NAB – Resistance at $31.50

Posted on | by Leon Hinde | Leave a Comment on NAB – Resistance at $31.50

Australian banks have been oversold, and over the past two weeks we’ve seen capital flows reallocated towards the sector. 

NAB has now rallied $2.00 or 6% since the beginning of February.

Limited revenue growth has created a “shrink to grow” strategy among all of the major banks, along with a renewed focus on cost control.

Due to the delay in benefits from the strategy being passed through to shareholders, we believe the current share price rebound will be limited.

The NAB chart below perfectly illustrates the range where we expect selling pressure is likely to build.

NAB

Woolworths – Where is fair value?

Posted on | by Leon Hinde | Leave a Comment on Woolworths – Where is fair value?

Woolworths 1H18 EBIT was up 10% on the same time last year and 1H18 NPAT came in at $900 million, an increase of 15%.

Earnings Per Share (EPS) for FY18 is likely to be around $1.35 and if we assume moderate growth into FY19 and FY20, with an EPS range $1.40 to $1.60, the stock trades on a forward yield of 4.1%.

On the above calculation, fair value for WOW is near the $26.50 range.

Woolworths

 

Can Telstra Shares Firm Into Ex-Dividend?

Posted on | by Todd | Leave a Comment on Can Telstra Shares Firm Into Ex-Dividend?

Since the release of their H1 earnings results on February 15th, shares of TLS have traded in a narrow 10 cent range between $3.40 and $3.50.

Looking past the $273 million impairment made against its Ooyala business, the growth in the TLS Enterprise and Whole businesses has been encouraging for top line growth.

The company reported earnings per share of 14.3 cents for the period and declared an interim fully franked dividend of 11 cents per share.

This was made up of a 7.5 cents per share ordinary dividend and a 3.5 cents per share special dividend.

The record date for both dividends is March 1, with payment then expected to be made on March 29.

It’s reasonable to expect some buying interest to come into the share price in front of the dividend date.

We prefer the long side of TLS at these levels and look for a return to the $4.00 handle over the medium-term.

Telstra

 

 

ALGO Sell Signal For BOQ

Posted on | by Todd | Leave a Comment on ALGO Sell Signal For BOQ

Our ALGO engine triggered a sell signal for BOQ into Friday’s ASX close at $12.74.

The technical “lower high” price structure is related to the November 30th high at $13.20 and the November 1st high at $13.40.

BOQ raised $350 million from its Capital Notes offer in late 2017 after strong investor demand for the offer saw it increase from $325 million.

This corporate action saw the share prices post a mild rally before sliding down to $11.72 on February 8th.

We expect the next resistance level near $12.90 before trading back below $12.00 over the next few weeks.

Bank of Queensland