Altium – Valuation View

Posted on | by Leon Hinde

Altium is under current Algo Engine buy conditions and the positive price momentum and recent inclusion into the ASX 100 index, has us digging a little deeper into the fundamentals.

The stock trades at a lofty PE valuation of 56x forward earnings. However, the company has a strong track record of above average EPS growth. FY20 the market is looking for EPS to increase 20% from $0.41 to $0.50 cents per share. FY20 revenue is forecast to jump from $175m to $215m .

The stock currently trades on a  dividend yield of 1%.

We’re comfortable to view this as a momentum play and remain long the stock whilst it trades above our $29 stop loss.

 

 

 

Coles Group – Valuation Review

Posted on | by Leon Hinde

Coles Group has been a stand alone listed business since November 2018, after being spun-out of Wesfarmers.

The financial performance to date has been patchy at best and the recent Coles Strategy Day highlights were the confirmation of the dividend payout of 80-90% for FY19, (which translates to an estimated $0.55 per share or 4.1% yield) and the $1bn cost out program.

We forecast flat earnings and revenue growth into FY20 and suggest investors sell a covered call option to enhance the income return.

 

 

 

 

AGL – Algo Buy Signal

Posted on | by Leon Hinde

AGL Energy is now under Algo Engine buy conditions, following the recent sell-off from $23 down to $20.50.

We recommend buying AGL and selling an out of the money call option to enhance the income return.

AGL goes ex-div  $0.63 on the 22nd August.

For more information on the option strategy, please call our office on 1300 614 002.