ALGO Update: Go Long Sonic Healthcare

Posted on | by Todd

Our ALGO engine triggered a buy signal for SHL last Friday at $23.70.

This “higher low”pattern is referenced to the intraday low of $22.50 posted on April 4th.

We like the diversified structure of SHL in which no single operation accounts for more than 25% of the company’s overall revenue.

In addition, SHL generates a large percentage of their earnings in both the USA and Europe which will increase, on a net basis, as the AUD trades lower.

We consider SHL a good buy/write strategy as the share price approached the $25.00 level.

Sonic Healthcare

 

Buy Healthcare Names: CSL, RMD & SHL

Posted on | by Leon Hinde

Our Algo Engine has triggered buy signals in Sonic Healthcare, Resmed and CSL over the past few trading sessions.

RMD has experienced its first sell-off since rallying from $10 last year to $16 only a few weeks ago.

The ALGO engine is now flagging the new “higher low” at $14 and we suggest buying a 1/2 size allocation here and then waiting to see if we get another ALGO signal to add to the position.

CSL provides good long-term fundamentals. The PE is still expensive, however, 10 – 20% EPS growth is attractive! Accumulate at $180

SHL looks to be good value at $23. We see resistance is $25, so look to sell call options to enhance the return. 

Chart: RMD

Chart: CSL

Chart: SHL

 

 

ALGO UPDATE: Take Profits In Short Sonic Trades

Posted on | by Todd | Leave a Comment on ALGO UPDATE: Take Profits In Short Sonic Trades

Our ALGO engine triggered a sell signal in SHL on February 5th at $24.85

In our blog post from March 3rd, we set an initial downside target of $23.10.

Shares of SHL hit $23.00 yesterday and we closed out of our short CFD positions on the SAXO Go platform.

At 21X estimated 2018 earnings, the stock looks more attractive at $23.00, than at $25.00

However, given the heightened volatility in the ASX market in general, we will remain flat in SHL and advise clients when we look to enter another position.

Sonic Health

ALGO Update: SHL Still Looks Expensive

Posted on | by Todd | Leave a Comment on ALGO Update: SHL Still Looks Expensive

Our ALGO engine triggered a sell signal in SHL on February 5th at $24.85.

In the company’s recent earnings report, their 2018 guidance expects growth in the 6% to 8% range.

This places SHL at 22.5 times earnings, which is considerably higher than its industry peers.

Technically, the next key support level is found at the February 15th low of $23.10.

Sonic Health

 

Sonic Healthcare Firms On 1H18 result

Posted on | by Leon Hinde | Leave a Comment on Sonic Healthcare Firms On 1H18 result

Sonic Healthcare delivered 1H18 revenues of $2.7 billon, which was up about 8% versus last year.

Group EBITDA margin missed forecasts and therefore, at 21 x forward earnings and only a 3.4% dividend yield, we view SHL as full value.

The stock was removed from our ASX 50 model a few weeks back when the Algo Engine triggered a sell signal.

Investors looking for cashflow should look to buy SHL on a pullback below $23 and then sell $24 December call options; whilst remaining exposed to the Mar and Sep dividends along with collecting the added option premium.

This strategy  delivers 12% cash flow on an annualized basis.

Sonic Healthcare

 

Healthcare – Preferred Holdings

Posted on | by Leon Hinde | Leave a Comment on Healthcare – Preferred Holdings

CSL, SHL, RMD & RHC remain our preferred healthcare names.

Resmed is looking a little expensive and we’d like to repurchase on the next retracement.

Sonic Healthcare:  we expect 5 – 8% EPS growth and consider this a good buy/write addition to portfolios.

Ramsey Healthcare – Accumulate with $74 price target

CSL:  15 – 20% EPS growth remains attractive and adding a covered call option enhances the yield.

CSL

 

 

Sonic Gets A Boost

Posted on | by Todd | Leave a Comment on Sonic Gets A Boost

After trading as high as $24.50 on June 29th, shares of SHL dropped over 15% to post an intra-day low of $20.60 last Thursday.

The company got some good news last week when they won an exclusive contract to provide a pathology laboratory in two of London’s hospitals.

The contract has a term of 12 years and is expected to contribute over 12 million Sterling in revenue per year.

Looking at the internal momentum indicators, the share price is slightly oversold and has upside potential to the $22.70 area.

We consider SHL a reasonable buy/write stock which offers price appreciation and enhanced cash flow with the derivative overlay strategy.

Sonic Health