RIO, OZL, NCM & FMG – Sell Conditions

Posted on | by Leon Hinde

RIO has completed US$5bn plus in asset sales and has the potential to free up a further $3bn plus, should the Grasberg sale proceed as planned.

RIO has returned significant cash to shareholders in the last 18 months. By the time the portfolio restructure is complete, the number may top US$15bn, with further asset sale proceeds returned to shareholders next year.

We remain cautious of RIO, OZL, NCM & FMG as these names are under Algo Engine sell conditions.

Our preference remains BHP, WPL and S32.

 

 

 

 

BHP – Update on Dividends

Posted on | by Leon Hinde

BHP has received strong demand for its US$5.2bn off market buy back.

The US$5.2bn special dividend was priced at US$1.02, which was in line with
market expectations. BHP will trade ex-dividend on 10 January.

BHP could return an additional US$2 – $3bn in cash to
shareholders during next year.

The further dividend of $0.70 will be paid on the 8th of March.

 

 

Woolworths & Coles Group

Posted on | by Leon Hinde

 ASX listed companies are likely to conduct more share buybacks in 2019.

Woolworths and Wesfarmers are most likely to surprise with an off-market buyback which will help to underpin the current share prices.

Woolworths – Buy @ $28 and sell covered call options

Coles Group – Buy @ $11.75 and sell covered call options.

 

 

Algo Buy Signal – Dulux

Posted on | by Leon Hinde

Dulux Group is a current holding in our ASX 100 model portfolio. With the share price now testing the $6.50 support level, (last tested in August), we expect to see buying interest build.

DLX is now trading on 16x FY19 and a 4.4% yield.

Whilst this name is not a high conviction idea, (partly due to not being able to sell covered calls), we nevertheless place it on our watch list.

 

 

 

 

Origin – Value support

Posted on | by Leon Hinde

Whilst Origin is not under current Algo Engine buy conditions, we’re drawn to the name on valuation grounds.

ORG has resumed paying dividends, with 20cps for FY19 and a formal dividend policy to be announced at the FY19 result in August.

In FY20 we expect to see the dividends per share to be increased to $0.50 + placing ORG on a 5.5% yield.

Assuming oil prices remain well supported and ORG continue to execute the announced cost cuts, we can see ORG shares trading much high over the next 18 months.

 

Buy Tabcorp

Posted on | by Leon Hinde

We suggest buying Tabcorp at $4.30 or better. The February reporting result should provide a positive catalyst to drive the share price higher.

Upside target in TAH is $4.75+

Tabcorp goes ex-div $0.11 on the 13th February.