Tag: ASX:CWN

The chart below shows the range where we will be watching for the short-term momentum indicators to turn higher.

Crown Resorts is under Algo Engine sell conditions and we see increasing selling pressure due to a weak earnings outlook.

Risks remain elevated coming into the next earnings release.

Crown Resorts is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

The group announced its results for FY19 with NPAT down 5% to $370mn. A final dividend of $0.30 cents was declared.

Despite the short-term headwinds from lower VIP revenue, we see value in Crown shares as investors are effectively getting free upside in the  Barangaroo project.

Buying support at $11.00

Crown Resorts has been a high conviction buy expressed on the blog. The share price made a low at $11.69 and is now trading at $12.80.

Following Melco Resorts (NASDAQ listed) buying 50% of James Packer’s holding in Crown at $13 per share, we see scope for increased VIP flow from Melco’s large high roller customer base.

Whilst there is scope for Melco to make a full takeover of Crown, it is not our base assumption. We suggest investors hold Crown for the 4.5% yield and for those seeking greater cash flow, selling an out of the money covered call option will boost the annualised cash flow to 10% plus.

Crown Resorts is under Algo Engine buy conditions and we’ve been highlighting the price gap in the charts back to $11.80.

Construction disruption at Star Sydney and weaker trends within VIP gaming resulted in an earnings downgrade to SGR. We don’t expect the slowdown to be as severe for Crown.

Buy CWN at $11.80

Crown Resorts is now under Algo Engine buy conditions and we continue to see upside opportunity in the share price.

CWN goes ex-div $0.30 on the 20th September and the stock trades on a forward yield of 4.5%.

Note: There is a price gap back to $11.80. With the stock trading $11.90 today we’ve almost seen the price gap closed. Expect a rally from $11.80, we view this level as a discounted entry point.

Buy Crown between $11.80 & $12.00.

Crown Resorts remain under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

A cautious approach is to sell covered call options and run the position as an income contributor to portfolios, (10% cash flow), or the more aggressive play would be to hold the stock for the potential of a concrete takeover offer from Wynn or another rival.

Assuming 5% EPS growth into FY20, we now have the stock on a 4.3% forward yield.

Crown Resorts today acknowledged Wynn Resorts is disengaging with respect to the announced takeover proposal.

We sold at $14.00+ yesterday, following the 20% rally on the open. The stock has retraced 10% and today is trading at $12.80. We again see value in Crown at or near this level.

A cautious approach is to sell covered call options and run the position as an income contributor to portfolios, (10% cash flow), or the more aggressive play will be to hold the stock for the potential of a concrete takeover offer from Wynn or another rival.

Assuming 5% EPS growth into FY20, we now have the stock on a 4.3% forward yield.

Crown Resorts have announced a pause in trading of its shares amid media reports of a takeover bid. It is suggested the company has attracted the interest of Wynn Resorts.

Whilst Crown has been our preferred exposure, Star Entertainment will also benefit from the improved sector sentiment.

NOTE: At 10.30am today, CWN  confirmed the takeover offer at $14.75 per share 50% cash and 50% Wynn shares.

Crown Resorts is a current holding in the ASX 100 model portfolio.

With the share price trading at $11.50 we consider the downside risk minimal.  Investors may wish to add a covered call option to enhance the income return.