BHP – 5% plus dividend yield

Posted on | by Leon Hinde

In FY18,  BHP will produce US$46 billion  in revenue and generate EBIT of US$16 billion, which will support a dividend yield of 5%+

If we look out into FY19 and assume moderate growth achieved through higher energy prices and disciplined cost control, it’s likely BHP will increase the dividend to US$1.40.  This will then place the stock on a forward yield of 5.4%.

BHP goes ex-div US$0.60 on the 7th of September. Adding a $34.01 (Euro) call option into October,  boosts the cash flow by a further $1.25 per share.

 

ALGO Sell Signal For Amcor

Posted on | by Todd

Our ALGO engine triggered a sell signal for AMC into the ASX close at $14.60.

The “lower high”pattern is referenced to the $14.76 high posted on February 8th.

Since trading as low as $13.10 on May 4th, the share price has risen close to 12%. At this point, we suggest clients either take profits on open positions or use a covered call strategy.

For those interested in the covered calls, we suggest selling the $14.75 calls into October for 35 cents.

This will allow investors to receive the 30 cent dividend on September 4th while increasing cash flow into the portfolio.

Amcor

BOQ To Lift Key Lending Rates

Posted on | by Todd

BOQ has open the door for a full round of out-of-cycle rate hikes as the bank lifted its variable home loan rate and line of credit for both investors and owner-occupier loans.

Blaming rising funding costs, BOQ will raise both credit structures by 15 basis points effective July 2nd. 

With the RBA standing firm on rates until at least Q3 2019, we don’t expect BOQ to be the only  bank to snug rates higher on an out-of-cycle basis.

Our ALGO engine triggered a sell signal on BOQ on June 21st at $10.50. We maintain our negative outlook on the stock with a medium-term target near $9.40.

Bank of Queensland

Buy – BHP, STO, OSH and ORG

Posted on | by Leon Hinde

We continue to like the long side of the energy names.

BHP, STO, OSH and ORG are all current holdings within our model portfolio.

Enegy ETF OOO by Betashare was also a  recent Algo Engine buy signal. The price is now up 10% from the entry signal earlier this month.

 

Algo Update – James Hardie

Posted on | by Leon Hinde

Our Algo Engine recently generated a buy signal in James Hardie Industries and the stock was added to the ASX50 model.

While the Australian housing cycle is turning, JHX continues to grow above market through a combination of plant efficiencies and new new products. 

We remain “long” JHX whilst the share price holds above the $21.50 price level.

JHX goes ex-div $0.30 on the 12th of December. Adding a November $24 call option will enhance the income by a further $0.60 per share.

James Hardie

 

ALGO Buy Signal For South 32

Posted on | by Todd

Our ALGO engine triggered a buy signal for South 32 into yesterday’s ASX close at $3.61.

The “lower high” pattern is referenced to the low posted on April 12th at $3.34. The stock has been added to our ASX Top 20 portfolio.

The share price has dropped about 8% since announcing an all-cash offer to acquire the remaining 83% of Arizona mining; a Canadian resource company which they own 17%.

The transaction does not need Canadian regulatory approval and should begin showing profits in the zinc and copper area by the September quarter.

We see solid support in the $3.40 area with an upside target in around $4.15 over the medium-term.

South 32

 

 

ALGO Update: Stay Long Northern Star Resources

Posted on | by Todd

Our ALGO engine triggered a buy signal on NST on May 24th at $6.16.

At the time, we referred to the company’s recent production forecast of 600,000 ounces of Gold for 2018 as a net positive.

However, a recent research note from UBS has upgraded their production to 690,000 ounces and set a 12-month target on the stock at $7.50.

Considering the recent weakness in Spot Gold, we expect NST to continue to trade higher as the Spot market improves. Northern Star

 

Oil prices surge 5%

Posted on | by Leon Hinde

Oil prices surged as much as 5 percent on Friday as OPEC agreed a modest increase in output to compensate for losses in production at a time of rising global demand.

WTI crude futures finished Friday’s session up $3.04, or 4.6 percent, at $68.58 a barrel.

The jump in oil prices has helped support a rally in OOO, Betashares Oil ETF.

Our Algo Engine triggered a buy signal in OOO last week at $18.10 and today the ETF is trading at $19.15.

The rally in oil is also supporting STO, OSH & BHP, which are all current holdings within our ASX50 model portfolio.