S32 Production Update

Posted on | by Leon Hinde

S32’s 1QFY19 production result was generally better than the market had expected.

However, with forward earnings guidance unchanged, we see further downside for the share price given the weak market backdrop.

Price support is likely to be within the $3.20 to $3.50 range.

South 32

ALGO Update: Go Long Sonic Healthcare

Posted on | by Todd

Our ALGO engine triggered a buy signal for SHL last Friday at $23.70.

This “higher low”pattern is referenced to the intraday low of $22.50 posted on April 4th.

We like the diversified structure of SHL in which no single operation accounts for more than 25% of the company’s overall revenue.

In addition, SHL generates a large percentage of their earnings in both the USA and Europe which will increase, on a net basis, as the AUD trades lower.

We consider SHL a good buy/write strategy as the share price approached the $25.00 level.

Sonic Healthcare

 

IAG – Finding Investor Support

Posted on | by Leon Hinde

Our Algo Engine generated a buy signal in IAG last Thursday.

With the stock trading down to $7.00, a 1-year low for the share price, we now expect buying support to build.

Internal momentum indicators suggest a rebound into the $8.00 range is likely over the medium-term.

Added price support is likely from capital management post-Asian asset sales.

We estimate up to $600 million made up of $300 million in special dividend and $300 millon in share buybacks.

 

Aristocrat Continues To Firm On Higher Earnings Estimates

Posted on | by Todd

Since testing a key support level at $27.00 last Friday, shares of ALL have rallied over 10% to hit a 1-month high of $29.60 in early trade today.

The stock has been supported by suggestions that next month’s full-year profit announcement  is likely to surprise to the upside by as much as 20% in the group’s social gambling business.

At $29.40, ALL is at about 19X estimated FY 2019 earnings. In addition, given ALL’s exposure in the USA, a further fall in the AUD/USD will act as a tailwind going into next year.

ALL is part of our ASX Top 50 Model portfolio and we have an upside target of $40.50 over the medium-term.

Aristocrat

 

Crown Is Building For The Future

Posted on | by Todd

Shares of Crown Resorts have found solid support in the $12.80 to $13.00 area over the last several trading sessions.

With consistent casino and non-casino earnings from their Perth and Melbourne properties, investors are warming up to the potential benefits from CWN’s $2.2 billion project in Sydney; even if it’s 18 months from completion.

At current levels, the stock is trading at 21X FY 2019 earnings for a partially franked yield of 4.5%.

Crown is included in our ASX Top 100 Model Portfolio.

Our near-term price target is just over $14.20, with a longer-term view to $15.75

Crown Resorts

 

 

 

ALGO Buy Signal For CYB

Posted on | by Todd

Our ALGO engine maintains a buy signal in CYB near the $5.20 support area.

This “higher low” pattern is referenced to the intraday low of $5.00 posted on June 1st.

On a percentage basis, the 15.5% drop in CYB  is almost twice as much as the other ASX banking stocks over the last month.

Considering that CYB has most of its mortgage exposure in the UK, has an net interest margin of 220 basis points and is not being targeted by the Royal commission, we believe the stock is oversold.

At $5.20, CYB is trading at 12X FY 2019 earnings. Technical readings suggest a bounce back into the $5.70 area before more significant price resistance at $6.25.

CYB Bank