Ansellis a current holding in our ASX 100 model portfolio and we continue to see value as a “buy-write” strategy.
ANN goes ex-div $0.26 on the 16th of Feb. We suggest adding a $24 strike May call option. This will generate an additional $0.70 per share of income.
ANN reports half year 2019 profit on the 18th of Feb.
Our Algo Engine has triggered a buy signal in Ansell. And with the share price finding support at $22.50, we recommend accumulating the stock.
Technically, the share price looks to be carving out a “double bottom” pattern dating back to September of last year at $22.10.
Our upside target is $24.50, at which time investors can consider either taking profit or selling slightly out of the money call options to enhance the income.
ANN goes ex div $0.30 in Feb 2019.
In Monday’s webinar we looked at a number of high conviction ideas and positioned buy-side entry levels in oversold names.
The following stock codes are a reminder of companies that should have made it onto your watch lists:
ANN, LLC, AMC and IRE
Shares of ANN reached a 52-week low at $22.06 in early trade today.
This represents a 25.5% drop since the share price traded an intraday high at $29.65 on July 27th.
ANN is currently under ALGO Engine buy conditions from $24.80.
As illustrated in the chart below, the price has reached the value target near $22.00.
Our ALGO engine triggered a buy signal for ANN on August 27th at $25.06.
Since then the stock has range traded between $24.30 and $25.80.
Based on their recent disclosures, ANN has a healthy balance sheet, is planning to maintain earnings growth through acquisitions and has outlined plans for a USD600 million share buyback scheme.
We expect to get more clarity on these actions at their AGM on October 18th.
Technically, there is a price gap above the current market from $26.80. We believe this is a realistic price target in the lead up to the AGM.
Ansell has found short-term support at $24.70 during yesterday’s trade.
However, with the USD weakening overnight, we’re “on watch” for a break of this level.
We see a good buying opportunity, should the stock trade down to $23.50.
Keep ANN on your watch list.
We recommend accumulating Ansell within the 24.25 – $24.75 range.
The share price has reached oversold territory relative to the healthy rise in NPAT announced in its FY18 results.
Shares of ANN have dropped over 10% since reporting their full year results last week.
We see solid chart support in the $24.50 area and suggest buying in that range.
Based on the positive macro data, cost savings, benefits from US tax changes and the transformation program Ansell announced, we see upside to Ansell’s upcoming earnings result on the 12th February.
ANN currently trades at 17x 2019 earnings and a forward dividend yield of 2.7%.
We’re buyers on near-term weakness ahead of the upcoming earnings result.
Since trading down to $20.30 on September 15th, shares of ANN have rallied over 18% and are priced at $24.00 in early trade.
Even though we see organic growth tracking at the upper end of their 3% to 5% guidance, internal momentum indicators are now looking overbought.
ANN is currently trading at 18X earnings and we estimate the FY18 EPS around USD 95 cents.
Investors holding shares of ANN can look to either sell their shares outright, or sell the December $24.50 call option and collect 80 cents of premium to enhance cash flow.