ALGO Sell Signal For Westpac

Posted on | by Todd

Our ALGO engine triggered a sell signal for WBC into the ASX close at $27.70.

This “lower high” pattern is referenced to the intraday high of $28.35 posted on September 28th.

WBC will go ex-dividend for 94 cents on Tuesday.

With round 7 of the Royal Commission scheduled to start on November 19th, we remain cautious of the price structures and forward margin growth of the domestic banks.

As such, we see scope for the local banking names to retest the October lows over the near-term.

Westpac

 

 

JHX Is In The Buy Zone

Posted on | by Todd

Shares of James Hardie have dropped over 17% in the last three trading sessions and posted a 2.5-year low of $16.60 in early trade today.

The catalyst for the sell off was that JHX’s 2Q EBIT and NPAT fell short of consensus forecasts and management downgraded full year NPAT by 5%.

In the bigger picture, the softening of Q2 margins due to input cost inflation looks to be transitory and the group is still expected to generate net profits of between US313 and US 335 million for FY 2019.

As such, we consider the recent drop in the share price as an opportunity to invest in a high quality business at a time when external factors are increasing input costs.

JHX is part of our ASX Top 50 portfolio and we see scope for a $20.00 initial price target over the medium-term.

James Hardie

 

Amcor – Rally Is Underway

Posted on | by Leon Hinde

Amcor has been a high conviction buy strategy based on the likelihood of hedge funds covering their short positions in the stock ahead of the Bemis takeover being finalised.

As illustrated on the chart below, the upside target for Amcor is $14.50+.

Amcor

CYB – Value Ahead Of Earnings Release

Posted on | by Leon Hinde

Look to accumulate CYB on any weakness near $4.70 ahead of their full year earnings release on the 20th of November.

Considering that CYB has most of its mortgage exposure in the UK, has an net interest margin of 220 basis points and is not being targeted by the Royal commission, we believe the stock is oversold.

CYB

Buy The Dip In Ansell

Posted on | by Leon Hinde

Our Algo Engine has triggered a buy signal in Ansell.  And with the share price finding support at $22.50, we recommend accumulating the stock.

Technically, the share price looks to be carving out a “double bottom” pattern dating back to September of last year at $22.10.

Our upside target is $24.50, at which time investors can consider either taking profit or selling slightly out of the money call options to enhance the income.

ANN goes ex div $0.30 in Feb 2019.

Ansell

 

Buy Downer EDI

Posted on | by Leon Hinde

During our Opportunities in Review webinar series, we’ve been suggesting Downer EDI as a buy at $6.75.

Downer EDI has confirmed 13% EPS growth for the year ahead, which should support a $7.50 to $8.00 initial price target.

Downer EDI

Buy IAG At Current Levels

Posted on | by Leon Hinde

In our Opportunities in Review webinar series, we’be been suggesting IAG as a buy below $7.00.

A recent broker note estimates that IAG will have a further $600 million to spend on shareholders, which could come in the form of a $300 million special dividend and $300 million share buyback.

Look for a rally to $7.50 and sell covered call options.

IAG

Investors Brace For CBA’s AGM Today

Posted on | by Todd

Since posting an intraday low of $65.60 on October 26th, shares of CBA have risen over 5% and reached $69.90 in early trade today.

Investors have cause to be pensive as the banking giant will hold its AGM in Brisbane today and round 7 of the bank Royal Commission will start on November 19th.

We see technical price resistance in the $70.25 area and initial support at $67.30.

Commonwealth Bank

 

 

 

Look For A Bounce In Tabcorp

Posted on | by Todd

It’s been estimated that over $250 million was wagered on yesterday’s Melbourne Cup.

It’s reasonable to believe that many punters would have placed bets using one of the TAH platforms.

TAH has been an enigma for investors over the last three months as the share price has traded in a narrow $4.50 to $5.00 price band.

It’s worth remembering that TAH reported a 71% jump in earnings in their last update and is currently priced at a 4.60% yield.

TAH is part of our ASX top 100 portfolio and we suggest accumulating shares at current levels for a move back over $5.25 over the medium-term

Tabcorp

BHP’s Rally Won’t Be Derailed

Posted on | by Todd

Shares of BHP have slid lower in early trade as the mining giant has suspended all iron ore operations in WA after a runaway train with 268 wagons had to be derailed.

We don’t see this as an impediment to the pace of exports out of Port Hedland or the $14 billion share buy back and special dividend program.

BHP has been on an ALGO buy signal since September 11th at $31.20.

We see good technical support in the $32.85 area and initial resistance just under $35.00.

BHP