Tag: ASX:ALL

Our ALGO engine reflected a buy signal for ALL on September 14th at $28.90.

The share price is near the same level in early trade today.

However, with the recent acquisitions of Big Fish Games and Plarium, we expect to see an increase in the company’s USD-based earnings as it grows its position within the online gaming sector.

Almost 60% of ALL’s earnings are generated in the USA and the company is projected to grow earnings by 19% to $1.40 per share during 2019.

ALL is one of several ASX listed companies that will benefit from a progressively lower Aussie Dollar.

Technically, we see solid support in the $27.90 area and an initial upside target of $31.25.

Aristocrat Leisure

Our ALGO engine triggered a buy signal for Aristocrat Leisure yesterday at $28.90.

As illustrated on the chart below, this ‘higher low” pattern is referenced to the May 23rd low at $27.58.

Although a recent earnings update stated that ALL’s digital revenue may not be increasing as fast as expected, revenue from older games continues to accelerate.

The company has forecast earnings of $1.40 per share for FY 2019, which fixes its current price at 20X forward earnings.

Internal momentum indicators have turned positive and we expect a move into the $32.00 area over a 6 to 8 month time horizon.

Aristocrat Leisure

Aristocrat Leisure is the best performing stock in our ASX Top-50 model portfolio, up 519%

Aristocrat reported its 1H18 result today and NPAT was up 32% on the same time last year to $362m.

Aristocrat reports 1H18 earnings on the 24th of May and we’re forecasting net profit after tax to be up 20%+ to $330 million.

Earnings growth is underpinned by strength in the North America and Digital businesses. If we assume year-over-year 20% EPS growth, ALL trades on FY20 dividend yield of 3%.

We consider ALL expensive, however, momentum continues to favour the long-side with investors advised to run a stop-loss below recent higher low formations.

Aristocrat

Aristocrat Leisure has created a “higher low” formation at $22.50, and we see scope for the stock to retest the recent high of $24.00.

Internal momentum indicators have turned higher, which suggests that broad investor interest has returned to the buy-side of the stock.

ALL remains in our ASX Top 50 model portfolio.

ALL’s exposure to recurring revenue is increasing, although the business remains exposed to cyclical trends.

The market’s response to Aristocrat acquiring Big Fish has been mixed.

We see the the deal as 3 – 4% EPS accretive in 2019 and will help to underpin EPS growth of 20%, placing ALL on a 2019 dividend yield of 3.3% and a PE of 20x earnings.

ALL is among the best performing stocks in our ASX 50 model and we advise investors to look for near-term buying support  along with the next Algo buy signal.

Aristocrat

Aristocrat Leisure is forecast to grow earnings in FY18 at 18%, placing the stock on a forward yield of 2% and price to earnings ratio (PE) of 23x. Whilst, the stock is expensive, the valuation is supported by a “top tier” earnings growth profile.

Our Algo Engine triggered a buy signal in ALL on 28/7/17 at $19.83, the strong buying interest in yesterday’s session, (ALL went ex div $0.20), provides confidence that the upside momentum will continue.

ALL delivered $543m, (37% increase), in underlying profit for FY17.

A good result was offset by a negative response to their announced acquisition of Big Fish Games. The acquisition of Big Fish is the second deal this year where Aristocrat is expanding into social gaming.

FY18 is forecast to deliver a further 20% growth with net profit of $650m, EPS $1.05, DPS $0.42 placing the stock on a forward yield of 1.9%.

We hold ALL in our ASX 50 model portfolio, following the Algo Engine buy signal triggered in July at $20.25.

Aristocrat Leisure released 1H17 results with revenue and net profit beating analysts’ bullish expectations. Full year guidance was reiterated with profit growth likely to be + 20-30%.

North America and Digital underpin a strong earnings outlook and the company’s strong balance sheet, will likely see excess capital returned to shareholders and/or new acquisitions announced.

The company declared a dividend of $0.14 for the half-year, which was up from $0.10 in 1H16.

FY18 revenue is likely to increase 10%+ to $2.7b, EBIT $900m on EPS of $0.90, DPS of $0.36, placing the stock on a forward yield of 1.8%.

Our Algo Engine last generated a buy signal in October 2016 at $15.00