IFL – Buying Support Returns

IFL has caught our attention again after yesterday’s strong price performance following a number of research houses upgrading the earnings outlook.

The upgrades are supported by aggressive cost savings, post the acquisition of the ANZ advice business.

We’re not convinced IFL is a long-term buy and hold but with the recent upgrades we may see buying momentum create another leg higher in the “higher low” price formation.

We recommend running a stop loss below the recent low.

IOOF Holdings – FY17 Earnings Result

Diversified financials –  Wealth management firm IOOF Holdings Limited (IFL.ASX) yesterday released its profit results for the six-months ending June 30, 2017.

Underlying NPAT was reported at  $90m, which is up 15% on the same time last year and full year FY17 profit at $169m.

IOOF declared a final dividend of 27c per share, fully franked, bringing the Full year dividend to 53c and placing the stock on a 5% yield.

A surge of net inflows from it’s expanding FUM business and strategic cost control are likely to help underpin 10%+ EPS growth into FY18, with forward revenue  increasing from $566m to $590m, EBIT increasing from $240m to $270m  and DPS to increase to 0.56 per share.

Our Algo Engine last signalled a BUY at just over $8 on 15/03/2017.

Following yesterday’s result,  IOOF posted a new 52-week high of $10.86 on expanded volume.

IFL is now trading at 18x underlying EPS, we view this is full value and we feel the stock is likely to begin a new consolidate range.

Chart – IFL