Domino’s Pizza Enterprises is under Algo Engine sell conditions and is a current “high conviction” short.
A combination of underperforming international stores and an eroding position within technological leadership across fast food means we struggle with the 30x PE multiple and low 2.5% yield.
Within 2 – 5 years we forecast the business trades at 14x earnings and 4% yield, meaning the fair value is closer to $20, not the current price of $52.
Incitec Pivot was triggered as an Algo Engine buy signal on Thursday 21st November. With an improving outlook for earnings in FY20 & 21 we’re willing to take a closer look at the upside potential.
The short-term technical indicators are about to turn positive and we’re likely to see buying interest pick-up near the $3.20 support level.
We’ll revisit this opportunity as the entry conditions playout next week.
Iluka Resources is under Algo Engine sell conditions and we’re watching the price action for selling pressure to build near the $10 level.
ILU is now on our radar as a potential short.
Telstra Corporation is under Algo Engine buy conditions and has now been added into the ASX 100 model portfolio.
We see price support developing near the $3.50 price level.
Magellan Financial Group is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
Following a sell-off that started in late July, MFG has now corrected 20% and we see buying support building near the $48 – $50 price level.
Brambles is under Algo Engine buy conditions and the stock has now been added to our ASX 100 model portfolio.
The share price will gain support from the share buyback, plus the $300mn capital return.
Buy BXB
Rio Tinto is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
We expect to see buying interest pick up near the current $93 price level.
Amcor reaffirmed their guidance for 5 – 10% EPS growth and US$160mn in cost synergies over the next 3 years from the Bemis acquisition.
Half of the forecast EPS growth is being achieved through cost savings, so the underlying business remains at low single-digit growth. The Q1 update removes medium-term downside risks and with the stock offering a 4.8% yield, we expect support to build at $14.50.
Saracen Minerals has agreed to buy a 32% stake in the Super Pit gold mine in Kalgoorlie and is raising $796 million to fund the acquisition. New shares were being offered at $2.95 each.
The raising was split into a $369 million placement and $427 million rights issue.
Computershare is under Algo Engine sell conditions and has been forming a series of lower high patterns since topping at $20.50 in September last year.
We continue to view the market’s assessment of the future earnings growth picture, as misguided. The factors that have lead to the recovery in earnings are transitory and the 20X PE and 2.5% yield, makes CPU too rich for our liking.
Short CPU $17.00
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