NCM’s Q4 Production Up 15%

Posted on | by Todd

Shares of Newcrest mining have spiked over 4.5% higher to reach $21.00 in early trade.

The catalyst for the move was the release of their Q4 production numbers.

The Gold miner reported their overall production rose 15% for the 3 months to June 30th from 551,000 ounces to just under 635.000 ounces.

This improved result places their full year production in the upper end of their expected 2.25 to 2.35 million ounces. All-in sustained costs were unchanged at $795 per ounce.

We see the next area of chart resistance for NCM near $21.55, with a longer-term target in the $24.25 area.

Newcrest Mining

 

 

James Hardie : A Buy/Write Strategy

Posted on | by Leon Hinde

Our Algo Engine generated a buy signal for JHX recently at $21.50.

With the US housing cycle remaining strong, (although weak numbers in June are the reason for some caution), and James Hardie having a dominant market position in fiber cement, we think the long term trajectory for earnings & margins are strong.

FY19 revenues should increase 20% and underlying EBIT will jump from $380m to $480m.

With the stock trading on a low 2.2% forward yield, we recommend adding a covered call option to enhance the income.

Selling the $23.50 October strike adds $0.50 per share of additional cash flow.

JHX goes ex div $0.30 on the 12th of December.

 

NCM Firms In Front Of Tomorrow’s Quarterly Report

Posted on | by Todd

Shares of Newcrest mining are consolidating near three-month lows in front of the release of their Quarterly production report tomorrow.

Our ALGO engine triggered a buy signal on NCM on Monday at $20.04 and the stock has been added to our ASX Top 50 model portfolio.

The recent slide in Spot Gold appears to be finding support around the $1200.00 area, which is a net positive for the stock.

We have a medium-term upside target for NCM in the $24.25 area.

Newcrest Mining

Buy The Dip In Evolution Mining

Posted on | by Todd

Our ALGO engine triggered a buy signal for Evolution Mining into yesterday’s ASX close at $2.92.

This “higher low” pattern is referenced to the intra-day low of $2.86 posted on June 19th.

A recent broker report suggests that EVN has several overseas mining assets on its acquisition  radar.

The report also showed that EVN’s cash balance increased over the last quarter by $115 million to $332 million, while the company’s net debt fell from $187 million to $71 million.

EVN was added to our ASX Top 100 Model portfolio on July 17th.

We see further support in the $2.80 area  and we have medium-term upside target of $3.70.

Evolution Mining

 

 

 

 

Buy RIO Ahead Of Earnings Results

Posted on | by Leon Hinde

Our Algo Engine triggered a buy signal recently in RIO at $79.00.

We retain our “buy” bias on RIO heading into the 1H earnings result on the 1st of August. Half year forecast net profit after tax is estimated at $4.6b 

The result will likely be ahead of analysts forecasts and the company should also announce an increase to their share buy-back program.

RIO goes ex-div $1.40 on the 10th August.

Rio Tinto

China – Cannons Are Firing

Posted on | by Leon Hinde

During times of conflict, there’s a saying in the market:  “you should buy when the cannons are firing and sell when the champagne corks are popping”.

More specifically, the current trade war between the US and China is likely to be resolved and the 20% correction in Chinese equity indexes may be looking overdone.

The IZZ iShares ETF provides exposure to large cap Chinese stocks. We see a buy side opportunity at $57.00

 

CIMIC – High Conviction Idea Delivers A 20% Return

Posted on | by Leon Hinde

From our Monday “opportunities in review” webinar, CIMIC was a high conviction buy idea heading into earnings season.

The strong share price reaction to last week’s 1H profit  announcement  sent CIMIC shares  20% higher.

The result came in ahead of analysts forecast with revenue growth and profit growth of more than 10%.

1H Revenue +11% to $6.9 billion, EBITDA of $794 million +11% and NPAT $363 million +12% and on the same time last year. 

Whilst the stock price now looks full value based on a forward yield of 3.3%, we continue to like the longer-term fundamentals.

Cimic Group

 

IAG – Opportunity Builds

Posted on | by Leon Hinde

Although we don’t have a current Algo Engine buy signal in IAG, the stock is in the ASX 50 model portfolio from the original higher low pattern in 2017.

The recent share price retracement, from $8.70 back to yesterday’s low of $7.84, means we have the stock on our radar again.

Strong earnings growth, 5% fully franked dividend yield and an increase to the share buy back program should provide a floor under the share price.

We see IAG as a solid “buy/write” opportunity delivering 10 – 12% annualised cash flow.

 

IAG

 

 

Stay Long Downer EDI

Posted on | by Todd

Our ALGO engine triggered a buy signal in Downer EDI on June 25th at $6.74.

Since then, the stock has reached an intra-day high of $7.30 on July 10th.

Recent broker notes have been bullish on the Engineering and Construction sector citing a high backlog of domestic infrastructure work.

The strong results for Cimic Group last week underscore this uptick in construction activity, in general.

More specifically, DOW got a lift last week after announcing it had won a 5-year support and maintenance contract with Chevron Australia.

We believe DOW is well placed to benefit from the dual tailwinds of increased infrastructure spending and a ramp up in capital spending from the mining sector.

DOW will report full-year results on August 16th. The forecast is for NPAT to increase to $295 million and the dividend per share to rise to 14.4 cents.

We see solid chart support in the $6.90 area and initial upside resistance just over $7.65.

Downer EDI

 

 

Has Spot Gold Found A Near-Term Low?

Posted on | by Todd

After reaching an intra-day high just under $1370.00 in mid-April, the price of Spot Gold has dropped over 12% and matched a 1-year low of $1210.00 last week.

The recent strength in the USD, weakness in the Yuan and uncertainty over global trade tariffs are some the reasons used to explain the slide in the yellow metal over the last 2 months.

What is clear is that the technical picture in Gold is deeply oversold and due for a material correction higher.

As illustrated in the chart below, the last 8 times that Gold fell more than $90.00 over a 3-month period, the rally that followed averaged close to $150.00, or just under 13%.

Despite the recent weakness in Spot Gold, local Gold miners have performed reasonable well and have expanded production both domestically and abroad.

Our ALGO engine is now showing buy signals for NCM, SBM, NST, OGC, SAR and EVN.  

In addition, NST, EVN and NCM are included in our ASX Top 100 model portfolio.

We currently see the $1235.00 area in Spot Gold as an inflexion point which could drive the price higher and would be a net positive for these local Gold names.