We’ve been advising our readers to buy Tabcorp following the Algo Engine buy signal at $4.20. Although TAH is now trading $4.52, we continue to recommend the stock.
Our upside price target is $5.20 over the medium-term.
Tabcorp
After falling 10% from the January highs, the leading US indices are again exhibiting strong technical momentum, largely supported by bullish earnings outlook and PE expansion for the large technology names.
In Saturday’s post, we looked at the “higher low” formation in the Dow Jones and the need to stay long the index whilst the low of 24,247 remains in place.
We now include an up trending support line and re-affirm the long side positioning, with a trailing stop loss below the up trending support.
Shares of ANZ will likely remain under pressure as the ACCC has broadened the charges related to the bank’s 2015 capital raising.
In addition to two other ANZ staff, executives from Citigroup and Deutsche Bank have also been charged with criminal cartel offences.
Our ALGO engine triggered a sell signal on ANZ at $28.15 on May 11th.
We see chart resistance near $26.95 and the next downside support area at $25.80.
ANZ
Our Algo Engine recently generated a buy signal in CIMIC and the stock is held in our ASX 50 model portfolio.
We recommend buying CIMIC within the $38 – $41 range, with an upside target to $52.
Shares of NCM are over 1.5% higher to $21.40 in early trade after a Citi Research report upgraded the stock to “BUY” and raised their 12-month target price to $25.80 per share.
The report focused on the share price relative to the replacement costs of the assets, which suggests that NCM may end up as a takeover target for a larger mining company looking for Australian assets.
Considering that the performance of Spot Gold has been tepid over the last month, local gold mining shares have been well bid.
At current levels, we prefer adding to long positions in NCM and NST.
Newcrest
Northern Star
Much of the recent reporting on TAH has been focused on the growth in wagering revenues, in general, and the potential boost during the soccer world cup, specifically.
However, a recent report has shed light on the revenue contributions from the Tatts Lotto side of the business. With pool growth expected to rise 4.1% over the remainder of 2018, we see this as a net positive for the share price.
At the current price of $4.50, TAH is trading at 15.2 X earnings and 22% below the target price of $5.50 per share.
Our ALGO engine triggered a buy signal for TAH on April 4th at $4.22 and the stock was added to our model portfolio on February 12th at $4.52.
Tabcorp
Clydesdale & Yorkshire Bank was spun-off by National Australia Bank in 2016 and has since become a leaner-meaner banking machine. CYB is further bulking up through the acquisition of Virgin Money in the UK.
Overnight CYB announced a 7% increase to its preliminary offer to acquire Virgin Money, and extend the final bid deadline to the 18th June.
Whilst a key to holding CYB long-term is the impact of Brexit-related
macro-economic risks, we see scope for a rally back to $6.00 following the take-over.
Our Algo Engine generated a buy signal recently in IPL and the stock is currently held in the ASX top 50 model.
The stock price has pulled back to form a “higher low” at $3.30 and we see forward earnings surprising to the upside, due to the finalization of the Gibson Island gas agreements and the recent recovery in global nitrogen prices.
IPL is also set to recommence a $300m share buyback.
Our Algo Engine triggered a sell signal in Mirvac at the recent “lower high” formation.
We note the difficulties residential REITs are likely to face in a falling house price environment. Tighter credit conditions will impact Mirvac’s core customer, the investor.
Resistance within the $2.30 – $2.45 range.
Shares of CBA have opened over 2% higher to reach $70.35 in early trade.
Before the open, CBA announced that the bank had settled on the alleged money laundering charges for $700 million.
This amount is not quite twice the $375 million amount the bank earmarked for the potential penalty, but well below some of the early estimates which were over the $1 billion mark.
And while settling these allegations is a positive result for CBA, we still believe the share price has more downside risk than upside potential.
Our ALGO engine triggered a sell signal for CBA at $80.32 in November last year. We see the next significant support level near $68.50.
CBA
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