Based on the positive macro data, cost savings, benefits from US tax changes and the transformation program Ansell announced, we see upside to Ansell’s upcoming earnings result on the 12th February.
ANN currently trades at 17x 2019 earnings and a forward dividend yield of 2.7%.
We’re buyers on near-term weakness ahead of the upcoming earnings result.
Ansell
ALL’s exposure to recurring revenue is increasing, although the business remains exposed to cyclical trends.
The market’s response to Aristocrat acquiring Big Fish has been mixed.
We see the the deal as 3 – 4% EPS accretive in 2019 and will help to underpin EPS growth of 20%, placing ALL on a 2019 dividend yield of 3.3% and a PE of 20x earnings.
ALL is among the best performing stocks in our ASX 50 model and we advise investors to look for near-term buying support along with the next Algo buy signal.
Aristocrat
SUN is due to release its 1H18 results on Thursday 15 February.
We are expecting NPAT of $510m, which is around 50% of the full year target of $1.05b
FY18 EPS growth should be around 5% and the dividend will remain flat at $0.73 placing Suncorp on a forward yield of 5.3%.
Our Algo Engine triggered a sell signal on the recent “lower high” formation and, therefore, we do not hold this name in our model.
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Last week we mentioned that shares of TAH had reached overbought levels in the $5.75 area.
The share price has dropped 5 days straight and is now approaching the buy zone at $5.30.
We expect the synergy between TabCorp and Tatts to enrich the value of the company and believe TAH is a reasonable addition to investor portfolios for 2018.
TAH will go ex-dividend on February 7th for 12.5 cents per share. At $5.30 per share, this pencils out to a 4.7% yield.
TabCorp
Our Algo Engine triggered a buy signal in AGL on the 22nd August at $22.64.
Considering the recent “higher low” formation at $24.00, we recommend investors add AGL to their portfolios.
AGL is a current holding in the ASX 50 model portfolio and we’ve added a covered call option to enhance the yield.
AGL pays a 41 cent in dividend on the 23rd of February.
AGL
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Our ALGO engine triggered a buy signal in QANTAS on December 8th at $5.25.
Since then the share price dipped to a low ow $4.84 on a combination of higher oil prices and a stronger AUD/USD.
With analysts forecasting QAN to post record earnings of 10.32% over the course of 2018, investors could expect shares of the flying kangaroo to reclaim some of last year’s upside trajectory.
Internal momentum indicators are pointing higher and the next key technical target is the mid-December high of $5.45.
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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