We remain cautious on the banks and feel the trough in the share price may be two to three months out from now, at which point a good long-term buy opportunity will be in place.
Short term we continue to watch CBA track below the downsloping resistance.
James Hardie Industries is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
JHX will report FY20 earnings tomorrow and previous guidance of $350m to $355m was provided on the 5th May.
The weak demand environment ahead for new residential construction will likely weigh on earnings. The fall in the share price from $33 to $21 allows for these headwinds and a discounted valuation argument builds for both JHX and BLD.
Note: James Hardie has suspended the payment of dividends.
Monday’s webinar will begin at 7pm NSW Time. Use the registration link below to not miss out.
Rio Tinto is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
Iron Ore prices have held up well in the recent market sell-off, with spot prices remaining around USD$80 p/t.
Buy RIO at current levels.
Newcrest Mining has moved to bolster their balance after raising $1.1bn which will be used for growth.
Newcrest’s balance sheet is in good shape with over $1.5bn in cash and about the same in undrawn facilities. Gearing remains low at 15%.
NCM has now rallied to $30+ and we will consider taking profit within the $31 – $32 price range.
We expect investor sentiment to improve towards Caltex and consider the current price range as an opportunity to accumulate the stock.
Buy CTX at $24 and look for a move back to $26.50
Commonwealth Bank of Australia – unaudited cash profit fell 23% in the three months ended March 31 to $1.3 billion from $1.7 billion in the year-earlier.
CBA has provisioned $1.5 billion for COVID-19 provisions.
The below graph provides a picture of the trend that short-term traders may be interested in.
Computershare is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
We see buying support at $11.00.
Incitec Pivot is under Algo Engine sell conditions.
IPL is raising A$600mn via an underwritten placement and A$75mn via a share purchase plan at a 9% discount to the closing price on 8 May.
IPL’s capital raising is likely to be a positive near-term catalyst as a result of removing the funding risk. Although, we expect downward pressure on commodities to make the near-term operating conditions difficult for both IPL and ORI.
If you missed last night’s webinar, then the replay video is available below.
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