The following group of stocks offer above average earnings growth, structural uptrends and are currently trading back on support levels that warrant closer attention.
ASX, AMC, BXB, JHX RHC, SEK, SHL, SUN and TWE.
More detail on the Investor Signals portfolio allocations and derivative overlay strategy will be provided in the October ASX top 50 Video Market Report.
Seek (SEK.ASX) reported FY16 NPAT of $198m in line with guidance. The company maintained FY17 guidance of NPAT in the range of $215 – $220m.
Weakness in the education segment was off set by strength in the Asian employment business. FY17 revenue should increase 10% to $1b on EBITDA of $415m, EPS of $0.64 representing 15 – 20% underlying growth. This places the stock on a forward yield of 2.4%, assuming $0.40 in dividends for FY17.
Seek trades on 25x FY17 multiple and therefore we think the stock trades in a range of $16.00 support to $17.50 resistance for the next 12 months or more.
Long SEK.ASX
This is a difficult one to pinpoint the ideal entry level, so you may want to think about managing the entry price with two separate buy transactions. The momentum supports a bounce at or near the $14.50 to $15.00 range as an entry point. This will be a slow consolidation, followed by a bounce higher. Be patient, mange the entry price and SEK should deliver further upside momentum.
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