Advisory

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Energy and Material stocks are set to benefit from US President Donald Trump and Chinese President Xi Jinping agreeing to temporarily halt the imposition of new tariffs, as they work towards negotiating a more permanent agreement.

BHP, WPL, S32, STO and OSH are our preferred holdings.

IZZ, (iShares China Large Cap ETF) is a current holding in our ETF model portfolio and following the positive outcome to the US China trade talks at the G20, we expect to see IZZ continue to trade higher.

Support is at $55 and we see room for a material push higher.

Our Algo Engine generated a recent buy signal in TWE and following the 30%  fall in the share price, (since August results), we now recommend accumulating the stock. 

The sell-off was largely based on  concerns of a weaker China
market.

TWE trades 19x FY20 earnings and 2.2% dividend yield. The market continues to expect 15 – 20% EPS growth over the coming years.

BHP, S32 and OSH are recent Algo Engine buy signals where price action is now finding support and trending higher.

It’s also worth drawing your attention to recent signals in Whitehaven Coal (WHC) and Alumina (AWC).

We identified the price gap at $5.25 in Santos and have been patiently waiting for the retracement. The share price made  a low of $5.45 and has now found buying support.

We now look to accumulate STO, OSH and WPL and we’ll also sell covered call options to enhance the return.

We recommend buying Healthscope following the share price retracing from the recent high and filling the technical price gap down to $2.10.

We continue to see long-term value in CYB following the recent share price correction.

Should CYB deliver on its original cost synergy targets, (following the Virgin Money acquisition), this implies a material potential uplift to the share price valuation.

FY19 forward dividend yield is now running at 4.5%.

Aristocrat Leisure reported a 30% increase in FY18  after tax earnings at A$730m.

The result was slightly below consensus and recent digital acquisitions were offset by lower than anticipated margins in the Americas.

The outlook commentary remains positive and FY19 EPS growth is forecast at 10%+. Aristocrat continues to invest for the future, with an additional $100m identified for digital acquisitions.

On a forward basis, we have ALL trading on a 2.2% yield into FY19 and we see price support at $22.50

Based on FY20 PE of 18x earnings we can justify an upside price target of $26.00

We recommend buying Downer EDI as the price action begins to find support at the 2018 low of $6.20.

The company recently reiterated their expectations for 13% EPS growth in the next 12 months.

James Hardie is a current holding in the ASX 100 model portfolio and is under  Algo Engine buy conditions.

In the last Opportunities in Review webinar we identified a series of “GARP” or growth at a reasonable price investment opportunities and JHX was one of those.

The share price is now finding buying interest and we recommend buying JHX with a stop below the recent pivot low.

There is a price gap at $19.50 which may get filled.