Today’s earnings miss in IAG, along with lower guidance into FY19 has seen a sharp sell-off with price moving back to $7.50.
We see long term value for investors who accumulate the stock within the $7.25 to $7.50 range.
IAG goes ex-div $0.20 on the 6th of September.
We’re looking for a retracement in Woolworths’ share price back to $28.50 and recommend accumulating within the value range displayed below.
WOW goes ex-div $0.50 on the 7th of September. Adding a covered call will boost the cash flow to 10 – 12% on an annualised basis.
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Downer EDI will report earnings on Thursday and any weakness in the share price ahead of the result, provides a buying opportunity.
We expect Thursday’s result to exceed market consensus, supported by positive industry trends. As displayed in CIMIC’s recent earnings result.
Downer goes ex-dividend $0.12 on the 11th of September.
Downer EDI
Unibail-Rodamco report 2H18 earnings on the 29th of August. Due to tax complications holding the ASX listed CDIs, we recommend investors consider building a position in the stock using a synthetic instrument such as a CFD.
This is an event driven opportunity based on the August result showing the early benefits of the cost synergies of the combined Westfield and Unibail businesses.
To establish a Saxo CFD account and take advantage of buying URW ahead of the result, please contact our office on 1300 614 002.
Unibail-Rodamco
Our Algo Engine generated a buy signal in RIO and the chart below highlights the indicated “buy zone”.
Investors can look to accumulate within $68 – $74 range.
Rio Tinto
The CKI consortium has completed its due diligence and has now entered into a binding Implementation Agreement to acquire 100% of APA’s stapled securities for an all cash offer of $11.00 per share.
The offer is still subject to a number of conditions including approval from the ACCC and the FIRB.
APA goes ex div $0.21 on the 28th December.
APA
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Our Algo Engine generated a buy signal in REA last week at $80.50.
Since then the stock has rallied almost $5.00, following a solid FY18 earnings result which met consensus forecasts.
Revenues were reported at $808m, EBITDA $464m and NPAT from core operations $280m.
In FY19, the market is looking for 15% revenue growth, flowing through to similar underlying earnings growth. This places REA on an FY19 forecast yield of 1.8%.
Despite, risks in soft listings and developer pipeline, we recommend maintaining long exposure to REA and applying a stop-loss below the recent $80.50 low.
REA
During last week’s earnings update, James Hardie provided an FY19 EBIT outlook in the range of US$300-340m. This was slightly below market consensus, suggesting 20% growth will not be achieved and it could be more in the range of flat to 10%.
With the stock trading on a high PE and an FY18 yield of only 2%, there’s not much room for disappointment.
JHX is a current holding within our ASX50 & 100 model portfolios, we’ll watch for the next Algo Engine buy signal and revisit the “buy side” case and update our readers.
James Hardie
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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