Ramsay Should Outperform From Current Levels

Posted on | by Todd

Shares of RHC are down about 20% year to date.

Changes in government funding and regulations have been a headwind for the private health sector, in general, and on RHC, specifically.

However, recent industry research is estimating RHC EPS growth to reach 8% for FY 18 and then rise to 10% for FY 19.

At $58.20, the stock is trading at 18.7 X 12 month forward EPS.

We see scope for the share price to reach $74.50 over a 12-month time horizon.

Ramsay Health Care

Cimic Group Goes Ex-Dividend

Posted on | by Todd

Shares of Cimic are down over 2% to $40.85 in early trade as the company goes ex-dividend today.

This drop is a few cents deeper than than the 75 cent dividend that will be paid  to shareholders on July 4th.

CIM was added to our ASX Top 100 portfolio in June of 2016 at $35.00.

CIM has been a steady performer in client portfolios over the last two years and we will look to add to long positions on a pull back into the $40.20 area.

Cimic

 

Caltex Jumps Higher On Improved 1H Profit Estimates

Posted on | by Todd

Shares of Caltex have surged by over 3% in early trade as the company expects to book higher first half profits even with lower retail fuel margins.

This looks to be a positive result of the “shrink to grow” strategy put into place late last year and has lifted the return on assets to just under 14% at 7X EBITDA.

We don’t have a current ALGO signal on CTX, but we suggest keeping the stock on the radar for a signal soon.

The internal momentum indicators are pointing to the next area of resistance near $31.20, with support in the $29.80 area.

Caltex

 

 

 

Stay Long Treasury Wine Estates

Posted on | by Todd

It was just over a month ago that TWE shares were hammered from $20.00  down to $15.60 in just a matter of days.

The catalyst for the 20% drop was a report that TWE’s business model had caused a glut of lower grade wines in China and the local franchisees were not happy.

However, CEO Mike Clarke was quick to step in and stridently defend the company’s distribution structure and future earnings trajectory.

So far this year, earnings in Asia are up 48% to $117 million, 8% in North America to $100.4 million, 17% in Europe to $24 million, and 28% in Australia and New Zealand to $68.2 million.

Technically, the internal momentum indicators are pointing higher and we see the next key resistance point near the $17.50 level, before returning to the $20.00 handle over the medium-term.

Treasury Wine Estates

 

 

 

ALGO Buy Signal On ZGOL (Gold ETF)

Posted on | by Todd

Our ALGO engine triggered a buy signal on ZGOL (ETF) into Thursday’s ASX close at $16.50.

This “higher low” pattern is referenced to the low posted on December 18th at $16.18.

ZGOL is an Exchange Traded Fund based on Spot Gold prices denominated in Australian Dollars. As such, a period of rising Gold prices combined with a lower AUD/USD would be the optimum valuation environment.

More specifically, if the price of Gold rises to $1350 and the AUD/USD drops to .7400, we calculate the unit price to trade in the $18.25 area.

ZGOL is backed by physical Gold held by the ANZ Banking Group at its vault in Singapore and is traded on the ASX.

ZGOL Gold ETF

 

 

ALGO Sell Signal For Super Retail Group

Posted on | by Todd

Our ALGO engine triggered a sell signal on SUL into Friday’s ASX close at $8.78.

This “lower high” formation is referenced to the $9.12 high posted on January 18th.

Super Retail Group is the company behind the Rebel, Supercheap Auto and BCF brands.

The stock is not excessively expensive at 12X trailing earnings and a fully franked 5.2% dividend, but we see the potential for a technical correction which could drift back into the $8.00 range over the near term.

Super Retail Group

 

 

 

Keep OZL On Your Radar

Posted on | by Todd

Shares of OZL are flat in early trade as their $418 million takeover of Brazilian-based Avanco Resources is close to finalized.

The final vote from Avanco’s largest shareholders is expected to be accepted by June 14th. We consider this acquisition timely and a net positive for the Adelaide-based miner.

The share price of OZL has mirrored the 8% gain this week in the spot price of copper to reach a 6-year high of $10.68.

OZL has been part of our ASX top 100 portfolio for just over three years from $4.25.

We don’t currently have an ALGO buy signal for the stock, but will look for a “higher low” pattern on a pullback into the $10.00 area.

OZL

High Grade Copper

ALGO Update: Stay Short ANZ

Posted on | by Todd

Shares of ANZ will likely remain under pressure as the ACCC has broadened the charges related to the bank’s 2015 capital raising.

In addition to two other ANZ staff, executives from Citigroup and Deutsche Bank have also been charged with criminal cartel offences.

Our ALGO engine triggered a sell signal on ANZ at $28.15 on May 11th.

We see chart resistance near $26.95 and the next downside support area at $25.80.

ANZ

 

Newcrest Gets A Lift From Citi Price Upgrade

Posted on | by Todd

Shares of NCM are over 1.5% higher to $21.40 in early trade after a Citi Research report upgraded the stock to “BUY” and raised their 12-month target price to $25.80 per share.

The report focused on the share price relative to the replacement costs of the assets, which suggests that NCM may end up as a takeover target for a larger mining company looking for Australian assets.

Considering that the performance of Spot Gold has been tepid over the last month, local gold mining shares have been well bid.

At current levels, we prefer adding to long positions in NCM and NST.

Newcrest

Northern Star

ALGO Update: Stay Long Tabcorp

Posted on | by Todd

Much of the recent reporting on TAH has been focused on the growth in wagering revenues, in general, and the potential boost during the soccer world cup, specifically.

However, a recent report has shed light on the revenue contributions from the Tatts Lotto side of the business. With pool growth expected to rise 4.1% over the remainder of 2018, we see this as a net positive for the share price.

At the current price of $4.50, TAH is trading at 15.2 X earnings and 22% below the target price of $5.50 per share.

Our ALGO engine triggered a buy signal for TAH on April 4th at $4.22 and the stock was added to our model portfolio on February 12th at $4.52.

 

Tabcorp