Amcor has been shortlisted to acquire the global leader in closures. Amcor identified closures as a new strategic segment at its investor sessions in June 2017.
If regulators approve the deal, Amcor may look to issue new equity.
We continue to view Amcor as a core holding and advise selling call options to enhance the return.
AMC trades on a forward yield of 4%.
A consortium of energy investors has made an all-cash takeover offer for Santos worth A$11 billion.
Indicative pricing for the bid was expected to be around A$5.30 per share, a 21% premium to Wednesday’s closing price.
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The current market weakness provides investors with the opportunity to add AMC and SHL to their portfolios at a reasonable entry level.
We advise selling out-of-the money call options on the other side of the February/March dividend period.
The above strategy is producing 10 – 12% annualised cash flow from the dividends and call option income.
Spot Crude Oil prices fell sharply in overnight trade after a report from the International Energy Agency (IEA) said that global oil demand is much weaker than OPEC consensus figures and will weaken further in 2018.
The report also showed that US shale, and other non-OPEC producers, will add an additional 1.4 million barrels per day of supply on top of the fall in demand.
These comments pushed the front-month WTI Crude contract down over 2% to $55.10.
Oil traders have gained confidence in the rebalancing effort lately, with impressive OPEC compliance and a high likelihood that the cartel extends its production cuts, perhaps through the end of 2018, when they meet later this month.
We continue to like WPL and ORG as our preferred buy-side opportunities.
General Electric has sold off following the announced business restructure and cut in dividend. Based on forward earnings and 15x multiple a conservative valuation is $16 for GE shares.
Look for buying to develop within the $16 – $18 range.
General Electric
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On the 7th of November we posted an alert regarding the “short trade” set-up in QANTAS. Since then, QAN has sold off from $6.34 and is now trading at $5.77.
The price action will likely find buying support in the $5.50 – $5.75 range and traders should look to close out the short side position.
QANTAS
Level 29 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453
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