Crown Firms In Front Of Next Week’s Earnings Report

Posted on | by Todd

We followed an ALGO buy signal for CWN back in February at $12.60.

However, over the last few months, the stock has traded in a relatively narrow range between $13.80 and $13.25.

With the company reporting full year earnings next Thursday, we see the potential for the stock price to trade up through the top end of the range.

We expect CWN to beat the consensus NPAT forecast of $370 million as operations in both Victoria and Sydney could print higher numbers.

CWN goes ex-dividend for 30 cents on September 21st and we see the next upside target neat $14.25.

Crown Resorts

ALGO Update: Stay Long James Hardie

Posted on | by Todd

Our ALGO engine triggered a buy signal for JHX on July 31st at $21.50.

Since then the stock has picked up almost 6% and is over 1% higher at $22.75 in early trade today.

The company will release their Q1 FY19 results next Friday.

Expectations are that the EPS should rise to 67 cents per share on stronger earnings.

Our initial upside target is the May 16th high near $23.85.

James Hardie

CBA Continues To Slide In Front Of FY18 Earnings Report

Posted on | by Todd

Our ALGO engine triggered a sell signal for Commonwealth Bank on July 9th at $76.10.

Since then the stock has lost over 3% and reached $73.50 in early trade today.

CBA is scheduled to report its FY18 result next Wednesday.  The early forecast is for NPAT to print at $9.5 billion and DPS to be flat near $2.30.

There are three key reasons why we believe the earnings risk is skewed to the downside in this report.

The AUSTRAC settlement of $327 million, margin pressure from short-term funding costs and a disappointing 4% loan growth in June.

Technically, the CBA chart has followed a “lower high” pattern since since mid-January and has dropped over 10% during that time.

We continue to hold a bearish bias toward the banks, in general, and expect CBA to test the June low trade of $67.50 over the medium-term.

CBA

Star Group Rising Into FY 18 Earnings Report

Posted on | by Todd

Shares of Star Entertainment have reclaimed the $5.00 handle for the first time in three weeks as investors get positioned for the FY 2018 earnings report due out on August 24th.

Over the last two weeks, SGR has had nine buy ratings and two hold ratings from local broker names.

The company operates casinos in Sydney, Brisbane, the Gold Coast and also manages the Gold Coast Convention Center on behalf of the Queensland Government.

SGR is one of the largest beneficiaries of tourism inflows into Australia, which means their hotels and developments could significantly raise future earnings.

The stock is currently trading at 8.7X FY19e EBITDA and we believe their FY 2018 earnings could surprise to the upside.

SGR was added to our ASX Top 100 portfolio and we see scope for a move back into the $5.70 range over the medium-term.

Star Entertainment Group

Stay Long Tabcorp In Front Of Next Week’s Earnings Report

Posted on | by Todd

Over the last two weeks, shares of TAH have been trading in a narrow 15 cent range between $4.60 and $4.75.

It’s likely that this indecision pattern is due to the upcoming FY 2018 earnings report scheduled for August 8th.

This will be the first report which will include the combined Tatt’s and Tabcorp earnings data.

A recent broker note suggests that the the merged entities will have at least $130 million of synergy savings and has upgraded the stock to “overweight” with a target of $5.20.

Our ALGO engine triggered a buy signal on TAH on April 5th at $4.27 and the stock is included in our ASX Top 100 portfolio.

Tabcorp

 

ALGO Update: Stay Long A2 Milk

Posted on | by Todd

Our ALGO engine triggered a buy signal in A2 Milk at $9.81 on July 20th.

Since then, a broker note has lifted the company to an “outperform” rating with a 12-month price target of $12.40.

The report focuses on the fresh milk delivery partnership between A2M and Fonterra in New Zealand, and the opportunity to replicate that model in other countries.

As a result, the broker note estimates growth in EBIT to rise from $274 million to $523 million over the next two years.

A2 Milk

 

NCM’s Q4 Production Up 15%

Posted on | by Todd

Shares of Newcrest mining have spiked over 4.5% higher to reach $21.00 in early trade.

The catalyst for the move was the release of their Q4 production numbers.

The Gold miner reported their overall production rose 15% for the 3 months to June 30th from 551,000 ounces to just under 635.000 ounces.

This improved result places their full year production in the upper end of their expected 2.25 to 2.35 million ounces. All-in sustained costs were unchanged at $795 per ounce.

We see the next area of chart resistance for NCM near $21.55, with a longer-term target in the $24.25 area.

Newcrest Mining

 

 

NCM Firms In Front Of Tomorrow’s Quarterly Report

Posted on | by Todd

Shares of Newcrest mining are consolidating near three-month lows in front of the release of their Quarterly production report tomorrow.

Our ALGO engine triggered a buy signal on NCM on Monday at $20.04 and the stock has been added to our ASX Top 50 model portfolio.

The recent slide in Spot Gold appears to be finding support around the $1200.00 area, which is a net positive for the stock.

We have a medium-term upside target for NCM in the $24.25 area.

Newcrest Mining

Buy The Dip In Evolution Mining

Posted on | by Todd

Our ALGO engine triggered a buy signal for Evolution Mining into yesterday’s ASX close at $2.92.

This “higher low” pattern is referenced to the intra-day low of $2.86 posted on June 19th.

A recent broker report suggests that EVN has several overseas mining assets on its acquisition  radar.

The report also showed that EVN’s cash balance increased over the last quarter by $115 million to $332 million, while the company’s net debt fell from $187 million to $71 million.

EVN was added to our ASX Top 100 Model portfolio on July 17th.

We see further support in the $2.80 area  and we have medium-term upside target of $3.70.

Evolution Mining

 

 

 

 

Stay Long Downer EDI

Posted on | by Todd

Our ALGO engine triggered a buy signal in Downer EDI on June 25th at $6.74.

Since then, the stock has reached an intra-day high of $7.30 on July 10th.

Recent broker notes have been bullish on the Engineering and Construction sector citing a high backlog of domestic infrastructure work.

The strong results for Cimic Group last week underscore this uptick in construction activity, in general.

More specifically, DOW got a lift last week after announcing it had won a 5-year support and maintenance contract with Chevron Australia.

We believe DOW is well placed to benefit from the dual tailwinds of increased infrastructure spending and a ramp up in capital spending from the mining sector.

DOW will report full-year results on August 16th. The forecast is for NPAT to increase to $295 million and the dividend per share to rise to 14.4 cents.

We see solid chart support in the $6.90 area and initial upside resistance just over $7.65.

Downer EDI