Last week we suggested a buy level for ASX Ltd near $58.00.
With yesterday’s low intraday print at $57.80, that downside buy target has been reached.
Also, with the share price sliding over 15% lower during the last month, internal momentum indicators are now oversold and a reversion higher looks likely.
At $58.00, the stock is on a forward yield of about 4%. We see the first level of resistance near $62.60 and up to $64.00 over the longer-term.
ASX Limited
Our Algo Engine triggered a buy signal in ASX recently and with the stock now moving into our targeted “value range”, we will begin accumulating.
ASX
Lendlease, ASX, CSL and Aristocrat are names that we covered in Monday’s Opportunities in Review webinar.
Again, we draw your attention to these high quality businesses that have seen a recent correction in their share price.
We believe these names are close to finding support and should be the focus of establishing entry conditions. Watch the short-term momentum indicators for a reversal higher.
Click below to watch the short two minute video
Our Algo Engine generated a buy signal in ASX recently and we recommend to keep this name on your watch list.
Our target is for a sub $60.00 entry level, where we feel buying support will begin to build.
Our Algo Engine generated a buy signal in ASX and we’ve identified $60 as price support.
ASX provides a defensive 3.5% dividend yield and EPS growth is tracking at 5%+.
Look to accumulate near the $60 support level.
Our ALGO engine triggered a buy signal for ASX Ltd into yesterday’s close at $62.57.
This “higher low” pattern is referenced to the intra-day low of $61.90 posted on June 14th.
Since reaching an all-time high of $68.90 on August 17th, the share price has slipped close to 8% lower.
We see solid technical support for the stock at $62.00 and initial chart resistance in the $66.20 area.
ASX Limited
ASX announced 1H18 core earnings of A$230m, which is ahead of market expectations.
Revenue grew by 6% and we have the stock now trading on a forward dividend yield into FY19 of 4.1%.
Underlying EPS growth has been upgraded to 5 -6% and full year dividend is $2.15, fully franked.
ASX is in the ASX Top 50 model portfolio.
ASX:ASX
ASX reports its half-year earnings on the 15th of February.
The consensus expectations are for NPAT to increase by 4% to $220 million and the company to declare a interim dividend of $1.03.
This places ASX on a forward yield of 3.7% and we see upside potential in the stock.
Weaker than expected activity trends in June led to small earnings downgrades by most analysts.
We are now forecasting flat year over year revenue growth.
ASX is trading on 24x forward earnings which seems excessive considering the low growth outlook.
US earnings season will go into full swing next week with several DOW components and high-capitalization S&P 500 companies reporting Q1 earnings.
Thus far, the results have been mixed with IBM missing badly and forward guidance on the major US banks showing concerns for future revenue growth.
The chart below shows that the expectations of S&P earnings, relative to the current pricing of the S&P 500 index, are very much out of line.
If next week’s earnings reports don’t exceed expectations, we could see further downside range extension on the SP 500 index, which could pressure the XJO index lower.
We have been looking at the May 5800 XJO puts as a short-term portfolio hedging instrument for a move lower in the local market.
We have also been buying the BetaShare BBOZ inverse exchange traded fund. Shares in BBOZ gain value as the local market trades lower.
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