Sonic Healthcare (SHL.ASX)
Amcor (AMC.ASX)
James Hardie (JHX.ASX)
Lend Lease (LLC.ASX)
Newcrest (NCM.ASX)
Resmed (RMD.ASX)
For more analysis on our recent buy recommendations and market stratagey, please keep an eye out for tomorrow’s mid-week market update video report. It will be sent out tomorrow morning as a blog post.
Our algorithm engine is flagging the following stocks as potential buy on the dip alerts.
DMP.ASX
JHX.ASX
In today’s post we look at stocks recently commented on that require further attention, as profit taking is in sight or the entry level setups are now looking compelling.
NVT.ASX – Lift trailing stop loss to $5.25 support and retain profit target at $5.40
BLD.ASX – We had a buy recommendation on this at $6.20 and it has now rallied 10%+ to $6.85. Take profit on BLD and switch to JHX.
AMC.ASX – We see value in AMC at $15 only when complemented with a covered call strategy. Target is 7% capital growth, plus 2% from Feb div and 3% option premium. We have a six month time horizon on this trade.
ASX.ASX – Looks better value following the recent pullback and our algorithm engines are flagging a buy point.
The above charts summarise a few opportunities we’re watching. For further detail on our investment ideas, visit the monthly strategy piece or the recent mid week update.
If you have trouble locating the links to either of the above recordings, please email me.
leon@investorsignals.com
James Hardie (JHX.ASX) has now retraced back to $20.30 and our algorithm engines are flagging this as a buy signal. Strong EPS growth combined with the technical signals should set JHX up for a substantial rally. Our target range is $22+
Chart – JHX.ASX
At the end of last week, James Hardie (JHX.ASX) management provided FY17 NPAT guidance for $US260 – $290m which implies growth within our expected target range of 12 – 15%. These numbers reaffirm our buy on the dip strategy with JHX and FY17 EBITDA of US$500m, NPAT $275m, dividends per share (DPS) of US$0.45 places the stock on a forward yield of 2.8%.
James Hardie (JHX.ASX) reported 2Q16 update and we see nothing here to stop the “buy on the dip” approach. We already hold this name (in client accounts) from lower levels and have sold the Nov $23 call options. For clients not holding this name, keep an eye out for our buy signal, I think we’re not too far away from an entry signal being triggered.
The stock trades on 25X forward FY17 earnings and we’re looking for EPS growth or around 15%. US housing data continues to look strong.
FY17 revenue in USD$1.9b, with EBITDA likely to be around USD$490m and USD$0.45 in dividends.
In AUD terms we’re looking at around 3% forward dividend yield.
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