GPT.ASX reported first half earnings of $270m or $0.15 per share. This reflects 6% growth on the same time last year. Retail and office rent growth was okay, yet the logistics rental growth was flat.
FY17 EPS growth should remain in the 5 – 6% range, placing the stock on a forward yield of 4.4% based on $0.24 dividends per share (DPS).
We like this name as a buy write.
AZJ reported FY16 EBIT of $870 (down 10%). AZJ has a challenging outlook on the revenue front (9% decline to $3.45b) and their 100% payout ratio means that dividends are likely to be cut in the near future. The company remains focused on cost cutting and $130m in savings were achieved in the past 12 months, helping to reduce the impact of softer haulage volumes.
FY16 NPAT of $510m (down 16%) was impacted by higher interest expenses. Dividends per share (DPS) of $0.24.
FY17 EBIT guidance of $900m.
We’ve been on the short side of this trade and we now look to lock in profits.
The US Dollar ended last week mixed as Friday’s Retails Sales and Inflation data disappointed to the downside. This saw the Greenback offered across the G-7 pairs at the NY open. However, the unexpected drop of .1% in consumer spending along with the -.4% reading in the Producer Price Index were shaken off by the NY close setting up some interesting chart patterns as we start the new week.
The AUD/USD, in particular, looks vulnerable to further downside range extension. After posting a .7755 high on Thursday, the AUD/USD finished the week with two consecutive losses for the fist time in almost two months and the first close below the five-day moving average since July 25th. Technically, the pair has been in a strong uptrend over the last three weeks but the RSI, along with the MACDs, are looking stretched.
With Tuesday’s RBA minutes likely to include a warning about the risks of currency appreciation derailing the sluggish post-mining economic recovery, a break of the key support level at .7630 is a reasonable bet. Further, the preliminary forecasts for Thursday’s Australian Employment report are looking for a softer reading in the key metrics in what has become a volatile data series.
TWE.ASX is a buy at $9.30 and we’re building an exposure coming into the upcoming earnings result on Thursday. Looking for numbers that equal or exceed NPAT $230m and anticipating a dividend of $0.13
NAB.ASX reported 3Q16 cash profit of $1.6bn for the quarter, slightly below consensus forecasts with revenue down but offset by better than expected cost management.
FY17 dividends are expected to be around $1.70 placing the stock on a forward yield of 6.1%.
Navitas Limited (NVT.ASX) is an education services provider operating in multiple cities around the world. The stock trades on a PE of 21x and the FY17 forward dividend yield is 4%. The current pullback in price presents a buying opportunity. Look to establish an entry point this week with an average value close to $5.00.
AGL.ASX has now traded into our buy range between $18.50 and $19.00. Investors should look to establish an entry point and begin adding this back into portfolios.
At the end of last week, James Hardie (JHX.ASX) management provided FY17 NPAT guidance for $US260 – $290m which implies growth within our expected target range of 12 – 15%. These numbers reaffirm our buy on the dip strategy with JHX and FY17 EBITDA of US$500m, NPAT $275m, dividends per share (DPS) of US$0.45 places the stock on a forward yield of 2.8%.
In the lead up to the UK Referendum on June 23rd, many market commentators warned that a “Brexit” vote would have an acute and immediate impact on domestic UK assets in general, and on the price of the GBP/USD , specifically.
After posting an intraday low of 1.2800 on July 6th, the Sterling recovered over 5% to reach an intraday high of 1.3481 on July 15th, but only managed to hold on to the 1.3340 level on a closing basis; over 120 points below the high and the highest NY close since.
From a technical perspective, this week’s price action suggests the GBP/USD has completed a bearish pennant formation based on the break of the 1.3220 trend line last week and the failure of the pair to post a NY close above last week’s low close of 1.3020 on August 5th. Following this pattern, the next key support is found at 1.2820 followed by the 1985 low at 1.2750.
An interesting aspect of this this technical pattern is the correlation break and divergence between the Sterling and the FTSE 100 Index. The UK Equities markets rallied alongside the GBP from early July on a combination of “time-lagged” UK economic data and expectations of further stimulus from the Bank of England (BoE).
However, since mid-July, several key UK growth aggregates have softened or offered little in terms of positive forward guidance. As a result, the GBP/USD and the FTSE 100 have diverged with the index posting its highest close of 2016 at 6902.00 today, and the GBP/USD picking up momentum to the downside. It’s reasonable to expect that if this recent trend continues, investors hedging out currency exposure on rising UK equity prices could add to the downside pressure on the Sterling.
Yesterday’s UK Housing Survey illustrates how the Brexit impact may be finally working its way into the overall UK economy. The GBP/USD was triggered lower as the RICS house pricing index slumped to 5% from 15% in June. This was the lowest reading in three years and underscores concerns about how heavily leveraged UK consumers are to housing, and the potential impact on retail spending if the property market continues to adjust lower.
Telstra (TLS.ASX) released its FY16 result with total income up 2.3% to $26.5bn and EBITDA down 3.9% to $10b, final dividend of $0.155 taking the full year dividend to $0.31 FY17 outlook is for 5% income growth and 3 – 5% EBITDA growth. Capital management of $1.5bn in the form of a share buyback will be welcomed by investors.
We have been buyers of Telstra since the $5.20 low in June and again on this pullback it’s worth looking for an entry point.
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