Telstra Firms In Front Of Next Week’s Investor Day

Posted on | by Todd

Since posting an intra-day low of $2.74 on Wednesday, shares of Telstra have risen over 8% and are pushing against $3.00 in early trade today.

We cite two fundamental catalysts for the renewed buying interest in the telco giant.

First, the acquisition of Time Warner by ATT in the US has supported the idea of  global telecommunication firms increasing revenue by diversifying into media and entertainment.

Second, TLS will be hosting its highly anticipated investor day next Wednesday, June 20th.

We expect this event to be a pivotal day for TLS as it’s expected to discuss its growth initiatives, future earnings and the status of its dividend.
We consider TLS good value at current prices and look for an upside target near $3.90 over the medium-term. 
Telstra

 

Buy Medibank Private – Support $2.80

Posted on | by Leon Hinde

We suggest accumulating Medibank near the $2.85 support level.

Medibank is a current holding in the ASX 50 model portfolio from may 30th at $2.73.

Following the correction from the January high of $3.30, the stock now trades on a forward yield of 4.5%.

We expect a  rally from the current $2.85 level back towards $3.00. We will then add a covered call option, which will help further enhance the annualised cash flow.

Medibank Private

 

CYB Moving Higher On Virgin Money Takeover Bid

Posted on | by Todd

Shares of Clydesdale and Yorkshire bank continue to firm as the market assesses the takeover of Virgin Money as a net positive for the UK-based lender.

Under the terms of the current proposal, CYB will acquire 100% of Virgin Money by issuing 1.21 new shares in exchange for each share in Virgin.

The takeover board has extended the deadline for CYB’s decision to June 18th for Virgin’s 6 million personal and business customers.

Will believe that CYB will move forward with the takeover. As such, the cost synergies via the rationalization of operations and the reduction in IT spending will add value and lift the share price.

Our ALGO engine triggered a buy signal at $4.40 back in July of last year. We suggest buying CYB at current levels with an initial upside target of $6.00 and solid support at $5.15.

CYB

 

 

 

 

Buy IPL – Support at $3.40

Posted on | by Leon Hinde

We suggest accumulating IPL  shares at current levels following the recent Algo Engine buy signal at $3.30.

The stock is a current holding within the ASX 50 model portfolio.

This week IPL announced the mitigation to a recent a contract loss, through a new contract with Fortescue.

IPL stated that the FMG contract would mitigate ~50% of the financial impact associated with previously announced contract losses in Western Australia.

We forecast FY19 EPS growth of 10%, placing the stock on a forward yield of 4.3%.

IPL

Ramsay Should Outperform From Current Levels

Posted on | by Todd

Shares of RHC are down about 20% year to date.

Changes in government funding and regulations have been a headwind for the private health sector, in general, and on RHC, specifically.

However, recent industry research is estimating RHC EPS growth to reach 8% for FY 18 and then rise to 10% for FY 19.

At $58.20, the stock is trading at 18.7 X 12 month forward EPS.

We see scope for the share price to reach $74.50 over a 12-month time horizon.

Ramsay Health Care

Cimic Group Goes Ex-Dividend

Posted on | by Todd

Shares of Cimic are down over 2% to $40.85 in early trade as the company goes ex-dividend today.

This drop is a few cents deeper than than the 75 cent dividend that will be paid  to shareholders on July 4th.

CIM was added to our ASX Top 100 portfolio in June of 2016 at $35.00.

CIM has been a steady performer in client portfolios over the last two years and we will look to add to long positions on a pull back into the $40.20 area.

Cimic

 

Caltex Jumps Higher On Improved 1H Profit Estimates

Posted on | by Todd

Shares of Caltex have surged by over 3% in early trade as the company expects to book higher first half profits even with lower retail fuel margins.

This looks to be a positive result of the “shrink to grow” strategy put into place late last year and has lifted the return on assets to just under 14% at 7X EBITDA.

We don’t have a current ALGO signal on CTX, but we suggest keeping the stock on the radar for a signal soon.

The internal momentum indicators are pointing to the next area of resistance near $31.20, with support in the $29.80 area.

Caltex