CBA Rebounds On Solid Earnings Report

Posted on | by Todd | Leave a Comment on CBA Rebounds On Solid Earnings Report

Shares of CBA have jumped over 1% to $81.50 in early trade as the bank’s earnings report was slightly ahead of expectations, with no surprises, and with no mention of their current AML issues.

The bank announced a net profit of $9.9 billion with operating income up 3.8% and bad debt provisions down to a 9-year low of 15 basis points.

A final dividend of $2.30 per share  was announced, which lifted the total annual dividend to $4.29, compared to $4.20 last year. The EPS came in at $5.74 versus $5.55 a year ago.

The return on equity dropped 50 basis points to 16%, as net interest margins fell 3 basis points to 2.10%. CBA also announced plans to sell their capital-intensive life insurance business.

On balance, this was a positive report which will likely be overshadowed by the AUSTRAC allegations of wide scale  AML and counter-terrorist financing breaches.

Technically, we still advise caution to the downside risk as the “lower high” pattern dating back to early May is still the dominant chart feature. We still see scope for a test of the June 7th low of $77.65 as a reasonable price target.

  Commonwealth Bank

 

Scentre Group, Westfield & Listed Property

Posted on | by Leon Hinde | Leave a Comment on Scentre Group, Westfield & Listed Property

Scentre Group announced their estimated distribution for the six month period ended 30 June 2017 will be $0. 10 cents per ordinary stapled security.

Scentre Group will announce its results for the half year ended 30 June 2017 on Thursday, 24 August 2017.

Charts – SCG

The chart  of Westfield below illustrates the price action is now in an oversold range.

Chart – WFD

Our Algo Engine triggered a buy signal in the SPDR Property Fund ETF.

Chart – SFL

 

 

IOOF Holdings – FY17 Earnings Result

Posted on | by Philip Rassalski | Leave a Comment on 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

James Hardie Hammered As Profits Drop 34%

Posted on | by Todd | Leave a Comment on James Hardie Hammered As Profits Drop 34%

Shares of JHX have dropped over 3% in early trade as the building materials supplier announced Q1 profits fell 34% to $USD 57 million.

JHX reported that net sales for the three months to June 30 have grown 6% to $USD 507 million, compared to the same period last year.

However, it said earnings margins were under pressure from higher production costs and increased competition in the construction materials sector.

At 26x forward earnings with a 2.7% forward yield , we’ve been advising clients about the risks of the low dividend, high P/E posture of the stock since it traded in the $22.50 area in early May.

We now see the next downside target for JHX in the $17.60 area.

James Hardie

 

 

Algo Short Signal – Harvey Norman

Posted on | by Leon Hinde | Leave a Comment on Algo Short Signal – Harvey Norman

The technical pattern for Harvey Norman started to break-down early this year when the price action traded through the $4.50 support level.

Since then, HVN made a low in June at $3.55 and has now had a counter-trend rally back to $4.50.

Our Algo Engine is now flagging the “lower high” structure and we’ve added HVN to the short trade list with a stop loss above the $4.75 area.

Short term traders may prefer to use the momentum indicators to compliment the entry and stop loss rule.

HVN reports on the the 31st August. The market is looking for NPAT to increase to $377m, (from $337m last year), and DPS up 1 cent to $0.18.

Overly optimistic property revaluations, along with weak consumer trends, concern us and support our bearish view.

Chart – HVN