Sydney Airport

Following the entitlement offer Sydney net debt position will reduce from $9.1 billion to $7.1 billion. Post the capital raising, available cash will increase to $4.6 billion.

New securities under the final allotment commence trading on 14 September.

Sydney Airport

Sydney will raise up to $2bn through a renounceable one-for-5.15 rights issue at $4.56 a share, which is a 15% discount to the last close and underwritten by UBS.

SYD  reported a half-year loss of $53.6 million, with no interim dividend declared. Revenue down 36% to $511m and EBITDA down 35% to $300m.

Sydney Airports – Buy Signal

Sydney is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

We see buying support building between $7.80 and $8.00. On a rally back to $8.50, investors should consider selling a European call option into early 2020 to enhance the income return.

SYD goes ex-div $0.19 on the 28th of December.

 

SCG & SYD – Approaching Oversold Levels

During the recent run-up in US interest rates, yield sensitive names have faced heavy selling pressure over the last 8 weeks.

However, as a “risk off” wave now appears to be hitting equity markets, it’s likely bond yields will consolidate, and in the process provide some selling reprieve for the yield sensitive names.

SCG and SYD are two examples where we now feel the prices reflect good value.

Sydney Airport

Scentre Group

ALGO Update: Upward Bias For Sydney Airport

Our ALGO engine has been long SYD since July 12th from $7.05.

After a brief rally to $7.60 in late August, the share price is just below $7.00.

SYD reported solid passenger growth in August with a 5.1% increase in travellers year to date.

For H1 2018, SYD spent $180 million on capital upgrades aimed at increasing capacity including landing strip and terminal expansions.

We see good technical support in the $6.70 area with an upside target of $7.80 over the medium-term.

Sydney Airport

 

 

ALGO Buy Signal For Sydney Airport

Our ALGO engine triggered a buy signal for Sydney Airport into yesterday’s ASX close at $7.05.

The “higher low” chart formation is referenced to the $6.90 intra-day low posted on May 17th.

SYD has now been added to our ASX Top 50 Model portfolio.

As a medium-term strategy for investors, we are looking to buy SYD shares at current levels and sell the $7.25 Calls into March.

The option is current priced at 30 cents and SYD will go ex-dividend for 18 cents in late December. As such, this Buy/Write strategy would add 48 cents of value into client portfolios.

Sydney Airport