Alumina is now under Algo Engine sell conditions and we expect the share price to struggle below the $2.80 level.
Alumina prices are likely to weaken over the next 12 months which will weigh on the cash receipts from the AWAC joint venture.
2018 net profit after tax was reported at US$690m. AWC declared a total dividend for the year of US$0.227, which was ahead of market expectations.
Stay short AWC with a stop loss above the $2.80 resistance.
QBE Insurance Group is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
FY18 earnings were announced today and QBE delivered ahead of consensus. Growth was strong and upgrades to 2019 earnings are now likely.
Sonic Healthcare reported a 1H19 result that was in line with consensus expectations. Moderate single digit earnings continue to flow through from Australia, US and Germany.
FY20 forecasts are for 3 – 4% EPS growth. We consider the stock slightly expensive and look to buy on a the next pullback.
IPL is under Algo Engine buy conditions following the higher low formation at $3.20.
The stock price has been sold off following concerns around the impact of the Queensland floods. In particular, the short term closure of the Phosphate Hill plant and the impact to rail transport.
With the stock now trading 10x FY20 earnings we see much of the downside risks, already priced in.
Accumulate IPL between $3.00 and $3.20
Flight Centre Travel Group delivered 1H19 PBT of $140 million, at the low end of the 1H19 guidance range.
A positive of yesterday’s result was the announcement of a $150m capital return , declared through a $1.49 special dividend.
We see support for FLT at $42.50 and we’re inclined to take profit at $48.
Santos STO announced 2018 full year results with NPAT beating consensus.
FY18 NPAT of US$727m and the final dividend has increased to $0.062.
We expect to see Santos continue to increase their capital spending over the next 2 – 3 years with the focus being on the Cooper Basin.
Buying pressure will likely abate within equities, and oil prices over the coming weeks. We look to buy STO, WPL, OSH & ORG on the next technical low.
Wesfarmers WES 1H19 earnings beat market consensus, with EBIT of $1.62bn and underlying net profit increasing by 10% on the same time last year.
The company announced a special dividend of $1.00 per share.
Bunnings sales grow by 5% and underlying earnings in the division increased by 7%.
Wesfarmers trades on a fair valuation at 17x earnings and a 5.2% forward yield. The stock provides investors optionality around an acquisition given the groups’ strong balance sheet.
Some caution needs to be exercised, should we see a weaker retail environment in the coming months.
We’re buyers of WES on the next pullback.
Oceana Gold {OGC.ASX} has reported 2018 underlying EBITDA of US$364m and company cash reserves increased to US$108m.
After buying OGC at lower levels last week, we’ve now taken profit at $4.70+
Crown Resorts {CWN.ASX} reported 1H19 earnings and the result was negatively impacted by increased expense ratio and lower revenue from VIP turnover.
The A$400m buyback announced as at the FY18 result, has a further $270m to go.
CWN remains under Algo buy conditions and with the stock trading on a 5% forward yield and low single digit EPS growth, we continue to see value.
Oceanagold, (OGC), has recently been triggered as an Algo Engine buy signal, following the higher low formation at $4.20.
The company reports calendar year 2018 earnings on the 19th of Feb and the consensus forecast for NPAT sits around US$135mn, based on an all-in gold cost price of $900oz.
FY19 production guidance will be at 550k/oz
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