Technology One – Buy Signal

Posted on | by Leon Hinde

Technology One now comes onto our radar following yesterday’s Algo Engine buy signal.

Technology One is one of Australia’s largest enterprise software services companies.

Key results were as follows for 1H 20 earnings
 Profit after tax of $19.1m, up 6%
 Profit before tax of $25.9m, up 6%
 Revenue of $138.4m1, up 7%
 Expenses of $112.5m, up 7%
 SaaS Annual Recurring Revenue (ARR)2 of $110.2m, up 33%
 Cash Flow Generation of $9.9m, up 100+%
 Cash and Cash Equivalents of $84m, up 23%
 Dividend of 3.47cps, up 10%

We’ll review the full-year earnings in the coming weeks when they release their June numbers.

Telstra – FY21 Guidance

Posted on | by Leon Hinde

The outlook into FY21 was somewhat disappointing, with the company
guiding to underlying EBITDA of A$6.5-7.0bn, down from 7bn in FY20.

FY23 forecast for EBITDA targeted by Telstra management is A$7.5-8.5bn, this will be required in order to support the $0.16 per share dividend payout.

We continue to see TLS within a band of $3.10 support and $3.50 resistance.

Ramsay Health Care – Rallies 10%

Posted on | by Leon Hinde

Ramsay Health Care is faced with flat earnings in 2020 and only moderate growth FY21. For patient long-term investors, there’s an income opportunity with defensive low levels of growth.

We see buying support increasing near the $60 level.

The above post is from early August when RHC was trading in the $60 – $62 price range. The stock is now approaching $70 and short-term traders can consider taking profit between $68 – $70.

Telstra

Posted on | by Leon Hinde

Telstra Corporation is under Algo Engine sell conditions after forming a lower high formation at $3.60 back in July.

Telstra reported revenue for the year down 6% to $24bn, profit down 14% to $1.84bn.

Telstra estimated the coronavirus economic-related impact caused a $200 million hit to earnings.

Telstra is likely to trade within the $3.20 support to $3.50 resistance range until late 2021 when we look for the further action on Infrastructure Co spin-off to result in a break to the upside.

Transurban

Posted on | by Leon Hinde

Transurban is under Algo Engine sell conditions and we’ve remained cautious on valuation grounds and the likely reduced dividend payout.

TCL’s earnings were below consensus and risks exist on breached covenants in the US, along with ongoing COVID-19 volume impacts.

Target $12.50