Coles – Buy
Coles Group is under Algo Engine buy conditions and the recent pullback to $15.00 provides an attractive entry-level.
With the stock trading on a forward dividend yield of 3.5%, we expect the share price to remain well supported.
Coles & Woolworths – Opportunity Approaches
After trading out of the ‘long” Woolworths and Coles positions at higher levels, we again begin tracking the approaching entry-level in these names.
Both have started to correct lower and we expect to see an appealing entry-level present this week.
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Coles – Take Profit
Coles Group has rallied over 15% from the recent Algo Engine buy signal. Investors should consider taking profit and reallocating into other oversold opportunities.
Coles – A Defensive Exposure
Coles Group is under Algo Engine buy conditions and is a current holding in our ASX 100 model.
We see support for Coles at $14.00
Coles Group – Finds Buying Support
Coles Group is under Algo Engine buy conditions and is now up 21.88% since being added to the ASX 100 model portfolio back in August last year.
We have since had a further higher low formation at $15 and new buying support is building.
We see limited upside based on the current valuation and investors are advised to apply a covered call strategy to enhance the income return. For more details on the strategy, please call 1300 614 002.
Woolworths Group was added to the model in August 2018 and is now up 38.29%
Coles – Value is Approaching
Coles Group is under Algo Engine buy conditions following the August buy signal at $13.00.
Since then Coles has rallied to $16, supported by investor enthusiasm for the aggressive cost-cutting program. As the stock price settles back we highlight the $14.50 level, as an area where value will again re-emerge.
Buy Coles within the $14.00 to $15.00 price range.
Coles – Valuation Review
Coles Group is under Algo Engine buy conditions and is a current holding in the ASX 100 model portfolio.
1Q sales results are tracking in line with guidance and we continue to see a relatively flat revenue and profit growth outlook for the Coles business.
FY20 revenue $39bn, EBIT $1.2bn and reported profit forecast is around $830mn. This places the stock on a forward yield of 3.2%, which looks like full value.
Adding an out-of-the-money covered call will help boost the cash flow returns to almost 10% per annum. For more detail on the strategy, please call our office on 1300 614 002.
Coles – Defensive Income
Coles Group remains under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
The share price has rallied 6% over the past week and we now recommend selling covered call options to enhance the income return.
COL goes ex-div $0.24 on the 28th of August.
Coles – Algo Buy Signal
Coles Group is under Algo Engine buy conditions and is now a holding in our ASX 100 model portfolio.
FY19 profit fell 9% to $1.43b, which was down from $1.58 the previous year.
The company declared a final dividend of $0.24 and a special dividend of $0.115.
We see support for the share price at $13, underpinned by the extensive cost-cutting program announced in the last quarter. Target cost savings over the next 3 – 5 years exceed $1 billion dollars.
Coles Group – Valuation Review
Coles Group has been a stand alone listed business since November 2018, after being spun-out of Wesfarmers.
The financial performance to date has been patchy at best and the recent Coles Strategy Day highlights were the confirmation of the dividend payout of 80-90% for FY19, (which translates to an estimated $0.55 per share or 4.1% yield) and the $1bn cost out program.
We forecast flat earnings and revenue growth into FY20 and suggest investors sell a covered call option to enhance the income return.
Level 29 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453
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