Star and Crown Casino – Back On The Radar

Posted on | by Leon Hinde | Leave a Comment on Star and Crown Casino – Back On The Radar

Star reported normalised NPAT of $120m, up 12% on the same time last year and revenue growth was strong, up 16%.

FY19 revenue is forecast to be $2.9b, EBIT $430m, DPS $0.16, placing the stock on a forward yield of 3%.

Investors should watch for the next Algo Engine buy signal in both Star and Crown as they approach a new higher low formation, which will provide a good entry level.

Star Casino

Crown Casino

 

 

 

 

Sonic Healthcare Firms On 1H18 result

Posted on | by Leon Hinde | Leave a Comment on Sonic Healthcare Firms On 1H18 result

Sonic Healthcare delivered 1H18 revenues of $2.7 billon, which was up about 8% versus last year.

Group EBITDA margin missed forecasts and therefore, at 21 x forward earnings and only a 3.4% dividend yield, we view SHL as full value.

The stock was removed from our ASX 50 model a few weeks back when the Algo Engine triggered a sell signal.

Investors looking for cashflow should look to buy SHL on a pullback below $23 and then sell $24 December call options; whilst remaining exposed to the Mar and Sep dividends along with collecting the added option premium.

This strategy  delivers 12% cash flow on an annualized basis.

Sonic Healthcare

 

Yield Names Get A Boost From Lower US Rates

Posted on | by Todd | Leave a Comment on Yield Names Get A Boost From Lower US Rates

As US 10-year bond yields pull back from recent highs, shares in local yield sensitive names have been lifted off their recent lows.

The inverse correlation between US interest rates and GPT, SYD and TCL  has been acute over the last 3-months.

Since January 1st, US 10-year yields have risen over 20%, climbing from 2.40% to reach a 4-year high of 2.95% last week.

During this same period, the share prices of GPT, SYD and TCL have all dropped by over 10%. However, both SYD and TCL gained over 2% on Friday.

It’s our base case that the US 10-yrs will find resistance at the 3% level and offer upside price action in the local yield names.

All three of the above names are included in our ASX Top 50 model portfolio.

We expect to see price appreciation in the 4% to 6% range over the near-term as US yields retrace lower.

 Sydney Airport

Transurban

 

NCM Down 3% On Dismal Earnings Report

Posted on | by Todd | Leave a Comment on NCM Down 3% On Dismal Earnings Report

Shares Newcrest have dropped over 3% in early trade as their half-yearly results disappointed the market.

The mining giant announced that revenue was down 5% to $1.7 billion, EBIT fell 50% to $230 million and free cash flow was reduced by 48% to $134 million.

As awful as these headlines appear, there were some bright spots.

The balance sheet improved compared to June 2017 with cash equivalents increasing to $556 million from $492 million.

Net debt improved to $1.436 billion from $1.499 billion, with their net gearing reduced from 16.6% to 15.9%.

 

A dividend of USD 7.5 cents per share was declared with the report, which will be paid to shareholders on May 2nd.

NCM was added to the Top 50 Model Portfolio on December 13th at $22.10.

We will look to add NCM to client portfolios on a pull back below the $22.00 level.

Newcrest Mining