Tag: ASX:AMC

Amcor looks oversold and we expect to see a rally back to $14.00 over the next 8 weeks.

Amcor announced a proposal to acquire Bemis in August, when the deal was valued at about $9 billion.

Bemis operates 56 packaging plants in 12 countries but most of its operations are in the USA; Amcor operates 195 packaging plants in 43 countries.

Amcor will shift its main share-market listing to the New York Stock Exchange in the all-scrip buyout, which would make it the world’s largest plastic packaging group.

It will ditch the ASX as its primary home, but still intends to give Australian shareholders exposure through Chess Depository Interests on the ASX.

We expect hedge funds to begin unwinding their short AMC long Bemis position which will create added buy-side demand into the market for AMC shares.

Amcor

Our ALGO engine triggered a sell signal for AMC on August 2nd at $15.25.

The share price reached a 3-month low of $13.62 in early trade today and is entering into an oversold chart pattern.

Despite the recent uncertainty of trade friction between the US and China, we believe the outlook for the paper and packaging sector will remain stable and input costs will continue to drift lower.

We see technical support in the $13.35 area and would not be surprised to see a ALGO buy signal above $13.00.

Amcor

Amcor reported FY18 earnings in-line with market expectations. NPAT came in at US$724 millon.

AMC’s earnings headwinds have continued for longer than expected and will likely carry into FY19.

We expect the acquisition/merger with Bemis, (US listed competitor), to  close in the new year and then synergy cost savings should help deliver a re-rating of the share price.

We see Amcor as good long term value although recognise that we are not under current algo buy conditions.

Amcor goes ex-div $0.32 o the 7th September.

Amcor

Shares of Amcor are down over 4.5% in early trade as the market digests the $7 billion (all script) takeover of US packaging peer, Bemis Company.

Logistically, the takeover bid maker sense since 85% of AMC’s revenue is from the US, Europe and the Middle East.

Along those same lines, a large proportion of AMC’s share registry is made up of international investors, which suggests the company will eventually de-list on the ASX to join the NYSE.

Monday’s announcement was not a surprise as the company has disclosed that they were in negotiations with Bemis for over a year.

Amcor

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

Amcor was added to the ASX 20 index this week, replacing AMP.

As an analysis of AMC, we  feel the current share price is trading in line with fair value, based upon FY19 EPS.  Assuming growth of around 6%, places the stock on a forward yield of 4.6%

With Amcor being a beneficiary of a weaker AUD, (95% of sales outside Australia), we see limited downside risks and recommend accumulating the stock.

Amcor goes ex-div $0.30 on the 4th of September.

Shares of AMC have opened over 1% higher at $13.90 as the stock continues to recover from the May 4th spike low near $13.10.

The technical picture improved last week with internal momentum indicators now pointing higher on the daily price charts.

We see the $13.70 level as good support with an upside target in the $14.40 to $14.50 area.

AMC has been in our ASX Top 50 portfolio since July of last year, and is a good candidate for a Buy/Write strategy into the 30 cent dividend on September 4th. 

Amcor

Amcor provides a defensive income opportunity through buying the stock and selling a $14.26 (Euro) Dec call option.

The option generates an additional $0.42 of income, whilst remaining exposed to the $0.30 September dividend.

AMC