.
Coles Group has been a stand alone listed business since November 2018, after being spun-out of Wesfarmers.
The financial performance to date has been patchy at best and the recent Coles Strategy Day highlights were the confirmation of the dividend payout of 80-90% for FY19, (which translates to an estimated $0.55 per share or 4.1% yield) and the $1bn cost out program.
We forecast flat earnings and revenue growth into FY20 and suggest investors sell a covered call option to enhance the income return.
Bendigo and Adelaide Bank is now under Algo Engine sell conditions and we see resistance building near the $11.50 price range.
If you missed yesterday’s webinar, then you can watch it below.
AGL Energy is now under Algo Engine buy conditions, following the recent sell-off from $23 down to $20.50.
We recommend buying AGL and selling an out of the money call option to enhance the income return.
AGL goes ex-div $0.63 on the 22nd August.
For more information on the option strategy, please call our office on 1300 614 002.
Macquarie Group has sold off from $137 down to $114, following a software outlook for next year’s earnings.
Although it is unlikely they’ll deliver 17% EPS growth, it is probable that we’ll see growth within the 5 – 8% range, which will continue to ensure Macquarie Group’s shares remain attractive.
We have the stock trading on a 5% yield into FY20.
Text from a post last month…. Allowing for continued short-term selling in global markets, we suggest investors add MQG to their watch lists and look for the short term momentum indicators to reverse high within the $116 – $120 range.
We’re now at the point described above. MQG is trading at $114 and looks like buying interest will build near the current price level.
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