TWE 1H19 earnings met market consensus at $339m.
Earnings from American markets exceeded expectations, whilst Asia was slightly below the elevated guidance.
Overall the result looks okay with continued EPS growth in the 20 – 25% range.
Based on EPS growth into 2020, we have TWE on a 2.8% forward yield.
Tabcorp Holdings, (TAH), 1H19 result showed EBITDA at $360m and 1H NPAT at $132m. These numbers were slightly below consensus. There appears a willingness to reinvesting Lotteries’ based income, into the Wagering business to defend and grow market share.
Cost synergy savings from the Tatts merger was raised to $130-145m, which should help to underpin the stock.
Tabcorp now trades on a forward yield of 5% and we expect EPS growth to track in the 5 – 6% range. We note the recent Algo Engine sell signal going into yesterday’s earnings release.
CWY was on our high conviction list and the stock has jumped over 10% today following the 1H19 earnings announcement.
The result was ahead of market consensus with underlying net profit after tax of $67m. Revenue growth was up 9% on the same time last year.
The company lifted net profit after tax by 35% for the first half FY19 on the back of organic growth and the acquisition of rival Tox Free.
Based on FY19 earnings we have CWY trading on a 1.8% dividend yield.
Incitec Pivot, (IPL) is under Algo Engine buy conditions and despite the earnings impact from the North Queensland floods, we see value for patient investors.
Heavy rainfall in North Queensland has resulted in the shutdown of Incitec Pivot’s Phosphate Hill plant, (closure of the rail line between Townsville and Phosphate Hill).
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Bendigo reported earnings slightly below market consensus.
1H19 cash profit came in at $220m, however, we continue to see challenging conditions for the regional banks.
BEN and BOQ both display lower high formations and are under Algo Engine sell signals.
Downer EDI recently moved into Algo Engine sell conditions after forming a new lower high at $7.50.
Downer reported 1H FY19 revenue of $6.6bn, EBITDA of $413mn and underlying NPATA of A$146mn, up 11% on the same time last year. Full year FY19 earnings are likely to be around $330mn.
We will take another look at the buy-side of Downer on a pullback below $6.80.
AMC reported 1H19 sales of US$4.6bn, EBITDA of US$678mn and underlying NPAT of US$330mn.
These numbers reflect a relatively flat outcome, based on the same time last year. The key for growth will be the integration of the Bemis business and the $180mn in cost synergies.
Amcor should return to a 3 – 6% EPS growth environment from next year, this supports the 4.4% dividend yield.
This coming Monday, I will run a live Webinar at 12:30pm NSW time.
I will be reviewing my high conviction ASX buy and sell opportunities from the recent algo engine and model portfolio signals.
If you’re interested in attending, or watching the video replay at a later time, then please fill in this form to register.
In the following brief video we look at the large number of sell signals in the ASX market and how to protect the downside in your portfolio, whilst staying exposed to the upcoming dividends.
Using in-the-money European covered calls. For more information please call our office on 1300 614 002.
Amcor reports on Monday, we expect the earnings result to support the current share price rally. AMC has been a high conviction call, expressed on the blog and in the “Opportunities in Review webinar”.
Bendigo Bank, (BEN) reports on Monday, we’re cautious of this name and see the money being made on the short side.
Origin Energy (ORG) reports next Friday, we feel the LNG related income will surprise on the upside.
For more detail on the earnings season, register for Monday’s Opportunities in Review webinar.
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