Suncorp – Buy

Posted on | by Leon Hinde

Suncorp Group is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

We see buying support building at $13.25 and our upside target for the stock is $14.00+.

SUN goes ex-div $0.40 on the 15th August and adding a covered call option into November will help boost the cash flow return.

 

Oz Minerals – Buy the Dips

Posted on | by Leon Hinde

ASX:OZL} is a current holding in our ASX 100 model portfolio.

The 2Q 19 production result was solid with higher copper production
offset by lower gold output. OZL produced 28kt of copper and 27koz of gold during the quarter.

Construction work on Carrapateena is progressing well, with the process plant nearing completion.

OZL is to release its earnings result on 28 August.

Based on FY20 earnings we have OZL trading 17x and a 3% dividend yield. Increased production from expanding mine capacity should help to underpin EPS growth 2 – 3 years out.

 

 

 

Brambles – Share Buyback Adds Support

Posted on | by Leon Hinde

Brambles is under Algo Engine sell conditions and we’ll review the FY19 earnings result with interest when announced on the 21st of August.

Earnings are likely to come in below the “moderate growth” expectations. We think the number will be flat to negative. Downside risks to the share price are underpinned by the share buyback which will recommence, post the earnings result.

Based on FY20 earnings we have BXB trading on a forward yield of 2.5%.

 

 

RIO – Remains Under Algo Sell Conditions

Posted on | by Leon Hinde

China steel demand continues to perform far beyond market expectations and continued strength in iron ore pricing via stimulus of construction activity in China, may underpin higher prices.

Our base case is that iron ore pricing is approaching a turning point with momentum in China port inventory drawdowns slowing and supply continuing to recover.

The net effect on RIO will be the lack of near-term growth, will make it difficult for the company to offset commodity price-driven earnings decline.

RIO remains under Algo Engine sell conditions and we’ll revisit the buy-side later this year when we see the next Algo buy signal.

Scentre Group – Buy

Posted on | by Leon Hinde

Scentre is under Algo Engine buy conditions and is a current holding in the ASX 100 model portfolio.

SCG goes ex-div $0.11 on the 14th of August.

Low global bond yields and the  announced share buy back by SCG, will help underpin downside risks. We see value emerging, following the recent correction from $4.15 to Monday’s low at $3.84.

Downer EDI – Buy Signal

Posted on | by Leon Hinde

Downer EDI is now under Algo Engine buy conditions and was added into our ASX 100 model portfolio.

We are comfortable with DOW’s broader business, given the track record of earnings delivery. The recent issues DOW encountered within the solar and engineering projects were absorbed within FY19 guidance.

FY 20 earnings should deliver 8% EPS growth, which places the stock on a forward yield of 4.5%.

Downer EDI offers value within the $6.75 – $7.00 range.