Crown Resorts & TabCorp

Posted on | by Leon Hinde | Leave a Comment on Crown Resorts & TabCorp

Crown Resorts reported their FY17 earnings on Friday, and the result showed a 13% decline in revenue and 11% fall in EBITDA. Helping to offset this was a further $375m share buyback.

Based on $0.60 of DPS in FY18, Crown trades on a forward yield of 4.8%.

Chart – CWN

TabCorp Holdings reported FY17 earnings on Friday with underlying net profit of $179m, down 4% on the same time last year.  We see encouraging trends within the core wagering business with digital turnover up 14% and fixed odds revenue growth of 15%.

We expect the Tatts merger  to be completed by the end of the year and with the FY18 dividend yield at 6%, we see upside potential to $4.50 – $5.00.

Chart – TAH

 

 

 

ETF Update: Has The Aussie Dollar Topped Out?

Posted on | by Todd | Leave a Comment on ETF Update: Has The Aussie Dollar Topped Out?

The Aussie Dollar posted a high on July 27th against the US Dollar at .8065.

It tested that level again just before the RBA announcement last Tuesday but failed to advance and slipped briefly below .7900 going into the weekend.

Comments in the RBA statement about the strength of the AUD/USD combined with a weaker Trade Balance report on Thursday pressured the pair lower.

A break of the .7875 level will confirm that a formidable top is in place, and will likely spur another cent correction lower to the next support price of .7780.

Investors looking to profit from the AUD/USD trading lower can look to buy the BetaShare ETF with the symbol: YANK.

YANK is an inverse ETF, which means the unit price increases as the price of the AUD/USD decreases. YANK also has a 2.5% weighting, which means a 1% change in the AUD/USD will correspond to a 2.5% move in the unit price.

The current price of YANK is $12.60. We calculate that when the AUD/USD trades back to the January low near .7300, the unit price will trade at $16.75.

BetaShare ETF: YANK

 

Algo Signal Update – GrainCorp

Posted on | by Leon Hinde | Leave a Comment on Algo Signal Update – GrainCorp

Our Algo Engine has been alerting us to the retracement and “higher low” pattern developing in GrainCorp.

The stock price bounced from oversold conditions in Thursday’s trading, after touching $8.51. Friday displayed strong follow through buying with the price action closing near session highs.

We’ve been looking for a move higher in GNC, it looks like it could be underway, and a rally back to $9.25 – $9.50 is our target.

Apply a stop loss below $8.51.

Chart – GNC

Invocare is another name we’re watching for confirmation on a developing “higher low” pattern. Friday’s closing price was a little weak. We’ll watch this name into next week and keep you updated on our analysis.

 

Chart – IVC

 

 

ALGO UPDATE: Buy Signal For InvoCare

Posted on | by Todd | Leave a Comment on ALGO UPDATE: Buy Signal For InvoCare

Our ALGO engine triggered a buy signal for Invocare (IVC) on yesterday’s ASX close at $13.60.

As Australia’s largest operator of funerals and cemeteries the share price has risen over 30% since trading at $10.50 in February 2016. IVC is currently trading with a dividend yield of 4.12%  and increased its half-year by 11.8% in it’s last report.

IVC is scheduled to report its latest half-yearly results on August 16th.

We consider IVC  a defensive stock as demographics point to a 3.3% potential growth rate for their industry.

The May 11th high of $15.50 is the reasonable target over the medium-term.

InvoCare

 

Suncorp – FY17 Earnings Fall Short of Expectations

Posted on | by Leon Hinde | Leave a Comment on Suncorp – FY17 Earnings Fall Short of Expectations

Suncorp announced earnings for FY17 which resulted in a sharp drop in the share price during yesterday’s session.

The group delivered NPAT of $1,075m up 3.6% on the same time last year. Suncorp also announced a final dividend of $0.40  taking the full year dividend to $0.73.

We’ve been warning about Suncorp in the monthly ASX 50 video reports and exited all Suncorp holdings 8 weeks back at $14.50 per share.  We remain cautious, as downside risks are increasing from higher costs and increased risk of higher BDD charges in the bank.

The previous point is not a unique issue to Suncorp, the pattern of higher expenses and under preforming loans will soon become more evident for all the banking names.

Chart – Suncorp

 

 

 

 

ETF UPDATE: When Will BBUS Take Off Again?

Posted on | by Todd | Leave a Comment on ETF UPDATE: When Will BBUS Take Off Again?

Since December of 2105, there have been three distinct periods of high volatility in the SP 500 which triggered sharp rallies in the BetaShare ETF with the symbol: BBUS.

BBUS is an inverse ETF, which means the share price will rise when the SP 500 trades lower. It’s also weighted, which means that a 1% move in the SP 500 Index will correspond to a 2.5% move in share price.

From December 17th, 2015 to January 19th, 2016, the SP 500 fell from 2077.50 to 1856.25.

This 10% sell off pushed the price of BBUS from $11.85 to $15.20, roughly a 28% gain.

As the chart below illustrates, over the course of 2016 there were two other periods when the BBUS saw  sharp moves higher of over 15%.

BBUS

The general point is that the listless drift continues for the SP 500, which hasn’t gained 1% or more in a single day for the last 70 trading sessions, the longest streak since 2007.

The price of BBUS is currently $6.70.