Medibank – Buy-Write Generating 10% Cash flow

Posted on | by Leon Hinde | Leave a Comment on Medibank – Buy-Write Generating 10% Cash flow

Medibank remains in our ASX50 model portfolio from lower levels and we continue to view the stock as a worthwhile buy-write strategy at the current “higher low” price formation.

MPL pays $0.053 dividend on the the 7th of March and when complimented with a $3.30 June call option, (credit  $0.11), the strategy delivers 10%+ in annualised cash flow.

MPL reports 1H18 earnings on the 16th of February and the market is looking for 3 – 5% EPS growth and NPAT of $230 million.

 

Algo Update – Buy AGL

Posted on | by Leon Hinde | Leave a Comment on Algo Update – Buy AGL

Our Algo Engine triggered a buy signal on the 23rd of August in AGL at $22.64.

Following this, AGL rallied to $26.50 before retracing back to the current higher low at $23.70.

AGL remains in our ASX50 model portfolio and a positive earnings result when the company updates the market on the 8th of February, should provide renewed buying support.

AGL pays a $0.41 dividend on the 23rd of February.

 

 

 

ALGO Signal: Buy Bega Cheese

Posted on | by Todd | Leave a Comment on ALGO Signal: Buy Bega Cheese

Our ALGO engine triggered a buy signal in Bega Cheese at yesterday’s close at $6.80.

This signal is based on the “higher low” chart formation relative to the $6.55 low on October 5th.

BGA, who bought Vegemite a year ago, has continued its expansion plans buy acquiring the Peanut Company of Australia in December.

According to BGA management, the company’s strong balance sheet will allow it to look for other potential opportunities in the dairy and food sectors this year.

Shares of BGA gained more than 60% in 2016/17.

As many consumers steer away from diets with high sugars and carbohydrates, we believe BGA is a reasonable investment at current levels.

Initial technical price resistance will be found in the $7.50 area.

Bega Cheese

 

 

 

RIO Slips After Q4 Output Report

Posted on | by Todd | Leave a Comment on RIO Slips After Q4 Output Report

Shares of Rio Tinto are down almost  1% in early trade near $81.00.

This could be a case of “buy the rumor, sell the fact” as the mining giant’s Q4 production numbers were largely as the market expected.

Earlier today, RIO announced a 3% increase in Pilburra iron ore output , producing just under 88 tons, and reaching its 2017 guidance figures of 330 tons for the year.

Since posting a low of $68.60 on December 12th, RIO shares have rallied over $13.00 in just over a month.

This is a 20% gain on what has been a surprisingly resilient Spot iron Ore market over the last 8 weeks.

RIO has been in our Top 50 Model portfolio since March 6th when it was trading at $61.50.

We will look for a pull back into the $73.00 area before adding to long positions.

Rio Tinto

 

Potential Triple Bottom In Sydney Airport

Posted on | by Todd | Leave a Comment on Potential Triple Bottom In Sydney Airport

Since posting an intra-day high of $7.60 on November 29th, shares of SYD have slid over 12% lower and hit a 10-month low of $6.63 yesterday.

A combination of higher interest rates and questions about the company’s new leadership have kept buyers on the sidelines over the last month.

However, SYD’s new chief executive Geoff Culbert has signalled that he will focus on boosting tourism in NSW when he officially takes over at the end of the month.

From a technical perspective, yesterday’s low print in the share price sets up a potential “triple bottom” pattern dating back to April of last year.

The daily price chart illustrates that when shares of SYD traded in the low $6.60 handle in April and August of last year, those level preceded a 10 to 15% rally in share price in the following months.

SYD is scheduled to release their full-year traffic numbers in two weeks and we believe investors will benefit from holding shares from these levels in their portfolios.

Sydney Airport

 

 

 

 

QAN Gaps Higher

Posted on | by Todd | Leave a Comment on QAN Gaps Higher

Shares of QAN have jumped at the ASX open and have reached a 4-week high of $5.20 in early trade.

Considering the headwind from the recent rally in crude oil prices, the stock has posted an impressive bounce off the January 10th low of $4.77.

The internal momentum indicators are pointing higher and our ALGO engine triggered a buy signal on December 8th at $5.25.

We expect to see additional gains into the March 7th dividend payment, with the next level of chart resistance near $5.60.

 

QANTAS