Medibank – Entering A Value Range

Posted on | by Leon Hinde

Our Algo Engine generated a buy signal in MPL on Friday.

With the share price retracing from a $3.39 high, (formed in February), to close at $2.89, we now draw your attention to MPL as it enters our value range.

MPL’s earnings report last month showed the company is struggling to grow revenue and bottom line profit, therefore 2019 will likely show flat to no growth.

However, with the stock on a 4.4% yield and adding a covered call option, 10 – 12% annualized cash flow can be generated without too much downside risk.

Look to accumulate within the $2.80 – $2.90 range.

BBOZ – Profiting From A Falling Market

Posted on | by Leon Hinde

The XJO has now sold off 4% in the last 7 days and the index is back at the same level it was in June.

BBOZ is an inverse ETF with a 2x leverage, therefore, in approximate numbers, BBOZ has increased 8% over the same period.

BBOZ allows investors to hedge a portfolio of ASX 200 stocks in one ASX listed transaction.

BBOZ

Keep CIMIC On The Radar

Posted on | by Leon Hinde

CIMIC was a stand out  during the recent earnings season with growth coming in well above market consensus, supported by large infrastructure spending.

We expect 2 – 3 years of above trend growth in CIMIC and see the current weakness as an opportunity to accumulate the stock.

Our buy range is $48.50 to $47.50.

Also keep an eye on any weakness in the share price of Downer EDI, as a buy on the dip opportunity.

CIMIC

 

BHP Picks Up 6.1% Of SolGold

Posted on | by Todd

In a move to diversify its asset base, mining giant BHP has agreed to pay around $50 million for a 6.1% stake in SolGold, which operates a copper-gold project in the mineral-rich Cascacbel region of Ecuador.

Interestingly, one of BHP’s partners in the SolGold project will be Newcrest mining, which owns 14.5% of the mine and is the majority operator.

We take notice of the foresight of this purchase, along with other asset acquisitions by domestic mining names against the backdrop of falling raw materials and mineral prices.

We see solid chart support for BHP in the $30.60 area.

BHP

 

 

 

Crown – Buy On A Pullback

Posted on | by Leon Hinde

Should Crown retrace back to $13.50 – $13.75, we consider the entry range as good medium term value.

Crown next goes ex-div on 20th March 2019, so adding a covered call into December will help drive additional cash flow, whilst waiting for the next round of dividends.

Crown

Woolworths – Delivering 10% Cashflow

Posted on | by Leon Hinde

We recommend buying Woolworths and selling a March $29.01 European-style call option to enhance the yield.

Unlike American-style options, European-style options can only be exercised on the expiration date.

As such, the share price can trade through the strike price during the course of the option duration without being exercised.

The strategy delivers effectively 3 payments, September & March dividend, plus another $0.55 per share in option income.

Woolworths

 

Oil prices and stocks to watch

Posted on | by Leon Hinde

Oil prices remain well supported by recent platform closures in the Gulf of Mexico ahead of Hurricane Gordon, and Exxon’s warning of a supply crunch in Nigeria. 

We recommend buying the dip in Santos near the $6.50 level and also accumulating Origin on the current share price weakness.

OOO.ASX Oil ETF was added to our ETF model back in June and the ETF is now up 8.5%.

WPL and OSH look expensive at current levels and we’ll wait for the  next Algo Engine buy signal before considering these names.

STO