Commonwealth Bank is priced for a strong result on February 12, so the potential for disappointment is high. The stock remains under Algo Engine sell conditions and despite the prospect of a $2.5bn on market share buy-back, we remain on the short side of the stock.
CBA has re-rated to a P/E multiple of 17x and a dividend yield of 5%.
Computershare is under Algo Engine sell conditions.
CPU trades on 20x PE and a 2.6% dividend yield with a backdrop of falling earnings growth. We expect EPS growth to trend towards “flat” numbers at best.
Our valuation forecast is for CPU to find support at or near $14.50.
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Transurban is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
We see upside in TCL to $16, at which time investors should consider selling out-of-the-money call options to enhance the income return.
For more information on the derivative strategy, please call our office on 1300 614 002.
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