CIMIC Group – Exit Cost From the Middle East

Posted on | by Leon Hinde

 ASX:CIM will take a one-off impact of ~$1.8b in FY19 from the impairment of the entire BICC division. This represents all of CIM’s exposure in relation to BICC, including shareholder loans and financial guarantees.

FY19 underlying NPAT is expected to be $800m, excluding the impact from the BICC writedown. The company will suspend its next dividend payment which saves around $270mn.

CIMIC’s middle east exposure has been a negative overhang for the past 10 years and we see this step as an important de-risking outcome for investors. Going forward, CIMIC will focus on Australia, New Zealand, and Asian business opportunities. We remain bullish on the macro trends supporting the infrastructure sector.

 

 

Qantas – Algo Buy Signal

Posted on | by Leon Hinde

Qantas Airways is under Algo Engine buy conditions and is now a current holding in our ASX 100 model.

The switch from sell to buy conditions means the stock has automatically been added, however, traders may wish to watch the shorter-term indicators for confirmation of the change in trend.

The below graph highlights the key trend signals to watch and we forecast buying support to build near the $6.50 level.

 

 

 

Pro Medicus – Algo Buy Signal

Posted on | by Leon Hinde

Pro Medicus is under Algo Engine buy conditions and we add this one to our watchlist. With the stock trading on almost 100x PE, it’s expensive even after the share price correction from $38 to $22.

Short covering is likely to occur soon and it’s worth watching the short-term indicators for a reversal higher.

About: Pro Medicus are a leading provider of radiology information systems (RIS), Picture Archiving and Communication Systems (PACS) and advanced visualization solutions across the globe.

Buy range $22.50 – $23.50

Since writing the above post on the 9th of Jan, PME has rallied almost 20%.

The Algo Engine suggests it’s time to take profit. 

 

 

QBE – 20% Rally

Posted on | by Leon Hinde

QBE Insurance Group was discussed in the “opportunities in review” webinar earlier this month. We expressed the view that $12.00 provided support and our bullish call on QBE is now playing out. The stock has rallied from $12.00 to $13.20 and we see further upside to $14.00.

The above text was last updated on the 16th of Dec and QBE has now hit our $14 price target.

 

NIB Holdings – Value Emerging

Posted on | by Leon Hinde

NIB Holdings is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

With the stock now trading at $6.35, we see value emerging heading into the February earnings result. The company has guided towards 6% EPS growth and now trades on a 4% dividend yield.

Note: We’re mindful of the price gap back to $6.00, but we’re assuming this may not get filled at this stage.