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.
Annsell
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.
Ansell
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.
Ansell
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.
Ansell
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.
Ansell
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.
Ansell
Since posting an intra-day low of $20.30 on August 15th, shares of Ansell have traded 12% higher to reach $22.81 in early ASX trade today.
The August low coincided with their FY17 earnings report. Part of that report focused on the level of earnings based in USD and how an stronger AUD could dampen results.
The AUD/USD has now dropped over 5% since trading at .8125 on September 8th. As a result, ANN shares have pushed higher.
We currently see ANN trading at 18X earnings and estimate FY18 EPS around USD .95 cents.
As such, we consider ANN a good buy/write strategy up to $23.50 to increase cash flow and enhance portfolio returns.
Ansell
FY17 results for ANN were mixed with revenue growth of 2- 3 %. Cash conversion was strong and lower capex supported the dividend.
With this report, it’s difficult to draw any clear comparisons to past results as added expenses and divestment of businesses segments renders historical divisional comparison meaningless.
We view FY18 guidance as conservative and see the 3% forward yield as an attractive risk reward proposition.
A streamlined operation and moderating raw material costs should see Ansell’s share price trade higher over the next 12 -24 months.
At the start of the year, the market consensus was for the Aussie Dollar to fall against the major currency pairs during 2017. So far this year, the AUD/USD has climbed 10% and almost touched .8000 last week.
At 1pm today, RBA chief Philip Lowe will be giving a speech in Sydney. Since many exporters look at .8000 as a pain level, it’s reasonable to expect Mr Lowe to comment about the level of the Aussie.
The strengthening AUD/USD has created a headwind for domestic companies with earnings exposed to the softening USD.
Four companies that we follow which have seen their share prices dampened due to a stronger Aussie are: BXB, CPU, ANN and JHX.
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