RIO Tinto Firms On Solid Output

Posted on | by Todd

Shares of RIO are 1% higher at $79.90 in early trade as a recent broker note has reaffirmed their “outperform” rating and set a 12-month target of $94.00.

The report mentions that Iron Ore shipments of 88 metric tons were at the top end of 2018 calendar year guidance.

In addition, shipments of copper and bauxite were also slightly ahead of 2018 guidance.

The company is scheduled to announce their  2018 earnings on August 1st. The forecast numbers are NPAT of $4.6 billion and DPS of $1.36.

RIO was added to our ASX Top 20 portfolio in March of 2017.

RIO Tinto

 

 

RIO – Likely To Boost Share Buyback Scheme

Posted on | by Leon Hinde

Our Algo engine generated a buy signal recently in RIO at $80.00 and the stock remains in our ASX50 model portfolio.

In the next 12 months, RIO will generate over $10 billion in free cash flow on top of the $7 billion+ from asset disposals. We anticipate the excess funds will be returned to shareholders though an increased share buyback program.

Of the existing $2.9b buyback, RIO has now completed $1.7b.

FY19 revenue $38b, EBIT $13b supporting a  forward dividend yield of 5.6%.

RIO has their June quarter production numbers out tomorrow.

Rio Tinto

 

 

 

ALGO Buy Signal For Rio Tinto

Posted on | by Todd

Our ALGO engine triggered a buy signal on RIO Tinto into yesterday’s ASX close at $79.20.

The “higher low”  share price pattern is referenced to the $77.40 low posted on April 17th.

The share price reached a 2-month low of $78.30 yesterday on continued downside pressure on both Iron ore and Copper.

However, a recent broker note from Credit Suisse  included a an “outperform” rating with an upside target just over $89.00.

The report cited the recent sale of the miner’s Grasberg asset  in Indonesia as providing additional cash to follow through on their $1.3 billion share buyback plan announced earlier this year.

Frequent Blog readers would have noticed that our ALGO engine has triggered buy signals on several resource names (as well as ETFs) over the last month. These include OZL and FMG.

In addition, several commodity and metals-based indexes are testing multi-year support levels as the combination of a stronger USD and threats of trade wars continue weigh on the sector.

In general, we believe a recovery in the broad commodity sector will take more time to form a sustainable base. As such, we’ll watch these resource sector names closely and update investors on specific entry level in future postings.

Rio Tinto

 

 

 

 

RIO – 1Q18 Fully Valued After Production Results

Posted on | by Leon Hinde | Leave a Comment on RIO – 1Q18 Fully Valued After Production Results

RIO reported mixed 1QY18 quarterly production results. Solid result from Pilbara iron ore, with production and shipments of 80+million tonnes in the quarter. This is equivalent to the top end of 330- 340 mt shipment guidance for the full year.

Copper production was largely in line and aluminium was mixed.

Capital management capacity remains high, with US$5bn in divestment
proceeds expected to settle in the next 12 months.

Resource market strength is likely in the last stages of the current rally and investors should look at selling call options or locking in outright gains.

Rio Tinto

 

RIO Gets A Lift From Pilbara Exports

Posted on | by Todd | Leave a Comment on RIO Gets A Lift From Pilbara Exports

Shares of RIO are up over 1.5%, and have reached a two-month high at $79.40 as the mining giant announced solid growth in shipments across their mineral lines.

The company announced that shipments of Iron Ore from their Pilbara mines rose by 5% along with increased shipments of copper and bauxite.

Our ALGO engine triggered a buy signal in RIO on March 29th at $72.30.

And while the internal momentum indicators look positive, investors should be aware of a potential “triple-top” pattern in the $82.50 price area.

Rio Tinto

 

 

 

 

ALGO Buy Signal In Rio Tinto

Posted on | by Todd | Leave a Comment on ALGO Buy Signal In Rio Tinto

Our ALGO engine triggered a buy signal for RIO into the ASX close yesterday at $72.70.

The “higher low” structure is referenced to the $68.60 low posted on August 12th.

Analysts have retained their buy  rating and $90.00 price target on the mining giant’s shares after it announced the sale of its stake in the Kestrel coal mine for US$2.25 billion.

RIO was added to our ASX top 100 Model portfolio last March at $61.40.

RIO Tinto

 

XJO Update: Miners Lead The Index Lower

Posted on | by Todd | Leave a Comment on XJO Update: Miners Lead The Index Lower

The ASX XJO Index fell 1.1% for the week and traded below the 6000 level for the first time this year.

Mining stocks and the major banks led the downside following weakness in commodity prices.

The ASX Gold index dropped four sessions in a row and lost 1.3% on Friday to close at 4874.60.

Iron Ore prices posted their first weekly loss in over a month, which pressured shares of mining giants BHP and RIO Tinto lower for the week.

Shares of RIO fell 4.6% to $78.00 while  BHP slipped 3.7% to end the week at $30.70

Internal momentum indicators are looking fairly neutral on the daily charts, which suggest the index could see range trading next week between 6070 and 5985.

XJO Index

 

RIO Slips After Q4 Output Report

Posted on | by Todd | Leave a Comment on RIO Slips After Q4 Output Report

Shares of Rio Tinto are down almost  1% in early trade near $81.00.

This could be a case of “buy the rumor, sell the fact” as the mining giant’s Q4 production numbers were largely as the market expected.

Earlier today, RIO announced a 3% increase in Pilburra iron ore output , producing just under 88 tons, and reaching its 2017 guidance figures of 330 tons for the year.

Since posting a low of $68.60 on December 12th, RIO shares have rallied over $13.00 in just over a month.

This is a 20% gain on what has been a surprisingly resilient Spot iron Ore market over the last 8 weeks.

RIO has been in our Top 50 Model portfolio since March 6th when it was trading at $61.50.

We will look for a pull back into the $73.00 area before adding to long positions.

Rio Tinto

 

Will The US Tax Reform Destabilize Global Banks?

Posted on | by Todd | Leave a Comment on Will The US Tax Reform Destabilize Global Banks?

A key part of the US Tax Reform passed last week includes giving US companies a tax break on profits earned and kept in banks overseas.

As per the legislation, US firms can now repatriate offshore earnings at a tax rate of 15.5%, compared with the previous rate of 35%.

In 2005, the Bush administration had a similar “tax amnesty” when over 50 US firms sent back about $350 billion in profits earned overseas.   

In an interview last week, Mr Trump estimated that the total amount of US corporate profits on deposit offshore is between $3 and $5 trillion. 

This is a pretty wide spread. But considering that just 5 tech firms (Apple, Microsoft, Google, Cisco and Oracle) are estimated to be holding over $650 billion offshore, it’s clear that the repatriation numbers will be much higher than in 2005. 

In fact, Apple CEO, Tim Cook, announced that they intend to repatriate over $250 billion during 2018, which is over 70% of the 2005 total spread across 50 firms. 

The most obvious impact of this massive transfer of funds will be the boost in demand for US Dollars. The amnesty plan in 2005 triggered a 12% rally in the USD Index from 81.00 to over 90.00 from March to July.

However, with some EU and Japanese banks already teetering from bad debts and non-performing loans, the short-term implications could be devastating to the banks that have been holding the cash that Mr Trump wants back.

We believe that with just one company like Apple draining $20 billion a month from the European banking system, there will be a negative impact on the health of many EU banks.

At this point we don’t have any clear numbers reflecting the amount of money being held in Australian banks, but we would expect the general strengthening of the USD, on a global basis, will see the AUD/USD retreat back into the lower .7000 handle.

ASX listed stocks which will benefit from the lower Aussie dollar include RHC, QAN, TWE, RIO and NCM.

Aussie Dollar

 

  

 

 

 

 

 

 

 

 

 

 

RIO Extends Buy-Back Scheme Into 2018

Posted on | by Todd | Leave a Comment on RIO Extends Buy-Back Scheme Into 2018

Shares of RIO Tinto are trading near a 6-year high of $75.00 as the resource giant announced yesterday that it would buy back an additional $1.9 billion worth of on-market shares by the end of 2018.

This is in addition to the $1.5 billion worth of shares the company bought back in 2017 as part of RIO’s commitment to return the proceeds from the sale of its Coal & Allied assets to shareholders.

With the share price over 8% higher since December 1st, the internal momentum indicators are approaching an over bought condition.

However, RIO has been a cornerstone stock in our model portfolio since March 6th, when it was trading at $61.50, and our ALGO engine triggered a buy signal on April 18th at $58.00.

It’s reasonable to expect some type of price correction in the near-term, but we would expect longer-term buying support in the $71.40 area over the next few weeks.

Rio Tinto