ALGO Update: Sell Ramsay Healthcare

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Our ALGO engine triggered a sell signal on RHC at the ASX close yesterday at $67.20.

On August 22nd, RHC posted an intraday high of $76.20 before falling close to 20% to $61.05 on September 21st.

While the price rebound over the last few weeks has given investors the chance to make some short-term profits, the medium-term outlook suggests more range-bound price action going forward.

RHC is currently trading at 23X FY18 earnings and a yield of 2.3%.

Ramsay Health Care

Amazon Surges After Q3 Earnings Report

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Shares of Amazon rose 12% in overnight trade and reached an all-time high of $1,105.58.

The E-commerce giant reported earnings per share of 52 cents compared to the street’s estimate of 3 cents per share.

The company pointed to the 42% year-on-year increase in its web services and a boost in sales from Whole Foods as key drivers for growth in the quarter.

Interestingly, with the share price over $1,100.00, the “Price to Earnings” ratio is now 246.25 to 1.

Amazon

MQG Sprints Higher On H1 Results

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Shares of Macquarie Group posted an all-time high at $98.28 in early trade on a solid half-yearly result and the announcement of a $1 billion share buyback scheme.

The bank’s net profit for the six months to September 30th was up 19% at $1.25 billion, while net operating income was up 3.4% to $5.4 billion.

A key driver of the report was a 17% rise in fees and commission income from their US debt capital markets business.

It’s expected that the bank’s full-year results will be inline with last year’s $2.2 billion result, which means second-half could be slightly lower.

The interim dividend was lifted by 15 cents to $2.05 per share, 45% franked.

From a technical perspective, the sharply higher open has left a $2.00 gap from yesterday’s high of $94.39 to today’s low at $96.53. Typically, price gaps are filled but we don’t expect that to happen during today’s session.

Macquarie Group

 

IPL – Earnings 14th of November. 

Posted on | by Leon Hinde | Leave a Comment on IPL – Earnings 14th of November. 

We forecast $400+ million  in reported profit for FY17, up from $350 million in FY16.

Global fertilizer prices continue to push higher and an improved demand/supply situation is helping to sustain the rally in IPL’s share price.

The stock is now close to full value and has rallied 20% since the Algo Engine buy signal back in July at $3.25.

IPL reports earnings on Tuesday the 14th of November.

IPL

Star Casino – Algo Buy Signal

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SGR has delivered a solid start to FY18. Completion of the upgrade project at  Sydney and Gold Coast resorts will be finished in early 2018, helping to drive earnings momentum through 2020.

We forecast FY18 EPS growth of +12%+, underlying EPS $0.29 and DPS $0.16 placing the stock on a forward yield of 3%.

SGR is likely to provide a number of trading opportunities. We see the current rally exhausting within the $5.70 to $6.00 range. We recommend taking profit within this range and waiting for a pullback to $5.50.

Longer-term holders may prefer to sell covered call options at or near $6.00 and hold the stock through to June 2018.

Star Group

 

 

 

Boeing And Qantas

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Shares of aerospace giant Boeing dropped more 3% after reporting lower revenue numbers in both its commercial aircraft and defense industry units.

The company’s EPS rose to $2.72 per share compared to expectations of $2.66, and revenue was announced at $24.3 billion versus expectations of $23.9 billion.

Boeing also announced that they paid over $2.5 billion to repurchase 11 million shares, which leaves $6.5 billion in its buyback program.

Based on the daily charts, the next relevant support level is near $205.00.

Keeping with the aviation theme, shares of QAN opened 6% lower after CEO Alan Joyce warned that Q2 revenue is likely to slow compared to Q2 last year.

After posting a low of $5.94, shares have rebounded as the details of the current report are supporting new buying.

The company said underlying profits before tax were close to $900 million, and international revenue rose .2% compared to a 6.9% loss in the year-ago quarter.

We had an ALGO engine buy signal on QAN on July 24th at $5.25. We consider QAN a “hold” at these levels and see resistance in the $6.75 area.

Boeing

 

QANTAS

ANZ Drops On Guidance Warning

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Despite meeting the street’s expectations on top line profits and earnings, shares of ANZ are down over 1% to $30.00.

The bank’s chief executive, Shayne Elliott, warned that forward revenue growth in the banking industry will be constrained due to increased regulation and the banking tax.

Net profit was announced at $6.4 billion, which was up from $5.7 billion over the previous year. Cash earnings rose 18% to $6.9 billion, which was inline with expectations and the full-year dividend was unchanged at $1.60 per share.

From a technical perspective, ANZ has traded as high as $32.40 in January before slipping to $27.35 in early June. Within the measure of a “lower high” pattern, we consider the recent bounce to $30.80 to be corrective in nature and not a reversal of trend.

We see the next key chart point near the October 5th low of $29.05.

ANZ

 

Wesfarmers Weaker After Q1 Report

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In their quarterly report released today, Wesfarmers announced that sales growth in their food and liquor area continues to disappoint.

The owner of Coles reported that food and liquor sales grew by only 0.4% in Q1 2018, which is down from last year’s 1.8% gain. In addition, lower fuel sales has also slowed convenience store sales growth.

On a brighter note, the report showed continued strong performance from its Bunnings, Kmart and Officeworks chains.

Bunnings total sales growth was 11.7%, Kmart lifted 4.9% and sales at Officeworks rose by 7.8%

Shares of WES are down over 2% to 41.80 in early trade. We see the next key support level in the low $40.00 range.

Wesfarmers

 

Sector Update: Gaming Stocks

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Australian Gaming stocks look set to move higher on increased seasonal interest and improved market conditions.

The three names we prefer in the gaming sector are: TAH, SGR and CWN.

Our ALGO engine triggered a buy signal in CWN on September 28th at $11.10. The company has gotten some bad press relating to machine tampering, but has rebounded as the accusations are being dismissed as “political fanfare.”

Our medium-term target on CWN is $12.75.

Shares of TAH have been firming off the $4.00 support area as the long-awaited merger with TTS enters the home stretch.

It’s widely believed that the government would like to consolidate corporate bookmaking and this merger would achieve that goal.

Our medium-term target for TAH is $5.25.

SGR is more of a technical play. After breaking out of a “triple top” pattern at $5.30 yesterday, the share price now has a upside measured target of $6.00.

Crown

TabCorp

Star Entertainment