Real Estate Investment Trusts – Outperform

Posted on | by Leon Hinde

Our Algo Engine has the following group of REITs under  buy conditions CHC, DXS, GMG, GPT, LLC, SCG, & VCX. These names all sit in the ASX 100 model portfolio.

Chart Hall Group is the best performing REIT within our models, up 54% after holding it for 574 days.

REITs have performed very well in recent weeks, due to the  moderating outlook for bond yields. If yields remain under pressure, defensive asset
classes, such as A-REITs and utilities will outperform through 2019.

A slowing global growth picture, low bond yields, rising equity market volatility are generally seen as positive catalysts for defensive sectors. The recent run up in these names means much of the value has already been captured. Therefore, we recommend investors use covered call options to enhance the income return.

As an order of preference, we feel large scale logistics, followed by office and then residential. 

EPS growth for the sector is running around 4 -5% and dividend yields are near 5% also.  Add a covered call and you’re able to achieve 10% annualised cash flow.

For more detail on covered call strategies please call of our office on 1300 614 002.

CHC

SLF Property ETF

 

 

Lendlease – $700 million problem

Posted on | by Leon Hinde

Lendlease’s engineering and services division announced a further $350 million write down last week, which brings the NorthConnex tunnel project write-offs to more than $700 million.

An extraordinarily large number on a project that offers a total revenue of $2 billion. As a result of this, the board of Directors are currently considering if the division is “core” to the Leanlease operation.

Currently the division, contributes less than 15% to LLC’s overall earnings.

The markets reaction has been brutal and with the stock down over 20% in the last two days.

At under $14.00, we consider this a unique long-term opportunity to accumulate LLC at a discounted valuation.

Lend Lease

 

Quality On Sale – LLC, ASX, CSL & ALL (Video Link)

Posted on | by Leon Hinde

Lendlease, ASX, CSL and Aristocrat are names that we covered in Monday’s Opportunities in Review webinar.

Again, we draw your attention to these high quality businesses that have seen a recent correction in their share price.

We believe these names are close to finding support and should be the focus of establishing entry conditions. Watch the short-term momentum indicators for a reversal higher.

Click below to watch the short two minute video

 

 

Lend Lease Is Nearing The Buy Zone

Posted on | by Todd

Our ALGO engine triggered a buy signal for LLC last Friday at $18.70.

We mentioned in our commentary that investor support should emerge near the $18.00 support level; the low for today has been $18.02

From a technical perspective, internal momentum indicators have reached an extremely oversold level and a price reversion higher looks likely from here.

We see the first level on upside resistance near the October 2nd high of $19.60.

Lend Lease

ALGO Buy Signal For Lend Lease

Posted on | by Todd

Our ALGO engine triggered a buy signal for LLC into Friday’s ASX close at $18.70.

This “higher low” pattern is referenced to the intraday low of $17.25 posted on April 27th.

Since reaching an all-time high of $21.70 on August 7th, the share price has dropped over 14% and traded to a 5-month low on Friday.

We believe the company is well positioned in the infrastructure construction space and its international expansion will diversify the risk of a slowdown in the domestic residential market.

At current levels, we calculate LLC is trading at about 13X FY 19 earnings and expect the stock will find investor interest above the $18.00 support area.

Lend Lease

 

ALGO Update: LLC Is Approaching Overbought Territory

Posted on | by Todd | Leave a Comment on ALGO Update: LLC Is Approaching Overbought Territory

Our ALGO engine triggered a sell signal in LLC into the ASX close at $17.88.

The “lower high” pattern is referenced to the October 17th high of $18.70.

Shares of LLC have risen about 16% since posting solid H1 results three weeks ago, which included a $500 million share buyback scheme over the next 12 months.

However, the internal momentum indicators are now approaching overbought territory.

We see strong technical resistance in the $18.15/20 area and expect the share price to revert back to the $17.20 support area over the near-term.

Lend Lease

 

Lendlease – Finding Support Near $15.50

Posted on | by Leon Hinde | Leave a Comment on Lendlease – Finding Support Near $15.50

Our Algo Engine generated a buy signal in Lendlease back in October.  Since then the stock has moved down to find buying support at $15.50.

LLC is in the ASX 50 model and we expect buying support will soon see  the share price recapture $17 in the weeks ahead.

Place a stop-loss order on a  break back below $15.50.

Lendlease

 

Construction Arm Boosts Lendlease

Posted on | by Todd | Leave a Comment on Construction Arm Boosts Lendlease

Shares of property group Lendlease popped to an 18-month high of $15.84 in early trade as the company announced a sharp increase in after tax profit.

For the six months ending December 31st, Lendlease posted a 12% rise in net profit to $394.8 million.

The stronger result was largely based on the 40% increase in earnings for their construction division, with their investment and development divisions posting pretty much unchanged results from last year.

The company announced an interim dividend of 33 cents per share (fully franked), which was slightly higher than the street’s expectation of 30 cents per share.

The company’s return on equity for the last six months reached 13.7%, which is at the upper end of their 10 to 14% target guidance.